South Africa gears up for OGP Leadership by committing to Beneficial Ownership Transparency

South Africa gears up for OGP Leadership by committing to Beneficial Ownership Transparency

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#OGP15 was a very inspiring moment for open data supporters such as me. It was great to follow from Johannesburg and, to hear from colleagues that attended the summit the remarkable progress and initiatives that had been made around the world on open government. For others, open government is not a much of a priority as say vaccines for the poor, however, Uruguay de-bunked this notion when it walked away with the top spot for the open government awards in Mexico city at #OGP15 for its efforts to give its citizens unparalleled access to the performance indicators of health care providers. This is an example that illustrates how open government and investment in public services need each other. So when South Africa took the OGP chairmanship mantle at the #OGP15 in the same city in October 2015, doubting voices came up amongst #OGP15 participants. They worried  about whether the South African government will provide the continued momentum and leadership on open governance into 2016. SA’s commitment last week on launching a publicly accessible beneficial ownership transparency should be congratulated.

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From right to left: Nachilala Nkombo – ONE Campaign Africa Deputy Director; Ayanda Dlodlo – South Africa Deputy Minister for Public Service and Administration; OGP Africa conference participants.

Beneficial Ownership (B.O) transparency refers to the disclosure of the actual beneficiaries of corporate and trust entities conducting business in any jurisdiction. Why is this a problem? And, why should ordinary South African citizens care? Research demonstrates that anonymous companies, also called “Phantom firms” have been used to hide stolen assets; bribe public officials; evade sanctions; dodge taxes; launder drug money; and defraud citizens, businesses and governments. A World Bank review of 213 of the biggest corruption cases over the last 30 years found that 70% of those cases involved the misuse of corporate entities through anonymous shell companies. According to Global Financial Integrity, at least $1 trillion is syphoned from developing countries each year with very few of those responsible ever found or held accountable.

It’s for this reason we at the ONE Campaign are very excited about this new commitment by the South African government. Given South Africa is already a leader in budget transparency this is a significant positive step. It is a great step in broadening efforts towards achieving greater transparency, curbing money laundering and fighting corruption- a concern shared by both the governors and governed here in SA. The implementation of the BO commitment will make South Africa the first African country to have a public registry of beneficial ownership information. In Europe and the US we as the ONE Campaign have also advocated hard for BO because we know that’s its key in shedding light on anonymous structures that are used for corrupt and criminal activities. South Africa will be joining the UK in implementing a public register. This action is ahead of EU countries that plan to introduce central registers by 2017 as part of their implementation of the EU’s Anti-Money Laundering Directive.

It is now up to South Africa to shame the doubters by ensuring that the commitment is implemented. They say the devil is in the details, luckily as the SA government launches its   OGP National Action Plan at the regional OGP summit in Capetown next week May 5th -6th , it will have chance to elaborate implementation details. A concern we have at ONE is that   while the Financial Intelligence Centre Amendment (FICA) Bill due to be passed in 2016, requires the disclosure of beneficial ownership, the Amendment Bill in its current form omits the creation of a public central registry for beneficial ownership information.

We nonetheless commend the South Africa government for offering the global community this leadership on open governance as reflected in the new SA OGP action plan. In addition to BO commitments, South Africa has made other serious commitments on open data; open budgeting and strengthening citizen- based monitoring, which will massively benefit its citizens from Durban to Limpopo.

South Africa’s OGP plan and position could inspire other African countries such as Liberia, Tanzania and Kenya who are currently working on new action plans to make equally ambitious open government commitments that will have lifetime benefits for their citizens.

The Open Government Partnership (OGP) is a multilateral initiative that was launched in 2011 to provide a platform for domestic reformers to secure concrete commitments and make their governments more responsive, accountable and transparent to their citizens. The Country Chair hosts the OGP Global Summit every 2 years. This is the largest global gathering of open government practitioners from governments, academia, civil society and multilateral organizations. The summit is used to exchange experiences and share best practices and major developments in open government. This year, South Africa will host Regional Open Government Conference in Cape Town 5-6 May 2016 under the theme: Towards globalisation for advancing sustainable development through inclusivity- main subthemes being anti-corruption and inclusivity of citizens.

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