Fair markets in fair societies

The outcry over Panama Papers has again focused attention on the tides and currents of our global financial system

The outcry over the so-called Panama Papers has again focused attention on the tides and currents of our global financial system. Whether those named in the papers are breaking the law is not necessarily the point. What is worrying is that there appears to be enough underwater caves beneath our financial high seas for vast amounts of treasure to be hidden from view. Some of this money undoubtedly comes from illicit sources. Although now five-year-old, the UN Office on Drugs and Crime’s Estimating Illicit Financial Flows’ publication showed that money laundered from criminal acts amounted to around $1.5 trillion annually. That’s probably a conservative estimate. But it is not just the illicit money that washes through our financial systems; corruption is also harming financial trust and government credibility. Although this is probably enough to be going on with, this endemic crime does immeasurable harm to our societies, especially to the weak and the vulnerable.

Money diverted from governments can prevent schools and hospitals from being built, as well as desperately needed infrastructure such as roads and bridges. This should dispel the entirely false view that corruption is a victimless crime. Victims are legion and they include millions of vulnerable women, children and men; individuals who suffer most when corruption spirits away funds for essential services. Corruption is modern proof of the old children’s nursery rhyme, “For want of a nail”. In the poem, the lack of a nail led inescapably to the loss of a kingdom. Corruption pursues the same frightening logic. But it is not measured by lost kingdoms, or lost lives or even irreparably damaged communities; it is measured in generations of missed opportunities and hopes made barren. Corruption’s ability to undermine societies and hinder development is specifically recognised in the 2030 development agenda under Goal 16, which calls for substantial reductions in corruption and bribery. Thankfully, there are also some signs that the tide is turning. One striking reason is the landmark UN Convention against Corruption (UNCAC). It is the only universal, legal, anti-corruption instrument, and is driven by innovative anti-corruption standards that are applicable to both public and private sectors. The Convention is changing attitudes and lives at the same time.

The inclusion of the private sector is essential. Governments cannot undertake the heavy lifting on their own. There is a desperate need for close collaboration. Fortunately, the private sector seems to be moving in the same direction. Businesses realise that the fight against corruption is a win-win situation: business thrives where laws are clearly defined and fairly applied. To help, I would suggest four key actions are needed. Firstly, countries need to create the laws necessary to give teeth to UNCAC at the local level. Secondly, criminal justice institutions must be given the authority and independence to investigate, prosecute and adjudicate corruption offences. Thirdly, cooperation must drive everything that we do. Finally, there is a need to promote asset recovery mechanisms to identify, seize and return the proceeds of crime. Our goal must be the following: no funds stolen from any developing country are to be left behind in a foreign bank or tax haven. Everything must be returned. But we cannot do this alone. The private sector can support this work. Its role is to continue turning the much-desired level-playing field into the legislated playing field.

The UNCAC can help. Its unique selling point is its reach and global credibility. In the recent past, people accepted corruption and bribery as part of everyday life. Now they reject it. But it has not been tamed, it can come back with a vengeance if we let things slide. The UN is seeking to help build better lives and greater equality, while businesses are seeking integrity, accountability and transparency. Let’s combine our work to ensure there are fair markets in fair societies.

Published in The Express Tribune, June 10^th, 2016.

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