International
Transparency
Trillion Dollar Scandal
Guest blog post from EG Justice’s Tutu Alicante:
I spend each day of my life fighting corruption. I’ve seen friends beaten and jailed for highlighting fraud and abuse. There are many people like me across Africa. But we can’t win this fight alone. Corruption is a global problem. That’s why I’m writing to ask you to add your voice.
Right now, a few of the world’s biggest oil, gas and mining companies are fighting hard to keep some very big secrets. They are lobbying against proposed laws supported by major European leaders that would lift the lid on trillions of dollars paid to governments across Africa – secret payments which can sometimes get into the wrong hands. This money should be going into vital services like schools, health clinics and roads that could help lift hundreds of millions out of poverty, not into the pockets of a few.
Government ministers from across Europe meet in less than two weeks to discuss this legislation. It could save lives in Africa and help build a future where nobody needs to rely on aid. But some corporate lobbyists have swung into action and are trying to kill this effective legislation. Don’t let them win.
Please stand with me and sign the petition telling European leaders not to give in to corporate lobbying
The full petition reads:
Dear European Leaders,
Please stand up to corporate lobbying against proposed EU laws requiring oil, gas and mining companies to publish payments to foreign governments. Pass strong laws that will help citizens spot corruption and ensure the money is used to lift millions of people out of poverty.
Over the last decade, multinational companies have paid trillions of dollars to African governments in exchange for their natural resources. This is set to continue well into the future, providing a massive opportunity to lift hundreds of millions of people out of poverty. When African citizens like me can see what our governments are paid, we can make sure money is being spent on vital services.
Corruption deprives nations of their future. If enough of you join with me we can help put an end to this trillion dollar scandal.
Tutu Alicante,
ONE member and Executive Director of EG Justice
EG Justice is an African organization that campaigns for human rights, the rule of law, transparency and citizen participation in Equatorial Guinea.
Norman Lamb takes critical anti-corruption role
Liberal Democrat Norman Lamb has today been appointed to a new Ministerial posting in the UK’s Business Department. Among his responsibilities will be leading for the UK on the European-wide negotiations for a strong European extractives transparency law. ONE has been campaigning on this issue along with our partners in the Publish What You Pay coalition, and we are now looking to Lamb to play a critical role in helping millions of African citizens get access to the information they need to hold their governments accountable for revenues received from extractive industries.
Lamb will be the UK representative at a key meeting on the 20th February in Brussels when Ministers from around Europe will meet for the first time to discuss the new law. Next week ONE will be launching a petition to the Ministers attending that meeting asking them to stand firm in the face of heavy industry lobbying and help put an end to the secrecy status quo which is helping to perpetuate the resource curse.
It continues to be a scandal that despite African countries receiving $1.5 trillion from natural resources in the past 5 years, some of the most resource-rich countries continue to suffer from insecurity and high levels of poverty. In Equatorial Guinea, for example, 1 in 12 children die before reaching their first birthday yet by some indicators they are wealthier per capita than France.
We know transparency is not a solution to this problem alone – but it is a vital first step. Norman Lamb has the opportunity to do something great in the next few months, and show he is on the side of some of the poorest people in the world. If he stands firm and refuses to include the legislation wrecking exemptions and watering down of key details that some rogue companies are looking for – he will be a hero to millions. As ONE activists and members we’ll be looking for your support to help make this happen.
P.S. If you have time take a moment to tweet @normanlamb welcoming him to his new post and asking him to play his part in passing a strong European extractive transparency law.
Paul Collier backs European transparency law
Guest post from Paul Collier, author of ‘The Plundered Planet: How to Reconcile Prosperity With Nature’ and member of ONE’s Africa Policy Advisory Board.
The ‘resource curse’ is one of the most persistent paradoxes of international development. For decades the natural resources of poor countries have been plundered: the few expropriating what should benefit the many, and the current generation squandering what should also benefit future generations. The current global boom in commodities provides many poor countries with an unprecedented opportunity to escape poverty, yet the default option is for history to repeat itself. One of the most pressing issues in the fight against global poverty is how to prevent this repetition.
Repetition is not inevitable. For example, Germany learnt from hyperinflation. But to avoid a repeat of the resource curse the pressures for plunder must be faced down. Some of the necessary actions must be taken by the governments of resource-rich countries, but we ourselves need to take complementary actions.
Fortunately we are now at a moment of opportunity, and Germany’s support will be crucial. The European Commission has published proposals that would oblige all European extractive industry companies to become more transparent in their operations abroad. If enacted, these companies will have to publish the payments they make to the governments of every country where they operate. The legislation aims to go at least as far as ground-breaking US legislation that was passed in 2010. This means that a global standard for legally binding transparency in the extractive industries is within reach for the first time. The French President is in full support of this initiative. Even Britain, where more extractive companies’ are headquartered than in any other EU-member state, used a G20 finance ministers meeting to express unequivocal backing. It is unsettling that the German government, a champion of extractive transparency in years past, is silent at this historic moment.
The draft disclosure requirements will provide the perfect complement to actions taken within the poor countries themselves. Citizens need the data that would be made available by these companies to better hold their governments accountable for the money they receive for the country’s natural resources. Over 600 civil society organisations worldwide have signed up to the ‘Publish What You Pay’ coalition. Citizens, many of whom have risked arrest to fight embezzlement, will be newly empowered with the tools they need to force positive change. As the Arab Spring so ably demonstrated, ordinary citizens care deeply about transparent and accountable governance.
Of course transparency is only a means to an end. The prize is the better use of huge resource revenues, enabling a dramatic improvement in social and economic development. In 2008 exports of oil, gas and minerals from Africa were worth roughly nine times the value of overseas aid ($393-billion versus $44-billion), creating considerable government income through licences and taxes. In many countries those revenues account for the vast majority of government revenues – more than 80% in the case of Angola. Even if enhanced transparency were only to improve the efficiency of natural resource revenue spending incrementally, it would easily yield more than Germany’s entire aid program for sub-Saharan Africa.
In a time of economic austerity across Europe policies like these which help African governments to mobilise their own resources for development are even more important. Aid budgets are now under pressure. In the long-run, fostering greater reliance on taxes can help develop cohesive states and reduce aid dependency.
The discussions on the detail of the new European legislation are now critical. For the new legislation to effectively empower citizens in situations like this, it needs to include the disclosure of financial information at the project level. Only these disaggregated figures give citizens and local communities the information to hold government accountable. In addition, financial information only at the country level will not help citizens curtail the official under-pricing of national assets, such as the case of the Democratic Republic of Congo where contracts have officially been sold for a sixteenth of the market price – an indication that kick-backs are taking place.
Project-level disclosure is also a way to improve the functioning of the natural resource market and therefore makes good business sense: wide discrepancies in the valuation of assets can be hidden by aggregating data at the country-level. A more efficient market system can operate if this secrecy ends. It is no coincidence that major investors successfully joined hands with civil society to have project –level disclosure included in the ground-breaking US legislation.
The good news is: the current draft of the European Commission includes project-level disclosure and both the French President Sarkozy and the British Premier Cameron support this critical detail.
Germany has been a strong champion for extractive transparency ever since the Heiligendamm G8 summit. This is evidenced by the long-standing support Germany gave to EITI, a voluntary multi-stakeholder transparency initiative that has worked well in resource rich countries that showed the will to improve their transparency. However, it is for those countries which ignore EITI that the new legislation is needed and Germany can reinforce its role as an international leader on extractive transparency by supporting the new law.
But while the German government has indicated its general support for this EU legislation some European partners have noticed that a number of German ministries remain sceptical of the key feature described above: project-level disclosure. In line with its excellent track record on improving extractive transparency, Germany should now endorse the current strong legislation. Improved accountability in the natural resource sector leads to more stability in resource rich countries and better markets – both central aims of the German resource strategy.
We are now at a rare moment: we know that some legislation will be enacted. But as with all legislation, the devil is in the detail. Lobbyists for the interests of continuing plunder and irresponsible business practices are attempting to dilute key features while paying lip-service to noble objectives. If we permit the lobbyists to win we become complicit in frustrating change: remember, the default option is for the current resource booms to be the biggest missed opportunity for poverty reduction in history. Germany needs to decide now whether it is happy to be complicit in frustrating this chance for change or if it wants to join the fight against a repetition of the hugely destructive resource curse.
This post first appeared in the Handelsblatt newspaper.
The African Charter on Democracy, Elections and Governance – you better take it seriously!
In three weeks, the African Charter on Democracy, Elections and Governance will enter into force. The Charter was adopted by the African Union (AU) five years ago. Now that fifteen member states have ratified it, the Charter becomes legally binding and operational. Guinea-Bissau, Nigeria and Cameroon were the 13th, 14th and 15th countries to ratify the Charter. Why should we bother about this document? A Charter that was ratified in majority by countries that don’t lead by example in terms of good governance; a Charter that might be just another paper tiger without any teeths; one of a range of legal documents that don’t change anything about the real lives of African citizens?
Not quite.
The African Charter actually doesn’t contain many new elements. But, much more important, it summarizes and reconfirms existing African engagements on good governance that the continent’s leaders have taken over the last thirty years or so. And the Charter takes them a step further, in operationalizing their implementation. So instead of adding to the pile, it tries to rationalize the African good governance architecture and improve its translation into reality.
Though the African Charter doesn’t reinvent the wheel, it still is a leading international convention in terms of good governance. First of all because the principles of the AU, which are enshrined by the Charter, are very far-reaching. For instance the AU has the right to take action in case of an unconstitutional change of government in one of its member states. Second, because the Charter is the only international convention that dares to take up the sensitive issue of democracy, while other treaties prefer sticking to human rights principles or anti-corruption measures.
The African Charter has already proved to be a useful tool. One of the first countries to ratify was Mauritania – just before a coup hit the country. In order to negotiate the return to constitutional order, the AU took the Charter as reference point. At that moment, the Charter was strictly speaking not yet legally applicable because it had not entered into force, but this didn’t matter as Mauritania had endorsed it. As this example suggests, the fact that the Charter has been ratified by some not-so-democratic countries is an encouraging sign, rather than simply a basis for criticism. These are the countries that potentially will need the Charter and in which this legal document could make a difference.
Last but not least, the process of the Charter itself should be acknowledged. After having been adopted by the AU in 2007, only four countries had ratified it after more than four years! So the Charter was at risk of disappearing before even having really entered the stage. The Pan-African Parliament took on this challenge. This Parliament, also called the PAP, is the equivalent of the European Parliament, but with some small differences: the African body has around 50 employees, the EU parliament 6000. The European Union parliamentarians have an official role in decision-making, the African Union parliamentarians are still limited to a consultative role. Knowing its limits, the Parliament partnered with civil society and launched a campaign called “11 before 2011” in order to get to 15 ratifications, the number needed for the Charter to enter into force. It took a lot of lobbying, several regional conferences, a documentary on TV, outreach to student activists in several countries and a year longer than initially planned, but now the campaign has reached its goal. Congratulations! Though this is not where the work ends: now the goal is to have the rest of the 53 AU member states ratify the Charter!
As the African Cup of Nations begins, let’s show corruption the red card
Today, world famous footballers from clubs across the world are gathering in Equatorial Guinea for the Africa Cup of Nations – the world’s third most watched football tournament.
Thanks to oil, Equatorial Guinea’s per capita wealth is similar to that of most European countries, yet poverty remains endemic and the vast majority of people can only dream of being able to afford tickets to the games. Many in the country have little or no access to running water, affordable health care or quality education. Nearly one out of every eight children dies before reaching their fifth birthday.
ONE has joined forces with African civil society group EG Justice to call on Europe’s leaders to take swift action to help combat the corruption and misuse of funds that has led to this extreme inequality in Equatorial Guinea. The European Commission has proposed legislation that would require oil, gas, mining and forestry companies to publish all the payments they make to governments – broken down to the level of individual projects – so that they can be held accountable by groups like EG Justice. We’re asking MEPs and member states to fully support these proposals, and ensure that essential aspects like project by project reporting are not watered down in the face of heavy corporate lobbying.
Tutu Alicante, the executive director of EG Justice, said:
“The government of Equatorial Guinea hopes that the recently completed luxury hotels, golf resorts, and shiny monuments will disguise the grinding poverty that dominates the lives of most people in the oil-rich nation. They must not be allowed to get away with this deception.
“Government secrecy allows officials in Equatorial Guinea to spend money according to their whims. The government spent 580 million Euros on Sipopo, a luxury resort with a private golf course. At least 13 presidential palaces have been or are being constructed in ten cities across the country, a rate of one palace for every 54,000 people in this country. This shows a shocking disregard for the needs of the people in Equatorial Guinea.”
We’ve already managed to get some media coverage of the issue in the UK, France and Spain, which will help put the issue on the radar of European leaders. But we’ll be keeping up the pressure until we get the legally binding measures that we need.
Beyond aid to open development
I came away from Busan feeling a bit queasy. Not because of the week-long jet lag and lack of sleep, or because Busan has been desperately disappointing for aid effectiveness. It has not, although it remains to be seen whether it will be remembered as the last whimper of the aid effectiveness agenda or the first hurrah of a global partnership for effective development cooperation.
Neither is my queasiness about donors not being held to account for their failure to meet previous commitments, nor about the fact that the aid effectiveness agenda remains somewhat poorly linked to evidence about development outcomes. Nor is it about the fact that there’s little honest discussion of the risks that are involved when investing in development, particularly in places with challenging governance environments. The queasiness comes from the fact that there remains a sense that “we” -– aid industry insiders, with money and power -– know best; as if having money and power necessarily means that one has relevant expertise. However, an antidote to my queasiness may be at hand.
Discussions at Busan briefly highlighted the Open Government Partnership (OGP) and its role in pushing forward greater transparency and accountability among both developed and developing countries. At a joint Busan event with Tony Blair’s Africa Governance Initiative, USAID played the opening video from the OGP event in September. By making the link between OGP and the aid effectiveness agenda -– a link noted by Owen Barder, too -– USAID made clear that making development cooperation more effective is not just about providing better services and vaccinating more children, but is also about providing people in developing countries with the information that they need to make good choices and to hold their governments to account.
So, while I left Busan feeling queasy, I also have a sense of optimism. Beyond aid, through open governance, there is the promise of open development -– a democratic development where people, not “experts,” have the power. As Rakesh Rajani puts it, “The purpose of development should not be to create and apply expert solutions, but rather to help enrich the conditions in which people can do more of what they already do well — by making it easier for people to get, compare and share information; to learn from each other and outsiders about how they have made things work; to search, experiment with and craft solutions; and to team up to get things done” (World Bank, Open Development report, September 2011).
The 2011 Corruption Perceptions Index: Demanding better government
Transparency International (TI) defines corruption as the abuse of entrusted power for private gain. This definition includes corrupt practices in both the public and private sectors. In an aim to quantify and compare perceived corruption levels across different countries, TI created the Corruption Perceptions Index (CPI) which ranks countries according to perceptions of corruption in the public sector.
TI has released the 16th annual index, which ranks 183 countries according to perceived levels of corruption. The 2011 CPI is an aggregate indicator that combines different sources of information about corruption and scores countries on a scale from 10 (very clean) to 0 (highly corrupt). The CPI is determined by expert assessments and opinion surveys which include questions about the bribery of public officials, kickbacks in public procurement, embezzlement of public funds and questions that probe the strength and effectiveness of public- sector anti-corruption efforts.
Public outcry at corruption, impunity and economic instability sent shock waves around the world in 2011. Protests in many countries quickly spread to unite people from all parts of society. Their backgrounds may be diverse, but their message is the same: more transparency and accountability is needed from our leaders. According to Huguette Labelle, chair of TI, “This year we have seen corruption on protesters’ banners be they rich or poor. Whether in a Europe hit by debt crisis or an Arab world starting a new political era, leaders must heed the demands for better government.”
No region or country in the world is immune to the damages of public-sector corruption and the vast majority of the 183 countries and territories assessed score below five on a scale of 0 to 10.
Key Findings
Overall, two-thirds of the 182 countries scored this year were given scores less than 5, which mean they are considered significantly corrupt. New Zealand, Denmark and Finland top the list with scores of 9.5 and 9.4 respectively, while North Korea and Somalia are tied at the bottom with a score of 1.0.
African states that performed comparatively well include Botswana with a score of 6.1, Cape Verde with 5.5 and Rwanda with 5.0. All three appear among the 50 “cleanest” countries. These three countries have consistently improved in the CPI rankings since 2008.
“Arab Spring” countries performed worse than in 2010 and all rank in the lower half of the index with scores below 4. Tunisia dropped from 4.3 to 3.8, Egypt from 3.1 to 2.9 and Libya from 2.2 to 2.0. South Africa has dropped consistently in the CPI rankings from a score of 4.9 in 2008 to 4.1 in 2011.
The rankings show that public sector governance that puts the interests of its citizens first is the most crucial aspect in countering perceptions of corruption. Governments must respond accordingly by increasing transparency in service delivery and resource allocation. For their part, citizens need to engage with their governments and continue demanding better performance from their leaders.
Success – down to you
I’m really pleased to share some good news: you’ve contributed to another successful campaign! Thanks to pressure from you and 65,000 others who signed our transparency petition, governments have taken a giant step forward toward making sure aid money has the greatest possible impact on reducing poverty. This means that in poor countries around the world aid spending will help more lives be saved, more kids get the chance to go to school, and more families lift themselves out of grinding poverty.
Together with our friends at Publish What You Fund, ONE presented a petition to governments meeting in South Korea last week demanding that they publish the details of the aid money they donate. And the pressure worked. Many donor governments and institutions published information about their aid spending while others, including the world’s largest donor, the United States, signed up to an international agreement committing to do so.
ONE’s Alan Hudson and Sara Messer present the Make Aid Transparent petition to UK Secretary of State for International Development Andrew Mitchell, along with Karin Christiansen of Publish What You Fund and other partners.
This is a vital development. Aid donors will be able to coordinate with each other, reducing waste and overlap. Developing country governments and organisations delivering projects on the ground will be able to plan better, because they will know how much money they are receiving, for what projects and for how long. What’s more, citizens in these countries will be able to hold their governments to account because they will know what results the government is supposed to be achieving with the money it receives.
We already know that aid, when spent properly, delivers amazing results. For example, over the last decade, 46.5 million more African children have been able to go to school, and the number of people receiving life-saving treatment for AIDS grew from 100,000 to 6.6 million. Thanks to pressure from you the agreements made last week now mean that aid money has the potential to deliver even greater results over the coming years.
Busan: A Bang or a Whimper?
The Fourth High Level Forum on Aid Effectiveness drew to a close on 1 December, with the Korean hosts able to celebrate the delivery of a new global partnership on effective development cooperation. Emerging powers including China and India have endorsed the document, a document that makes clear in its second paragraph that commitments that apply to traditional aid differ from those that apply to south-south cooperation, and that contains few clear and concrete commitments on making aid more effective.
For the glass half-full types, the conversation has been usefully broadened to consider issues that go far beyond aid and that involve new actors. Civil society had a seat at the table and the private sector was brought into the fold. For the glass half-empty types, the aid effectiveness gains that might have been achieved have been surrendered in the enthusiasm to broaden the conversation, or, perhaps, in the effort by some donors to avoid their aid effectiveness commitments.
ONE has been on the ground in Busan, pushing for greater transparency and accountability and a sharper focus on results. These issues – along with fragile states and engaging emerging powers – have been the primary issues discussed at Busan.
On transparency, there has been great progress. Firstly, the Outcome Document commits donors to making their aid transparent, in line with the International Aid Transparency Initiative. ONE has pushed hard on this, supporting the first-rate efforts of Publish What You Fund. Secondly, with a number of donors including Canada and the USA announcing that they will sign up to IATI – with the USA’s move announced by Secretary Clinton – information about more than 75% of aid will now be made public.
On accountability, the outcome document emphasizes that governments in developing countries need to manage public resources in ways that are transparent and accountable, and that allow and enable parliaments and civil society organizations to hold governments accountable. It also emphasizes the importance of effective institutions, a welcome nod to the fact that aid and development effectiveness are political as well as technical matters. These encouraging words on accountability will need to be given life through initiatives such as the Open Government Partnership and the Global Initiative on Fiscal Transparency.
Finally, results was perhaps the single biggest focus of Busan with speaker after speaker emphasizing that aid and development cooperation must be about achieving results that will, in time, mean that aid is no longer necessary. The outcome document makes clear that results monitoring should be country-led, and that further capacity is needed to be developed for citizens in developing countries to monitor their own progress and hold governments to account, which will be implemented through a global Action Plan to enhance statistical capacity.
The greatest test of Busan however will actually begin now, in building out a post-Busan global monitoring architecture with clear measurable indicators and targets that is inclusive of all actors, and holds all participants to account. It’s too early to say whether Busan will be remembered as a success or a failure. Over the coming months and years ONE will be working hard to ensure that Busan is remembered not as the last pathetic whimper of the aid effectiveness agenda, but as the first glorious hurrah of a wider more inclusive global partnership for effective development cooperation.
A Clear Win for Transparent Development
The Fourth High Level Forum on Aid Effectiveness isn’t even finished yet but we can already log big wins for transparent and accountable aid. In US Secretary Clinton’s keynote address at the forum in South Korea, she officially announced that the United States would be signing the International Aid Transparency Initiative (IATI), something that ONE has been pushing hard on in advance of Busan. As ONE’s US Executive Director, Sheila Nix said:
“Secretary Clinton’s announcement that the United States will join the International Aid Transparency Initiative (IATI) reinforces America’s leadership in making foreign assistance more transparent and accountable. Being open and clear about how the U.S. is spending foreign aid—where and on what—will help make aid more efficient and accountable to US taxpayers and will maximize resources to help those living on less than $1.25 lift themselves out of poverty.”
The US announcement followed on from another big announcement by Canada on Monday that they would also be joining IATI. The addition of these two major donors will bring the total number of IATI signatories to 26 and increase IATI’s coverage of aid to over 75% of global ODA flows.
This is great news for ONE members who supported the Make Aid Transparent campaign. On Wednesday at the forum the Executive Director of Publish What You Fund (PWYF), Karin Christiansen, presented the Make Aid Transparent petition during a high-level panel on transparency and accountability. 63,905 people signed the petition from over 180 countries, underscoring global public support for aid transparency.
ONE’s Alan Hudson and Sara Messer present the Make Aid Transparent petition to UK Secretary of State for International Development Andrew Mitchell, along with Karin Christiansen of PWYF and partners.
But more and better information is useless if people can’t access or understand it to make aid more efficient and hold governments to account. In order to improve accessibility and make aid info more user-friendly, the Open Aid Partnership was officially launched during the High Level Forum. The Open Aid Partnership is an initiative started by the World Bank Institute and other partner countries to provide visual mappings of aid projects, allowing for better donor coordination and targeting of aid. It also provides the technology for citizens to give feedback on development projects through mobile texting and online submissions, allowing for real-time monitoring and accountability! ONE supports the Open Aid Partnership and calls on more countries to sign up and provide their aid data. For donors that are already signatory to IATI, this is the next step to put transparency into action and turn aid information into development results.
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About the Blog
The International ONE Blog is a daily log of the anti-poverty movement. The site is operated by ONE staff, with guest contributions from ONE volunteers, members and allies.
The content of each post and each comment represents the views of that author and does not necessarily reflect the views of ONE. ONE does not support or oppose any candidate for elected office, and any post expressing support or opposition for a candidate is not endorsed by ONE.
TAGS: Africa, Corruption, Equatorial Guinea, Transparency