News items of worldwide relevance:
2006 Bribe Payer Index by Transparency
International shows
hypocrisy by many countries where multinational corporations pay bribes
directly or through their lawyers and other outsourced employees. See latest ranking along
with BPI published by Transparency International. Note that a higher BPI number means that
the country is less corrupt. Switzerland
has the highest BPI score meaning that the Swiss businesses have the least
tendency to pay bribes. However,
there is one problem with this stellar performance. But their banking secrecy laws do allow bribes being paid into
secret numbered accounts.
GLOBAL:
WOLFOWITZ’S CORRUPTION AGENDA
Paul Wolfowitz, President of the World Bank, has joined
with the heads of several regional development Banks in an anti-corruption
effort, which has provoked a staff backlash within the World Bank itself. The Bank has held up funding, canceled
contracts, blocked loans, interrupted projects, and postponed debt relief for
several countries, including India,
Chad, Bangladesh,
Kenya, Argentina
and Congo,
which are involved in various forms of corrupt practices. (The Washington Post, Feb.
20, 2006, summary by Marg Reynolds)
World Bank Leader Expects to Step Down. It was reported that the
president of the World Bank, James D. Wolfensohn, has said that he expects the White House will select a new
World Bank leader this year. This year Wolfensohn will retire as chief of the
World Bank. Wolfensohn’s future has been a subject of speculation. His second
five-year term expires in June 2005.
(The New York Times, January 3, 2005,
summary Sherldine Tomlinson).
ANNIVERSARY OF THE UN ANTI-CORRUPTION CONVENTION. December
7, 2004 is the one year anniversary of the signing of the UN
Convention against Corruption (UNCAC) by 114 nations. To date, 14 nations have ratified the
convention, all from emerging economies.
There has been a call for all nations, especially wealthy nations, to
ratify the convention. The World Bank
supports the UNCAC initiative and is working to find more interested donors
to fund these anti-corruption efforts.
The World Bank has also committed to continue to work with many other
international and national organizations and institutions to continue the
fight against fraud and corruption. (www.worldbank.org, December
7, 2004, summary by Andrew Myerberg).
APEC Leaders Commit to Fight
Corruption and Ensure Transparency.
The White House have issued a
fact sheet at the Asia-Pacific Economic Cooperation meetings in Santiago,
Chile, where President Bush and other APEC leaders launched the “Santiago
Commitment to Fight Corruption and Ensure Transparency” and the “APEC Course
of Action on Fighting Corruption and Ensuring transparency.” Leaders also
commenced the “APEC Anticorruption and Transparency Capacity Building
Program” to help developing economies meet their anticorruption commitments. (USINFO, November
23, 2004, summary by Sherldine Tomlinson).
Survey finds
rampant global corruption, hobbling poverty fight. According to a
Transparency international report, corruption is crippling the battle against
poverty and robbing oil-rich countries such as Iraq
of their development potential. Haiti
and Bangladesh
were perceived as the world’s most corrupt nations in the survey of 146
countries closely followed by Nigeria,
Myanmar and Chad. (Yahoo News (AFP), October
20, 2004, summary by Sherldine Tomlinson).
Iraq: Contractors for U.N.-Iraq aid AGREES to
congressional inquiry. It
was reported that two contractors for the United Nations oil-for-food
programme in Iraq
have agreed to cooperate with congressional panels investigating allegations
that the government of Saddam Hussein had siphoned billions of dollars from
it. Congressional investigators said that Cotecna Inspection SA, the
Switzerland-based company the United Nations hired in 1999 to monitor and
authenticate goods shipped to Iraq, and Saybolt International BV, the Dutch
company that monitored oil exports from Iraq, have arranged to cooperate with
House and Senate committees examining accusations of corruption in what was
the United Nations' largest relief programme. (The New York Times,
13 August 2004, summary
by Sherldine Tomlinson).
Subpoena seeks
Iraqi oil records. It
was reported that congressional committee investigating alleged corruption in
a United Nations humanitarian program for Iraq
has issued a subpoena for financial records from the French bank. According
to the chairman of the House Committee on Government Reform Thomas Davis, the
subpoena was necessary because the bank could not produce the documents
voluntarily. A report that was released in April by the U.S. Government
Accounting Office said that officials in the government of Saddam Hussein
received $10.1 billion in illegal revenues over the course of the six-year
program. The United Nations started the program in 1997 so that Iraqi oil
revenues could be used to pay for food, medicine and other goods, easing the
effects of the economic sanctions imposed on Iraq
after its 1990 invasion of Kuwait. (International Herald Tribune, 16
July 2004, summary by Sherldine Tomlinson).
Corruption arrests
in World Bank project. The
World Bank said Tuesday that Guinea
has convicted three people involved in corrupt activities related to bank
projects. The international agency
said the convictions come after Guinea’s
justice minister followed up on an investigation by the World Bank on suspect
activities by contractors to the project which was reported to the government
last October. According to the bank vice president for Africa Callisto
Madavo, "These convictions show that fraud and corruption will not be
tolerated on World Bank-financed projects. (Washington Times, June
29, 2004, summary by Sherldine Tomlinson).
World Bank, IDB Say
Need To Do More To Fight Corruption. According to World Bank and IDB
officials, the World Bank and Inter-American Development Bank are making
progress fighting corruption at multilateral development banks. According to
Hector Morales, acting US
executive director to the Inter-American Development Bank, the IDB has
"accelerated" its progress in fighting corruption, "but still
has much work to do." Morales further went on to say that The World Bank
has instituted reforms to eliminate conflicts of interest and possible corrupt
practices among its staff. (World
Bank Press Review, May 14, 2004,
summary Sherldine Tomlinson).
World Corruption May Top $100 Bln. According to Sen. Richard Lugar, an Indiana Republican,
corruption has cost the lives of uncounted individuals contending with
poverty and disease. Lugar commended World Bank President James Wolfensohn
for bringing greater attention to the issue, but also said that, Corruption
remains a serious problem. (Yahoo
News (Reuters), May 13, 2004,
summary by Sherldine Tomlinson).
UN chief hits out at fraud claims. The United Nations Secretary General Kofi Annan has
rejected allegations of corruption in the UN-administered oil-for-food
programme in Iraq.
Annan described reports that UN officials had colluded in smuggling Iraqi oil
through Turkey
to evade sanctions as “outrageous and exaggerated”. Anna told a news
conference that “We had no mandate to stop oil smuggling,” (BBC News, April
30, 2004 summary by Sherldine Tomlinson).
Study finds 25
nations hindered by corruption. A
survey of government accountability and openness in 25 countries around the
globe has found that each one is challenged by corruption and lacks
sufficient protections against electoral abuses, including developed
democracies such as the United States, Germany and Japan. The resulting
report produced a ranking of nations in which none was labeled "very
strong" on integrity of key institutions and accountability to the
public. (The Washington Post
30 Apr 2004 summary by Sherldine Tomlinson).
U.N. Under Probe,
Annan Assails CRITICS. Secretary-General
Kofi Annan accused critics of the U.N. oil-for-food program of treating
allegations of corruption as fact and ignoring the programmes role of
providing aid to nearly every Iraqi family.
Annan said that he met Wednesday with Benon Sevan, who headed the
oil-for-food program and has been accused of receiving kickbacks from Saddam
Hussein’s government, to discuss the allegations and cooperation with the
investigation. The U.N. chief also said that any U.N. official found guilty
of accepting bribes or kickbacks would be dealt with very severely. (The New
York Times, April 23, 2004,
summary by Sherldine Tomlinson).
Corruption survey singles
out ex-leaders. A global watchdog has identified what it said were
the world’s most corrupt former heads of government, singling out leaders of Indonesia,
the Philippines
and the former Zaire.
The transparency international found that widespread political corruption
undermines the stability of developing countries and damages the global
economy. (The Guardian 26
Mar 2004 summary by Sherldine Tomlinson).
South Korean IOC vice president indicted on
corruption charges. International Olympic Committee vice
president Kim Un-yong has been indicted on charges of taking bribes and
embezzling funds from South Korean sports organizations. Kim is charged with
embezzling 3.84 billion won (US$3.28 million) in funds from the World
Taekwondo Federation, the World Taekwondo Headquarters, which issues
taekwondo credentials as well as other sports organizations. (Associated Press 13 Feb 2004 summary by Sherldine Tomlinson).
Nations sign UN anti-graft pact. According
to UN reports more than 100 United Nations’ members are meeting in Mexico
to sign a landmark convention against corruption. The first legally-binding
international agreement on the issue is aimed at making it easier to hunt
down corrupt officials and to recover illicit funds. Mexico
and the United States
were among the first to sign. The terms of the treaty were agreed in October,
but will only enter into force when it is ratified by 30 countries. (BBC News, December
10, 2003 summary by Sherldine Tomlinson).
UK: Special investigation: BAE accused of hiding cash
paid to win deals. It was reported that Britain’s
biggest arms company stands accused of running an international system of
secret commission payments, using Swiss banks and a tiny island in the Caribbean.
The allegations, by sources involved in the transactions, are based on Swiss
bank records. BAE has denied any illegality or wrongdoing. (The Guardian 05 Dec 2003 summary by Sherldine Tomlinson).
UN GENERAL ASSEMBLY APPROVES FIRST GLOBAL TREATY AGAINST
CORRUPTION On 31 Oct, 2003, a landmark anti-corruption treaty which requires
politicians to disclose their campaign finances and countries to return
tainted assets to the nation they were stolen from was adopted by the UN
General Assembly. As scheduled, the signing conference will be held in Merida,
Mexico on Dec. 90-11,
and the treaty will enter into force on the 90th day after 30 nations have
formally ratified it. (AP, 31 Oct
2003, summarized by Hanh Vu).
Global Competitiveness Raanking
http://www.weforum.org/pdf/Gcr/GCR_2003_2004/Competitiveness_Rankings.pdf
World Economic Forum ranks are a useful indicator.
GLOBAL: GLOBAL CORRUPTION INDEX HIGHLIGHTS ENDEMIC SLEAZE
2003’s CPI’ reported by TI reveals that most of developing countries now
facing high corrupt epidemic while several other developed countries slip
their ranks on the list. The head of a global graft watchdog called for
further assistance from rich nations in a bid to tackle endemic corruption in
developing countries. According to him it’s the mutual support not penalty
should be considered an effective method to curb ill practices there. (AFP, 07
Oct 2003, summarized by Hanh Vu).
UN treaty against
transnational organized crime enters into force. The United Nations
Convention against Transnational Organized Crime, the first legally binding
treaty to fight crime on a worldwide scale, has entered into force. This
requires the member states to cooperate on issues ranging from money
laundering to human trafficking. (United Nations, September
30, 2003, summary by Sherldine Tomlinson).
Engineering &
Construction Industry Tackles Global Corruption. The World Economic
Forum today announced a major breakthrough in the fight against corruption in
the engineering and construction industry. Leading members of the industry,
who make up the World Economic Forum’s Governors for Engineering &
Construction, have established a multinational task force to develop
anti-corruption principles to guide companies that participate in engineering
and construction procurements around the world. According to the report, strong
anti-corruption policies within the E&C industry will promote the
principles of transparency, accountability and responsibility for the
long-term benefit of all stakeholders.
(World Economic Forum, July
31, 2003 summary by Sherldine Tomlinson).
UNODC Strengthens
Cooperation Among International Organizations to Fight Corruption. Following
a two day meeting hosted by the United Nations Office on Drugs and Crime,
representatives of a number of UN programmes and other intergovernmental and
nongovernmental organizations, agreed to formalize their interagency
coordination mechanisms and to set up a functioning coordinating group to
oversee the regular exchange of information and experiences as regards their
anti-corruption work. Participants also stressed the need to take a more
proactive approach to corruption by identifying high-risk areas, such as
procurement, and concentrating efforts in those fields to strengthen the
culture of prevention, thereby moving away from a reactive culture. (UNIS
Press Release, July 29, 2003,
summary by Sherldine Tomlinson).
Convention AgainSt
CORRUPTION. The
final round of negotiations on a United Nations treaty aimed at fighting the
proliferation of corruption has begun in Vienna,
with more than 110 Member States expected to discuss remaining areas of
divergence in order to reach consensus. The sixth session of the Ad Hoc
Committee for the Negotiation of the UN Convention against Corruption will
focus on areas where divergence still exists, which include the search for a
definition of corruption, assets recovery and the question of whether to
sanction only public, or also private, corruption. Finalizing the text would
allow the new instrument to be submitted to the General Assembly at its 58th
session this September and to the High-level Signing Conference scheduled to
take place in Merida, Mexico.
(The Accra Daily Mail, July 23, 2003,
summary by Sherldine Tomlinson).
UN CRIME CONVENTION AGAINST MAFIA STARTS SEPT.29 The UN
convention against Transnational Organized Crime - the first of its kind
among crime-control measures, namely the criminalization of participation in
an organized criminal group, money-laundering, corruption and obstruction of
justice, is set to come into force Sep. 29. According to executive director
of the US Office on Drugs and Crime, Antonio Maria Costa, the convention is so far signed on by 147
countries worldwide to counter the worldwide challenge of organized crime. (UN
wire, 07 Jul,2003, summary
by Hanh Vu).
U.N SECRETARY GENERAL ANNAN DENOUNCES CORRUPTION AS
OBSTACLE At the opening of the
Executive program on Corruption control and Organizational Integrity at
Harvard Universty UN Secretary General Kofi Anna said that corruption is
"insidious menace" that obstructs the economic and social
development worldwide. According to him, UN should be in the front line in
the fight against corruption, hoping that progress against the problem would
gain in December when UN member states gather in Mexico
City to sign the UN Convention Against Corruption,
which would criminalize diverse forms of corruption and oblige signatories to
protect their institutions from it. (Vietnam News Agency, 12
Jun 2003, summary by Hanh Vu).
EX-UNMIK OFFICIAL JAILED FOR EMBEZZLEMENT:- Joe Trutscher,
a former official with the UN Mission in Kosovo got a 3½ years jail term on
Tuesday after a Court in Bochum Germany found him guilty of embezzling about
$4.3 million from KEK Electrical company. The money was deposited in his
accounts in Gibraltor. He had said he was going to use this money to secretly
raise the salaries of UN energy workers. By the time her turned himself in
late last year, he had spent $445,000 of the money. (UN WIRE JUNE
18, 2003, SUMMARY BY DAVIS
J. WEDDI, STOCKHOLM SWEDEN).
GERMANY, GLOBAL & LESOTHO: GERMAN'S FIRM GUILTY OF
LESOTHO BRIBERY Following the Canadian company Acres International's
conviction which forced the company to pay price for bribing high-ranking
officials in Lesotho, the international engineering company Lahmeyer of
Germany recently was found guilty on giving bribes to Masapha Sole, former
chief executive of the Lesotho highlands water projects, who was sentenced to
15 years in jail last year for taking grafts. (The Guardian 19 Jun 2003,
summary by Hanh Vu).
EU BIDS TO CUT DOWN WORLDWIDE ILLEGAL TIMBER TRADE
According to a draft proposal made by the European Union, once a country or
regional bloc has signed up to a Forest Law Enforcement. Government and Trade
(FLEGT) agreement, the EU will refuse to accept imported timber from that
state unless it is certified as legal. A voluntary timber certification
system that might lead to a global agreement to clean up the $150bn. global
forest product trade is to be launched by the European Commission, said the
draft. The EU's proposal will target southeast Asia, south America, central Africa
and Russia.
The EU would help less developed countries improve their judiciary, police
and military to help to stop illegal logging. (Reuters 20 May 2003, summary
by Hanh Vu).
SALK LAKE TRIAL SET TO IMPLICATE IOC CHIEFS Olympic bosses
face a new round of corruption allegations when the 1998 Salt
Lake City cash-and-sex-for-votes scandal set to go to
trial in a Utah courtroom later
this year. Tom Welch and his co-defendant Dave Johnson will face jail
sentences with 15 charges of conspiracy, bribery, racketeering and fraud if
they do not prove they were victims of IOC greed. After 10 low-ranking
members, mostly from the developing world, were ejected in late 1998 when the
scandal broke, some of the biggest names, friends of disgraced IOC president
Juan Antonio Samaranch can now expect to be named in the trial. (Daily Mail, 24
Apr 2003, summary by Hanh VU).
GLOBAL. CHOCOLATE INDUSTRY MAKES WEAK EFFORT TO END CHILD
SLAVERY ON COCOA FARMS. The U.S. Agency
for International Development estimates approximately 300,000 children work
on cocoa farms, 64% below the age of 14 and the vast majority unpaid.
Hershey's and M&M/Mars earned $13 billion in chocolate sales from cocoa
primarily imported from the Ivory Coast,
the world’s largest cocoa farm producer and a practitioner of brutal child
slavery. Hershey’s and other major
chocolate producers have pledged to commit themselves to a plan to produce
slavery-free chocolate by July 2005. However
critics and child slavery monitoring agencies report little progress, citing
that the companies have failed to enact serious measures to end child slavery
practices. At issue is the industries’ avoidance of fair cocoa pricing and
it’s role in perpetuating child slavery. Fair pricing can provide farmers
with livable wages but threatens chocolate producers’ profits. (Salon Magazine, Feb.
14, 2003, http://www.salon.com/news/feature/2003/02/14/chocolate/,
summarized by Kelly Kristen).
US SETTING GOOD EXAMPLE BY DISCLOSING ASSETS OF POLITICAL CANDIDATES, on line. See http://www.public-i.org
BOOK
ARGUES THIRD WORLD ETHNIC HATRED A CONSEQUENCE OF CORRUPT LEADERS USING
EFFECTS OF FREE MARKET DEMOCRACY.
Yale law professor Amy Chua’s book “World on Fire: How Exporting Free
Market Democracy Breeds Ethnic Hatred and Global Instability” discusses how
the West’s impetus to export democracy as a panacea against tyranny, to
countries lacking the infrastructure necessary to support it, has the
unintended consequence of sparking violent ethnic conflict. Countries typically affected often have an
economically powerful ethnic minority in control of the dominant markets and
a poverty stricken majority. Chua
argues that rapid conversion to democracy enriches the market controlling
majority, while at the same time empowering the impoverished majority, who
then scapegoat the advantaged minority as the cause for the majority’s
ills. The result are a highly
predictable set of tensions that foster the emergence of morally corrupt
demagogues who incite the majority to violence against the minority. Regions
following this pattern include Rwanda,
Southeast Asia, Russia,
Yugoslavia,
the Philippines,
Indonesia,
and East Africa. (Salon Magazine, Jan.
13, 2003, http://www.salon.com/books/review/2003/01/13/democracy/index.html,
summarized by Kelly Kristen).
Interpol chief says fighting corruption
essential in the war against terrorism . According to the Chief of
Interpol, law enforcers around the world should not let the war on terrorism
undermine efforts to fight other serious crimes. Interpol Secretary-General
Ronald K. Noble also warned that other crimes, particularly corruption, could
feed into terrorism. Noble said Interpol has sought to stop the global
movement of terrorists by creating a database of stolen passports, giving
police from its 181 member countries access to ID numbers on stolen travel
documents that can be used by terrorists to move about. (Yahoo News (AP), January
22, 2003 summary by Sherldine Tomlinson).
ITALIAN
IN MALAYSIA
WINS FIGHT VS EXTRADITION TO INDIA
($1.4BN BOFORS ARMS SCANDAL). Ottavio Quattrocchi, an Italian businessman, is
accused of accepting US$7.3 million from Swedish arms maker Bofors to
facilitate the sale of 400 artillery guns to the Indian army in 1986. Paying
or receiving commissions on arms sales is prohibited by law in India.
A Malaysian court quashed extradition proceedings against the Italian
businessman, who is not going to be sent to India
to face the corruption charges. Sessions Court Judge Akhtar Tahir agreed with
Quattrocchi's lawyers that documents filed by Indian authorities were vague
and insufficient. (Dow Jones Newswires, December
2, 2002, summary by Pavlidis George).
STATE
NEWSPAPER EDITOR JAILED 14 YEARS FOR CORRUPTION Reports on Saturday said Fu
Guiyu, former editor of the Shenyang
Daily - a Communist Party newspaper in northern China, who was arrested in
October 2001, had been sentenced to 14 years in prison for taking more than
590,000 yuan (US$72,000) in bribes and confiscating 80,000 yuan (US$10,000)
in company property. No comment from the Shenyan Daily. Shenyang,
the biggest city in China's
northeast, has been rocked by a series of corruption scandals over the past
two years that brought down top party and government officials. (The Star, 23
Nov 2002, summary by Hanh Vu).
ASSET
MANAGER'S ETHICAL PROJECT (PROJECT FOR CORPORATE RESPONSIBILITY) A three-year
project to develop principles for corporate responsible in global operations,
especially in developing countries has been launched by Insight Investment,
the asset manager of banking group HBOS. Besides, It is found in this code
broad guidelines which still needed to be greater clarity for companies on
child labour, bribery and corruption, and human rights issues.( Financial
Times, 19 Nov 2002,
summary by Hanh Vu).
ABACHA'S
SON WANTS MONEY HELD BY BANKS Mohammed Abacha, son of Nigeria's late military
ruler General Sani Abacha, who was recently released from three years in
prison on charges of money laundering and corruption, has instructed lawyers
to retrieve millions of dollars which he says are rightfully his. Banks in Europe
have frozen accounts holding money allegedly siphoned off while General
Abacha ruled Nigeria
from 1993 to his death in 1998. (The
Independent, 20 Nov 2002,
summary by Hanh Vu).
Liberty = Prosperity, Greater economic freedom seems to lead to
greater prosperity. 2003 Index of Economic Freedom by the Heritage Foundation and The Wall
Street Journal suggests that economic freedom has advanced throughout the world;
every region has improved. World-wide, 74 countries have better scores, 49
have worse scores, and 32 have scores that are unchanged. Of the 156
countries numerically graded in the Index, 15 are classified as
"free," (with GDP exceeding $27,000 per capita. Less than half is
earned in 56 "mostly free" countries. Income is only around $3000 for 74 as
"mostly unfree," and even lower for the 11 "repressed" countries. Latin
America performed the worst as Chile
dropped out of top 10. Asia has both the freest
countries (like Hong Kong and Singapore)
and most repressed countries. Europe
is actually freer than socialist rhetoric might suggest. Estonia
made great strides. Ms. Mary O'Grady, Gerald P. O'Driscoll Jr. and Edwin J. Feulner
edited the Index (Nov.
12, 2002, Wall St. J.
Summary by H. Vinod).
JOURNALISTS
FACE INJURY AND DEATH FOR THE TRUTH (INTERNATIONAL PRESS FREEDOM AWARDS) 31
journalists died on the job last year, eight of them while covering the war
in Afghanistan.
Another 110 were thrown in jail, an increase of almost 50% over 2000 due to
sins known as "truth exposure", according to the international
pressure group Reporters Without Borders. To honour journalists' contribution
to the world's advancement, this year 's International Press Freedom Awards,
which sponsored by the Canadian Journalists for Free Expression, are said to
be presented to Lira Bayseitova, who
exposed government corruption in her native Kazakhstan; Ahmed Abdisalam Adan, Mohamed Elmi and Ali
Shamarke, three Somali-Canadians who returned to their war-torn native
country to establish HornAfrik, a modern and independent radio and TV network
that airs the only reliable information there; The Star's Kathleen Kenna, who
was critically injured in Afghanistan. Kenna, who is still on leave, has won
the Tara Singh Hayer Award, which goes to a Canadian journalist and
HornAfrik's Elmi, 46, Canadian, who brought "state of the art
broadcasting" and impartial journalism to the country of his birth. (Toronto Star, 12
Nov 2002, summary by Hanh Vu).
PROFITS FROM WAR International Consortium of Investigative Journalists has identified some 90 companies and a small group of individuals with connections to governments, multinational corporations and, sometimes, criminal syndicates in the United States, Europe, Africa and the Middle East that have profited from war commerce. Read more in ICIJ's 11-part series http://www.icij.org or Visit http://www.public-i.org
French pass
rights plan. The countries of the Francophone yesterday adopted a plan
to penalize, even expel, dictators and corrupt leaders among them that defy
standards of democracy and human rights. The organisations of 54 members approved
the declaration at the final day of the ninth summit of French-speaking
countries, which was being held in Lebanon.
The position marked a departure from past summits that addressed cultural
issues and avoided criticizing corrupt regimes. Prime Minister Jean Chretien
praised the gathering, saying that the meetings are very useful because we
can discuss all problems, even human rights, electoral systems and judicial
systems.(Calgary
Sun, October 21, 2002,
summary by Sherldine Tomlinson)
UN
EXPOSES CONTINUING PLUNDER OF CONGO.
According to a United Nations report, although Zimbabwe,
Rwanda and Uganda
have withdrawn their armies from the Democratic Republic of the Congo (DRC),
they are still plundering the country through corrupt DRC government
officials and criminal networks. Several senior figures are named in the UN
report to the UN Security Council. According to the report, "the looting
that was previously conducted by the armies themselves has been replaced by
organised systems of embezzlement, tax fraud, extortion, the use of stock
options as kickbacks and diversion of state funds." The report urges for
financial restrictions on 29 companies and 54 individuals allegedly involved
in the looting. (The Independent, October
22, 2002, summary by Pavlidis George).
Report Finds
Corruption a Serious Problem in International Business. According to reports, financial
corruption remains a serious problem in international business according to a
new survey released by a business risk consultancy. The survey, by the
Control Risks Group, found of companies in Britain,
Germany, the United
States, Hong Kong and
Singapore, 40
percent believed they had lost business in the last five years because a
competitor paid a bribe. CRG found that only 56 percent of British companies,
38 percent of German, and 30 percent of Dutch companies were familiar with
the 1997 OECD anti-bribery law. The law makes it possible to prosecute
companies in their home countries for paying bribes abroad. The survey also
found that British companies were the most sensitive to corruption risks,
with 48 percent saying they had stayed away from otherwise attractive
investments because bribes were encouraged. (VOA
News, October 18, 2002,
summary by Sherldine Tomlinson).
LAWS
FAIL TO HALT INTERNATIONAL BUSINESS BRIBERY 40% companies in the US, UK,
Germany, the Netherlands, Hongkong and Singapore asked believed that they had
lost business in the last five years because a competitor had paid a bribe
despite the widespread introduction of OECD anti-bribery convention some
years ago, a survey carried by the London-based Control Risks Group (CRG)
revealed. The survey found that UK
companies were the most sensitive to corruption risks, with 48 per cent
saying they had stayed away from otherwise attractive investments because
bribes were asked for. By contrast German companies were less likely to
introduce management practices to counter corruption than their OECD
counterparts, with 60 per cent perceiving the risk to be of "no real
significance." US companies were the most likely to have formal
agreements with agents that they would not pay bribes on the company's
behalf. However some 67 per cent of respondents in the survey believed that
US companies still used middlemen to circumvent anti-corruption legislation.
(Financial Times, 15 Oct 2002,
summary by Hanh Vu).
MONEY
LAUNDERING BLACKLIST NO LONGER INCLUDES RUSSIA AND DOMINICA Russia, Dominica,
Niue and the Marshall Islands, the countries appeared on the blacklist of
countries that fail to counter such a crime of money laundering since
2000, have been removed from the
blacklist, whereas 11 countries remain on the list are Cook Islands, Egypt,
Grenada, Guatemala, Indonesia, Burma, Nauru, Nigeria, Philippines, St.
Vincent and the Grenadines, and Ukraine, said the Paris-based Organization
for Economic Cooperation and Development (OECD). This move, according to
Russian officials, will help the nation to
attract more investment inflow to the country in the years to come.
(AP, 12 Oct 2002,
summary by Hanh Vu).
GLOBAL:
BRAZILIAN BUSINESSMAN, SLOVAK JUDGE AND GERMAN PROFESSOR AWARDED FOR FIGHT
AGAINST CORRUPTION Luis Roberto Mesquita, 43, a Brazilian businessman who
challenged local officials to govern cleanly; Jana Dubovcova, 50, chief
justice of the district court in the central Slovakian city of Banska
Bystrica who initiated efforts to wipe out courtroom bribery and Peter S.
Schoenhoefer, 67, a professor of pharmacology who has taken on drug makers
whom he accused of paying medical professionals to promote the unnecessary
prescription of their medications are to be given this year's Integrity
Awards on Oct. 11 in Casablanca, Morocco. The award have been handed out
annually sine 2000 to underline the effort of people and organizations who
have shown bravery or special initiative in combating corruption, according
Transparency International. (AP, 30
Sep 2002, summary by Hanh Vu).
WORLD'S LEGISLATORS WILL GATHER TO FIGHT
CORRUPTION 126 lawmakers from 40 countries will attend a 3 day conference
(Oct. 13-16) organized by Mr. John Williams, MP for the Alberta riding of St.
Albert and chairman of the commons public accounts committee and the
Ottawa-based Parliamentary Centre (non profit research institute) at
Parliament Hill - Ottawa - Canada to launch the Global Organization of
Parliamentarians Against Corruption (GOPAC) and discuss on practical ways
parliamentarians can keep tabs on their governments through institutions such
as auditor-generals offices, public accounts committees and question periods.
The organization will have regional chapters around the world, designed to
support legislators who risk their lives by speaking out against corrupt
governments. (National Post, 19 Sep
2002, summary by Hanh Vu).
GRAFT
'A BIGGER RISK TO BUSINESS THAN TERRORISM'
Economist Intelligence Unit (EIU) said in rating 60 countries across
the globe that the corporate world faces a much bigger risk from corruption
and bureaucracy than it does from terrorism. Its findings show that the
average rating for security risk was just 35, compared to 59 for the
government effectiveness risk (zero is the least risky score.) China,
Indonesia and
Pakistan in Asia
were listed as having high government effectiveness risk while Singapore
had the best overall business operations risk rating in the analysis, the
Business Times reported. (The Straits
Times 09 Sep 2002, summary by Hanh Vu).
COMPANIES
WERE TOLD TO ROOT OUT CORRUPTION A UK government-backed initiative known as
Publish What You Pay to make oil, gas and mining companies report all
payments made to politicians overseas, which launched in June this year and
still remains unclear whether the move would be based on introducing
regulation or would appeal to companies to take voluntary action, is intended
to reduce corruption and allow local
people in the developing world see how much is being paid to politicians. It
is thought if the figures had to appear in company accounts it would be a
severe blow to those guilty of corruption and the payments would soon
disappear. Senior politicians in many developing countries are said to be in
favor of payments appearing in company accounts because it might root out
low-ranking corrupt officials who operate virtually unrestrained.
(Accountancy Age, September 5, 2002,
summary by Hanh Vu).
CORRUPTION
PLAGUES ACADEME AROUND THE WORLD
From diverse cultures such as found in China,
Mexico, Kenya,
Japan and the
U.K.,
corruption in higher education is becoming a common denominator for
institutional educators. Ghost
writing of theses and taking tests for others is blended with institutional
corruption, which includes selling fake diplomas and using political
influence for admission or grading to the benefit institutional supporters
and their families. Transparency
International (TI) has identified a link which almost certainly extends to
higher education by which corruption’s victims are the world’s poorest
people. Efforts to improve education
abroad through exchange programs may limit confidence of American academics
if students habitually buy grades rather than earn them. (The Chronicle of Higher Education), Aug.
6, 2002, summary by Marg Reynolds).
US$320M
IN 'CORRUPTION FEES' PAID IN CARIBBEAN, SAYS UN OFFICIAL 10% of an estimated US$3.2
billion in illegal drugs passed through the Caribbean in 2000 was paid for
so-called "corruption fees" said Flavio Mirella, the United Nations
Drug Control Programme's (UNDCP's) acting resident representative in the
region. According to him corruption has created conditions in which public
servants are gradually drawn from minor forms into more serious activities
(The Jamaica Observer, July 30, 2002,
summary by Hanh Vu).
NO
WHALING VOTES ´SOLD´ FOR JAPANESE AID Six Caribbean
countries which includes Antigua, Dominica,
Grenada, St
Kitts-Nevis, St Lucia
and St Vincent have said they will support the
resumption of commercial whaling, but they have also rejected accusations
that they have sold their votes to Japan
or any other pro-whaling country. The islands will vote at the International
Whaling Commission meeting in Shimoneseki, Japan,
for an end to a ban on commercial whaling. The Commission is expected to vote
at the end of its plenary session. Some of the six islands also plan to
develop whale watching for tourists.(Financial Times, May
20, 2002 summary by Sherldine Tomlinson).
FIFA
OFFICIAL VOWS TO SPEAK OUT OVER CORRUPTION CLAIMS It was reported that Michel Zen-Ruffinen, shocked the world football
with allegations of corruption inside Fifa. Zen-Ruffinen’s allegations
concern the conduct of Sepp Blatter, Fifa’s embattled president, who is
embroiled in a bitter election campaign to retain his post. Zen-Ruffinen’s
have accuse Mr Blatter of involvement in corrupt practices and attempting to
hide the true state of Fifa’s fin-ances. Mr Blatter, who has consistently
denied any wrongdoing, maintains his innocence. (Financial Times, May
14, 2002, summary by Sherldine Tomlinson).
FIFA ALLEGATIONS TO BE FILED BEFORE WORLD CUP. Michel
Zen-Ruffinen, Fifa’s general secretary, has compiled a 21-page dossier with
300 pages of ancillary evidence, detailing alleged corruption at the football
body. The dossier will be passed to a Swiss judge. Allegedly, up to SFr800m
(Dollars 500m) has been lost during Mr Blatter's presidency, in a number of
corrupt practices, including paying a former referee Dollars 25,000 in return
for "information". Mr Blatter has denied any wrongdoing. However,
Chung Mong-Joon, head of the Asian Football Confederation, said: "Mr
Blatter must face a thorough investigation over the abuse of his authority
and misuse of Fifa funds." (Financial Times, May
9, 2002, summary by Pavlidis George).
Johannesburg,
INTERNATIONAL CRICKET COUNCIL ANTI-CORRUPTION UNIT CHECKS 2003 WORLD CUP
VENUES. The anti-corruption unit of the International Cricket Council’s (ICC)
has empowered a team to carry out a security audit of match venues of the
2003 Cricket World Cup. Bob Smalley and Bruce Ewan from the unit, together
with members of the World Cup Security Directorate, will undertake
inspections of host grounds in South Africa
and Kenya.
“By working closely with the security directorate we will be able to cover
both specific anti-corruption measures as well as the physical ground
security requirements for each stadium,” said Lord Condon, director of the
ICC unit. This means that South Africa’s
leading international venues will be among the first in the world game to
meet the anti-corruption standards recommended by last year’s Condon Report.
(Indo-Asian News Service, April 27,
2002, summary by Pavlidis George).
Pristina,
Yugoslavia, UN
AUTHORITIES INVESTIGATE CORRUPTION IN KOSOVO. The U.N. authorities in Kosovo
are investigating into a corruption case, which involves some 4.5 million
euros. Andy Bearpark, the official responsible for reconstruction and
economic development in the UN mission in Kosovo has now evidence of this
alleged fraud. Mr. Bearpark identified the Kosovo Energetic Corporation,
which handles power supply for the province, as a suspect in this corruption
case. The alleged scheme involves international aid money for the purchase
and import of electricity during the last three harsh winters in Kosovo.
According to the chief UN administrator of the Yugoslav province, Michael
Steiner, "there will be zero tolerance for crime." (Associated
Press, April 30, 2002,
summary by Pavlidis George).
Study finds world´s forests endangered
A Washington-based
environmental research group warns that the world’s forests are rapidly
declining which is the result of unsustainable development. New reports
released by the World Resources Institute’s Global Forest Watch say 40
percent of undisturbed forests could be lost in 10 to 20 years. The institute
blamed mining, road construction and logging activities. However, much of the
threat arises from bad economics, poor management and corruption. While many
countries have enacted laws to protect untouched forestland, regulations are
not always enforced. The survey results also cited the country Indonesia
as an example, claiming that 70 percent of its timber production is illegally
logged. It also targeted Central Africa as an example
of poor management. The reports also say logging concessions cover more than
half of the world’s second largest tropical rainforest. In addition to these
areas, the institute’s two-year study also covered North America,
Russia, Chile
and Venezuela. (VOA News, April
3, 2002, summary by Sherldine Tomlinson).
Trifin
J Roule at has posted the latest issue of the Corruption List: http://www.corruptionlist.com. In
List Members’ contribution section see (1) A report by Global Witness
entitled ‘All the Presidents’ Men’, which links the economic and
political disorder of the Angolan conflict to kickbacks on arms trafficking,
and a highly over-priced military procurement process. The report reveals how
a network of international leaders, bagmen and influence peddlers – ‘the
Presidents and their Men’ - have presided over a system that has led to the
embezzlement of Angola’s oil wealth. The report also examines links between
this process and the ‘Angolagate’ arms-to-Angola scandal, uncovered in France
at the end of 2000. (2)Also see http://www.house.gov/reform/newindex/presidential_pardons.htm
for a copy of : JUSTICE UNDONE: CLEMENCY DECISIONS IN THE CLINTON WHITE HOUSE by the U.S. House Committee on Government
Reform, which includes comprehensive analysis and recently de-classified
information on pardons issued during the final hours of the Clinton
presidency.] March 27, 2002.
FIFA critics seek fresh audit An unusual meeting of FIFA’s executive
committee has been scheduled. The meeting will discuss the call for the
creation of an independent panel to investigate the body’s financial affairs.
Sepp Blatter who is the president of FIFA has resisted calls for independent
investigation of FIFA. The investigation is due to the concern about FIFA
losing money following the bankruptcy of ISL/ISMM, the Swiss marketing agency
that was FIFA’s main commercial partner. Mr. Blatter responded by
commissioning a report from KPMG, which is FIFA’s official auditor, but this
failed to placate his critics. Mr. Blatter´s opponents believe KPMG is too closely
linked with FIFA and they want an audit by an independent body. Moreover,
there have also been calls to broaden the investigation to cover bribery
allegations, which was levelled at Mr. Blatter´s supporters. It was claimed
that some of Mr. Blatter’s supporters paid bribes to African FIFA delegates
to ensure his election in 1998. The
FIFA presidential elections are in May, which is before the start of the
World Cup in Seoul and Korea.
Mr. Blatter is so far the only candidate but a challenge is likely from Issa
Hayatou, president of the Confederation of African Football. (Financial Times, March
2, 2002, summary by Sherldine Tomlinson).
POOR
MOUTHING AID: THE TRUTH IS, IT
WORKS: COMMENTARY. (Editorial Writer, Sebastian Mallaby,
Washington Post. Pessimistic people say that poverty is a shame, but is
‘unfixable’; that bigger aid programs will be wasted; that previous
pro-market policy reforms have failed; that not much progress has been seen
in education or health clinics even with aid; and that measurable success in
developing countries cannot be attributed to aid, due to lack of
evidence. However, though billions of
people remain poor, the numbers of poor has been steadily declining even
though the world’s population has risen by 1.6 billion persons since
1990. Returns from health aid include
millions of years of productive labor to regional economies and simple
nutritional alterations can boost children’s IQ levels by at least 10
percent. The global international
institutions, think tanks, and government representatives are meeting in Monterrey,
Mexico this month to
discuss development strategies, to push for doubling aid to guarantee the
access of essential health care, a sound environment, and primary education
to the poor. The Bush administration
will be urged to join this campaign on behalf of the United
States.
A recently released macroeconomic and health report stated a yearly,
global $66 billion investment until 2015 could generate 6 times as high
benefits up to 2020. In conclusion,
aid to developing countries, especially in light of the anti-terror war being
at center stage, is not philanthropy, it is strategic. (WorldBank DevNews, Mar.
4, 2002, summary by Marg Reynolds)
Corruption ´deters Caspian investors´. With proven oil reserved of between 17 and
33 billion barrels, comparable to the Us, the Caspian Sea region has not
developed as expected since the collapse of the USSR, mainly due to
corruption and an inadequate legal framework that are scaring investors off,
in spite of recent optimism about two pipeline projects in the region taking
oil and gas from Azerbaijan to Turkey. The main problem now is territorial
claims, as the world’s largest inland sea which used to be divided between
URSS and Iran is now claimed by Azerbaijan, Kazakhstan and Turkmenistan, as
well as Russia and Iran, and no agreements on how to share it have been made
yet, but the there is a strong environmental threat that could turn it into
an ecological disaster area. (BBC
News 26 Feb 2002, summary by Monica Voitovici).
Break through on tax havens A group of 30 leading industrialised
countries, The Organisation for Economic Co-Operations and Developing has
made a breakthrough in the controversial campaign that force tax havens to improve
levels of financial transparency. The
coalition has made an accord with Barbados,
which has led opposition to its decision to blacklist 35 financial centres. A
joint press release issued by the OECD and Barbados
said Barbados
would be excluded from a second blacklist of "unco-operative" tax
havens, which is due after the end of this month. It is said that Barbados
had decided to extend its existing bilateral agreements with large economy
countries, such as the United Kingdom
to cover all OECD members.
(Financial Times, February 1,
2002, summary by Sherldine Tomlinson).
UN FIRST MEETING ON THE ELABORATION OF THE UN
CONVENTION AGAINST CORRUPTION In its
first meeting at Vienna this week, the Ad Hoc Committee is considering the
first draft of a Convention against Corruption derived from a wide range of
proposals from Member States, which were discussed at the Informal
Preparatory Meeting of the committee held in Buenos Aires in December last
year. The Officer- in- charge in the UN Office for Drug Control and Crime
Prevention, Mr. Steinar B. Bjornsson has said that this is a historic process
in the fight against corruption intended to equip the member countries with a
comprehensive, broad, effective and functional instrument to strengthen and
create capacity to counter corruption. He indicated that the proposals show a
keen interest from all countries to participate actively so that the final
product of the convention reflects the multifaceted problems of corruption,
and is accepted universally. The Chairman of the Ad Hoc Committee H.E.
Ambassador Charry Samper has said that the task would be to bring about a
change in behavior and obtain a commitment to act against the corruption
world wide, which is increasing, and encroaching on agencies designed to
curtail it. He has said that the measures to reach a common formula worldwide
should include strengthening of controls, reform practices, international
co-operation, and establishing a culture of transparency and integrity. He
sought the support of the World Bank and the IMF, and urged all the financial
and banking institutions to step up their efforts to combat corruption.
Encouraging the Ad Hoc committee to move the convention forward he concluded
that whilst no country, developed or developing is immune to corruption,
effective ways of dealing with it could definitely be worked out. (22
January 2002, www.un.org, summary by Aruna Balakrishnan).
WHISTLEBLOWING: PEEP AND WEEP Reaching corporate targets has caused companies such as BP
and Xerox to not only not reward whistleblowers for expressing concern about
environmental and accounting issues, but in fact, to punish them by
persistent harassment, reprimands, or outright firing. Many firms massage numbers to reach
unrealistic targets, but since September 11th, whistleblowers on
security issues have failed to receive a response to known cases of
breaches. Legislation for protection
of whistleblowers who expose corporate or government shenanigans is gradually
being introduced in a number of countries, but is bogged down in
congressional committees in the U.S. The Public Interest Disclosure Act,
recently introduced in great Britain,
is cited as the most far-reaching whistleblower protection in the world;
however, few firms see whistleblower protection as being in their best
interests. A British bank, Abbey
National, is an exception in its treatment of whistleblowers and now gives
regular advice to its employees on how to blow the whistle – far more
constructive than the approach of BP or Xerox. (The Economist, Jan.
10, 2002, summary by Marg Reynolds).
Annan urges Third World to fight corruption. Secretary
General Kofi Annan urged developing countries on Monday to agree to fight
corruption so as to persuade rich states to raise an extra 50 billion dollars
in aid at a major UN conference this year. The week-long conference, which
opens in Monterrey, Mexico,
on March 18, "offers us the best chance we have had for many years to
unlock the financial resources that are so desperately needed for development,"
Annan said. He was speaking at the start of the fourth and final round of
preparatory talks for the conference, which runs until the end of next week.
Annan told delegates he had appointed South African Finance Minister Trevor
Manuel and the former managing director of the IMF, Michel Camdessus, as his
special envoys to help rally support for the conference. "The role of
the special envoys is to contact heads of state and high-level political
leaders to foster national commitments to concrete outcomes in Monterrey,"
the UN department of public information said. Annan identified six criteria
for success at Monterrey -- a
prelude to the main UN event of the year, the conference on sustainable
development to be held in Johannesburg
in from August 26 to September 4. "First, it must strengthen and sharpen
the consensus that now exists" that developing countries must do more to
attract capital, in particular foreign direct investment, he said.
"Agreement to conclude a comprehensive international convention against
corruption -- providing for example for the repatriation of illegally
transferred funds -- would also be a major step forward," he said.
Second, there must be a promise of new trade negotiations going beyond what
was achieved by the World Trade Organisation in Qatar
in November, he said. Rich countries must double official development aid to
100 billion dollars a year, he said, noting that this would still fall short
of their pledge to devote 0.7 percent of gross domestic product to aid.
Creditor nations must go beyond current agreements on the debt of low-income
and middle-income nations so as "to prevent the tragic experience of Argentina
from being repeated elsewhere", Annan said. Developing nations must be
given a bigger say in the management of the global economy, he went on, and Monterrey
"must agree on effective follow-up mechanisms to make sure that whatever
it decides is actually done." (Times of India,
January 16, 2002,
,summary by Sherldine Tomlinson).
NEW
MEASURES IN INTERNATIONAL CRICKET COUNCIL'S FIGHT AGAINST CORRUPTION. The International Cricket Council (ICC) is
going to appoint an anti-corruption
co-ordinator and five regional managers, as part of the battle against match fixing. The
initiative follows a report, which was
commissioned last year by the Anti-Corruption Unit of the Council.
According to Malcolm Speed, the ICC
chief executive, "whilst this position is not required by the Condon Report, we believe it is an important
one to provide focus and momentum for
our ongoing fight against corruption." "Both the anti-corruption co-ordinator and the
security managers will play vital roles
in making sure cricket is clean in future," added the ICC chief
executive. (Source: The Times, January
9, 2002, summary by Pavlidis George).
ENRON,
A BAD BUSINESS Enron Corp. has
denied any role in the mid-1997 arrests and beatings of dozens of peaceful
objectors to the $2.6 bn. Natural gas plant planned by its subsidiary, the
Dabhol Power Company. However,
initial investigations by the American Human Rights Watch group found
categorical evidence that Enron paid the government to police the protests
and officially suppress dissent.
Further investigation by Amnesty revealed harassment, arbitrary arrest,
preventative detention, arbitrary and brutal misuse of the law, and
ill-treatment of anti-Enron protest leaders.
Enron, together with Monsanto, Shell, McDonald’s Gap, Nike, and Exxon
have been complicit in causing outrage on three continents; however due to
Enron’s sheer scale, business methods, and manipulation of the international
political process. Tight links with
the politically powerful, including James Baker, former U.S. Secretary of
State; Robert Mosbacher, former Commerce Secretary; and Thomas Kelly,
Director of Operations for the Joint Chiefs of Staff during the Gulf War, has
ensured massive contract awards far in excess of the payroll costs for the
political support. Enron has left a
trail of U.S. government cash, public accusations, and angry communities in Britain,
Germany, Panama,
the Philippines,
Argentina, Mozambique,
and Bolivia. Even in the U.S.,
due to special concessions by then Governor Bush, Enron was allowed to
pollute without a permit and received immunity from prosecution after
violating pollution laws at its Texas
methanol plant. Everyone is better
off without the giant rampaging bully.
(The Guardian, Nov. 30, 2001,
summary by Marg Reynolds).
TERRORISM,
ORGANISED CRIME, MONEY LAUNDERING. It goes without saying that there is a
strong connection between terrorism and organised crime. Estimates of the
total money laundered around the world range from $500 billion to $1.5
trillion, most of it from the illegal drugs trafficking. Secretary-general of
INTERPOL, Ronald Noble said: "If corrupt public servants provide false
identity documents, terrorists will move more freely throughout the world,
and all of us will remain threatened." The OECD-based Financial Action
Task Force on Money Laundering is holding a special meeting in Washington
to consider measures to stop the flow of these terrorist funds. There are 19
states that are identified by FATF as lax on money laundering, among them Egypt,
Israel, Lebanon,
Indonesia and
Russia; Afghanistan,
Iran and Iraq
have no regulations against money laundering; arrangements are inadequate in Saudi
Arabia and Pakistan.
According to the Global Corruption Report, published by Transparency
International, " laundering only needs to be good enough to defeat the
capacity of financial investigation skills and the burden of proof in any of
the jurisdictions along its economic path." (Source: TI, International
Herald Tribune, October 30, 2001,
summary by Pavlidis George).
THE
ANTI-CORRUPTION MOVEMENT GROWS IN COURAGE. It is well known that fighting
corruption is dangerous. Corrupt public figures do not hesitate to
assassinate journalists, public prosecutors and civil society activists who
try to expose corruption. At the recent International Anti-Corruption
Conference (IACC) in Prague,
attended by 1,400 participants from dozens of countries, Transparency
International paid tribute to four victims: Carlos Alberto Cardoso (Mozambique),
Luis Carlos Galan (Colombia),
Georgy Gongadze (Ukraine)
and Norbert Zongo (Burkina Faso).
The IACC noted, however, that progress has been made in the international
anti-corruption movement. TI was created only eight years ago (1993) and now
has national chapters in 80 countries; today, a rapidly growing set of
coalitions is being organized at national, regional and global levels to
force change. It is also impressive that leaders from official multilateral
organizations (the OECD, the World Bank, the European Bank for Reconstruction
and Development etc) should come together with top executives from
multinational corporations, journalists, judges, police and security agency
leaders and civil-society activists to work on new initiatives. (Source: TI,
Earth Times, October 31, 2001,
summary by Pavlidis George).
LEGISLATIVE
ACTIVISM TRIGGERED BY CURRENT TERRORIST THREATS LACK THE COORDINATION TO BE
EFFECTIVE – EDITORIAL (The writer is Chairman of the OECD’s working group on
bribery in international business transactions and a former member of the
FATF). The use of the financial
system by organized criminals for money management in hiding money in
offshore companies has been aided by the uncoordinated, patchy, incomplete,
and inadequate measures by the governments of countries such as Germany,
the United States,
and the United Kingdom. Ten years ago, the FATF advocated creation
of a central notification body to report suspected money laundering cases,
together with measures of identification of both foreign and domestic front
companies of terrorists. However,
bureaucratic controls will easily be evaded by the criminals and terrorists
and the financial institutions should be responsible for identification and
profiling of not only their individual clients and corporate vehicles, but
also the beneficiaries behind the customer.
All countries should be able to search, seize, and forfeit property
belonging to a terrorist organization and those assisting in hiding finances
should be charged with the criminal offense.
It should be mandatory for all countries to notify the central body
authorities of suspect funds, including countries such as Iran
and Russia,
who have expressed anti-terrorism solidarity but are not currently
participants in anti-laundering codes.
(FT, OCT. 24, 2001,
summary by Marg Reynolds)
NEW
U.S. TASK FORCE TO INVESTIGATE ILLICIT CHARITIES AND CORRUPT FINANCIAL
INSTITUTIONS A new team, called Operation
Green Quest and composed of prosecutors and investigators from the U.S.
Treasury Dept., Justice Dept., the Internal Revenue Service, the Customs
Service, and the Federal Bureau of Investigation, will target charities,
non-governmental organizations, and underground remittance systems to disrupt
terrorist financial networks such as al-Qaeda. The task force will track down and dismantle present and future
sources of financing by targeting hawalas (undocumented asset transfers),
illicit charities, corrupt financial institutions, counterfeiting, credit
card fraud, drug trafficking, and cash smuggling. (FT, Oct. 26, 2001,
summary by Marg Reynolds)
TRYING
A NEW APPROACH. The 10th Annual Anti-Corruption Conference was held from 7 to
11 October in Prague (Czech
Republic). A wide range of
subjects was discussed, including fighting corruption in the judicial system.
Keith E. Henderson, the creator of USAID's first official anti-corruption
policy, was interviewed about the roots of corruption in post-Soviet
judiciaries. Keith E. Henderson is currently working on a small
judicial-reform project in Bulgaria,
called the Black Sea Legal Community. Keith E. Henderson considers an
independent judiciary to be prerequisite for a corruption-free society.
"In the judiciary, economic interests agree to pay officials to appoint
certain people to judgeships." "The person appointed may get a call
from time to time to make a decision a certain way. By then the government
official may no longer be there. That means that the economic interest again
has to have someone else appointed to a position within that agency. There is
a huge turnover of officials, particularly in transition times...Many
officials want to be appointed to as many positions as possible, because
every time they get an appointment they get another bit of the action. So
there is a constant placement of corrupt officials. That's why this corrupt
network grows. That's just one form in which this corruption occurs."
According to Keith E. Henderson the fundamental problem is systemic
corruption, thus, the solution is to work with the state in a "very
targeted, strategic way." Accordingly, donors should give more emphasis
to the issues of judicial independence, rather than to judicial
administration and actual management. (Source: TI, Transitions Online, October
18, 2001, summary by Pavlidis George).
SOME
CORRUPTION BATTLE IS BEARING
FRUIT. The Global Corruption Report 2001 is the first
such survey of its kind. According to Transparency International,
which
prepared this study, " this new report contains rays of hope.
Increasing
numbers of governments and business organizations are starting, albeit
modestly, to take positive steps to curb bribery. In particular, citizens'
action is beginning to call politicians to account in all corners
of
the world." The survey provides an exhaustive list of examples of
corruption
around the world as well as how they were uncovered. (Source: TI,
Business
Day, October 16, 2001,
summary by Pavlidis George).
MIXED
RESULTS FOR GLOBAL ANTI-CORRUPTION DRIVE.
The results of anti-corruption drives are mixed,
according to the watchdog charity Transparency International (TI). TI
released its first Global Corruption Report, according to which the
problem had become a big political issue in many
countries. "On balance, the international community's efforts to fight
corruption
have had a positive impact," the report said. Peter Eigen, chairman
of Transparency International, said that the September 11 attacks
in
the US had
also made clear how high the stakes were in areas such as money
laundering. "Without corruption, the terror attacks would not have
been
possible," he said. "To fight corruption means to fight
terrorism." The report also warned some countries in Africa
that rushes into privatization and liberalization may increase the
potential for corruption. (Source: TI, Financial
Times, October 16, 2001,
summary by Pavlidis George).
TRADITIONAL
PAPERLESS MONEY TRANSFERS COULD BENEFIT BIN LADEN NETWORK. The traditional
system of import-export offices, or trading marts, the so-called "hawala,"
is believed to have been used by Osama bin Laden's terrorist network.
"Hawala" (="reference" in Urdu-language). is a low-tech method of money
transfers, which is widely used in south Asia, the Middle
East and beyond. The system is simple: a
customer walks into an office and tells the broker
where to send the cash. Soon, the faraway recipient goes to an affiliated
broker and collects the same amount of money, minus costs and perhaps
a small fee. Sometimes the money is even home-delivered. During this
transaction
the actual cash hasn't gone anywhere. The system is based on the trust
among the hawala brokers, who are often blood relatives. Although
almost
every country outlaws hawala, financial experts believe many of the
transactions
are innocent, involving customers who simply can't afford banking
fees or wish to avoid long delays. Nevertheless, the system's relative
anonymity and lack of any legal record keeping makes it useful to
drug
traffickers, weapons brokers, tax evaders, corrupt officials - or
operatives
of a shadowy network like that of bin Laden. (Source: The Independent,
October 17, 2001,
summary by Pavlidis George).
THE WORLD BANK AND
INVESTIGATIVE JOURNALISM COURSE
STRENGTHENS MEDIA IN LATIN AMERICA There is no more effective check on
corrupt officials, bribe takers, embezzlers and those who waste public funds
than a hard-nosed investigative journalist. In many parts of Latin
America, unfortunately, they are not abundant. No more. The World
Bank Institute is tapping its own knowledge, and that of media experts across
Latin America to train 200 journalists in nine
countries in how to dig up stories that make the corrupt tremble. (Source: World Bank Institute, September
26, 2001, originally published in “Today”, the daily e-zine of
World Bank Staff Summary by: Shatarupa Chaki).
JOURNALIST
KILLINGS, SELF-CENSORSHIP CONCERN IAPA. The Miami-based Inter American
Press Association (IAPA) has warned that Latin America's
media-freedom
problems have been heightened in recent months by the murders of
nine journalists and the emergence of a "culture of
self-censorship." In a recent report IAPA declared that
its "greatest concern" was the killing of seven
journalists in Colombia,
one journalist in Mexico
and another in Costa Rica
since March. IAPA also expressed its concern about violence in Haiti,
Cuba
and the Dominican Republic, about "innumerable lawsuits being filed
against
individual journalists and the news media, particularly in Costa Rica
and Brazil" and about "anti-press legislation and bills" in
Paraguay, Chile, Nicaragua and Panama. According to the President of
IAPA, Danilo Arbilla, the climate of
self-censorship results from violence in rural areas of
the countries, like Colombia, Mexico and Brazil, in which journalists
were
least protected and feared reprisals for writing of corruption or drug
trafficking.
The organization urged for strict compliance with the principles
of the IAPA-sponsored Declaration of Chapultepec. (Source: Freedom
Forum Online, July 31, 2001,
summary by Pavlidis George)
CENTRAL
ASIA: BATTLE
LINES FORMING IN STRUGGLE OVER CORRUPTION IN CASPIAN BASIN Endemic and pervasive corruption in the
countries of the former Soviet Union located in the Caucasus
and Central Asia is the real danger and serious
challenge to investors and to Transparency International’s loud calls for
reform. New systems of government,
pledges by the International Monetary Fund, reforms imposed as a precondition
to World Bank loans, and cultivating enlightened images on transparency and
worker rights is estimated to reduce a shadow economy of up to half certain
nations’ GDP. Bribes and side
payments in the Kazakhstan
oil industry or the Turkmenistan
caviar trade, together with nationalizing key industries may well cause
dilution of foreign investment. Kazakhstan,
Turkmenistan,
Armenia, and
their neighbors depend upon foreign investment for large portions of their
budgets. (EurasiaNet, July 20,
2001, summary by Marg Reynolds).
HYPOCRISY
SURROUNDS BRIBERY ISSUE – EDITORIAL
We are pure, live by the rule of law, thoroughly deservedly rich,
neat, orderly, and legal. However, THEY
are corrupt, live by connections or cronyism, thoroughly deservedly poor,
disorganized, anarchic, and secretive.
Companies in signatory nations to the OECD Anti-Bribery Convention
account for almost three-quarters of global trade and an estimated $37
billion was affected by bribery of foreign officials – the bribes were then
returned to rest in secret accounts of First World
nations. Therefore, accessories to
the crime are the First World nations. Fine Maema, Lesotho Attorney-General, has
brought a first or extremely rare suit against European and Canadian
engineering firms for bribing officials to award contracts for a huge $1.4
billion dam construction project.
Those who pay the bribes must be held equally responsible as those who
are taking the bribes. The
extraordinary courage of Lesotho
eclipses that of the World Bank, who suggested taking no action for fear of
construction project cancellation.
(TI, The Toronto Star, July
19, 2001, summary by Marg Reynolds).
TRANSPARENCY
INTERNATIONAL: INDEX POINTS TO
WORLDWIDE CORRUPTION CRISIS Peter
Eigen, Transparency International Chairman, stated perceived corruption
amongst public officials and politicians is believed by investors, risk
analysts, and the public as the most widespread and levels are as high as
ever in both developing and developed countries. TI also noted the vicious circle of poverty and corruption,
especially in education and health care.
Many developed countries lack the integrity they preach to developing
countries and Eign was alarmed at the campaign contributions scandal in
Germany; the gifts received by former French Foreign Minister, Roland Dumas
from Elf Aquitaine; and Washington’s re-thinking their participation in an
OECD working group to abolish harmful tax practices, which would cause a
serious setback in the corruption battle.
(AOL News (Reuters), June 27,
2001, summary by Marg Reynolds
CRUNCH
TIME FOR WAR ON ‘HOT MONEY’ HAVENS
The ‘name and shame’ campaign exercised last year which was launched
by the Financial Action Task Force, a forum initiated by the Group of Seven
economic powers and joined by 31 states, has already prompted encouraging
changes or pledges from major offshore centers and others blacklisted. Lack of reform may cause counter-measures
such as imposed sanctions against renegade financial centers and FATF
officials are also scrutinizing a swathe of locations not including in the
first warning list. http://finance.individual.com (Office.com (Reuters), June
22, 2001, summary by Marg Reynolds).
WORLD
BANK: GLOBAL WAR ON CORRUPTION –
PICKING UP MOMENTUM James
Wolfensohn, World Bank President, has made war on corruption an inalienable
part of the Bank’s campaign for eradication of poverty. The Bank’s efforts include surveys of
state of affairs by observers in various countries; participation in the
bi-annual International Anti-Corruption Conference (IACC) and the Global
Forum on Fighting Corruption and Safeguarding Integrity; and other valuable
insights on issues such as Integrity and Governance, Law Enforcement,
Customs, Corruption, Transition and Development, and Government and Business
Sectors. Information on these topics
may be accessed at: http://usinfo.state/gov/topical/econ/bribes/gf2workshops.htm The anti-corruption movement must be both
compliance-based and values-based, free of political manipulation and
control, impartial, and required to report publicly on results. It was noted that India
did not send a representative to the Conference. (Business Line India,
June 21, 2001, summary by
Marg Reynolds).
HISTORY
SHOWS MULTIPLE CURRENCIES BREED CORRUPTION
Multiple currency regimes have historically distorted economic
activity through fraud and incentives to under-invoice imports and
over-invoice exports. Billions of
dollars have been lost to countries such as Argentina,
Venezuela, Brazil,
Italy, Belgium,
Egypt, and France
during their unsuccessful experimentation with multiple exchange rates;
dollars which were transferred to offshore accounts. Future loan agreements from the IMF will
ban this practice. (Excite
(Reuters), June 20, 2001,
summary by Marg Reynolds).
UNITED
NATIONS: AUDIT CHARGES CRIME PREVENTION
OFFICE WITH FRAUD AND MISMANAGEMENT
Dileep Nair, Under-Secretary of Internal Oversight Services of the
U.N. Drug Control and Crime Prevention offices stated a report has been
forwarded to Secretary-General Kofi Annan’s office which outlines faults in
personnel policy, waste, corruption, and inefficiency. Nair further believes that overcentralized
and heavily personalized decision making within the agency has led to
allegations of overspending against Pino Arlacchi, Director of the Drug
Control Program, for a $100,000 Mercedes and other luxuries. (DJ Newswires, June
12, 2001, summary by Marg Reynolds)..
GLOBAL FORUM: TREATY TO BE DRAFTED TO CONTROL
CORRUPTION. A U.N. Treaty will be drafted by Ministers of more than 100
countries to control corruption, which Kofi Annan, U.N. General Secretary,
believes will make it easier to detect corruption and locate and punish
offenders. However, concrete action
at a national level is needed, including anti-corruption programs, an
independent judiciary, and free media.
Peter Eigen, TI Chairman, expressed concern that the euro currency
launch scheduled for next year, together with a possible temporary lift of
anti-money laundering laws in France
could trigger the largest money laundering exercise in history. Robert McNamara, former World Bank
President, believes the 1999 OECD measures have lacked progress and
enforcement, and is concerned for the U.N. Treaty’s implementation. Seoul, South
Korea will host the next forum in 2003. (UN Wire, May
31, 2001, summary by Marg Reynolds).
GLOBAL FORUM II – FIGHTING
GLOBAL CORRUPTION – BUSINESS RISK MANAGEMENT. Cynthia Schneider, U.S.
Ambassador to the Netherlands,
stated at the Second Global Forum on Fighting Corruption and Safeguarding
Integrity held in the Hague that
the administration of President George Bush is committed to the international
corruption fight. Colin Powell,
Secretary of State, announced the release of a publication entitled:
‘Fighting Global Corruption: Business
Risk Management’. The full text may
be located at: http://www.state.gov . He believes success depends upon impartial
democratic institutions, open elections, unfettered access to information,
leadership by the private sector, and active participation by citizens. (State Department Media Note, May
29, 2001, summary by Marg Reynolds).
GLOBAL FORUM II: GOVERNMENTS TOLD TO GET TOUGH ON
CORRUPTION Jeremy Pope, TI-UK
Director, stated progress has been made in raising international awareness of
corruption, however, government cooperation on returning stolen assets by
politicians is failing due to non-facilitation of legal frameworks. Daniel Kaufman, World Bank anti-corruption
expert, believes more attention and effective action should be paid to high
level corruption in government structures and the judiciary. Michel van Hulten, corruption expert and
Dutch MP, disagrees with both TI and the World Bank and believes it is not
possible to measure corruption as the corrupt do not record their transactions,
and tax and anti-fraud inspectors need to find ways of gathering information
on illegal practices. (World Bank
DevNews, May 29, 2001,
summary by Marg Reynolds).
INNOVATIVE
CORRUPTION – ILLEGAL SALE OF HUMAN ORGANS (Extract of an article by David
Finkel) The sale of human organs is against the law in every country (with
the exception of Iran) and the world’s medical associations and political and
religious leaders have stated the practice is morally and ethically
irresponsible, inhumane and unacceptable, and violates the dignity of the
human person. Donated organs –
hearts, livers, lungs, and kidneys – are, however, legal. An organ-trafficking market, composed of
buyers and sellers, is illegal, complex, well organized, often cross
continental, and is conducted with only a scant nod toward secrecy in Israel,
India, Turkey,
China, Russia,
and Iraq. (NY Times Magazine, May
27, 2001, summary by Marg Reynolds).
INTERNET
MAY BE NEW MONEY LAUNDERING BATTLEFIELD. The estimated $1 trillion per year
that is laundered in an increasingly borderless world is being aided by
criminal development of new and more sophisticated methods for moving money,
even as countries develop counter measures.
Exploiting vulnerabilities in the financial system is an area of
rising concern as Internet banking transactions are quick, easy, and
anonymous. Inadequate customer
identification and account monitoring procedures allow money laundering to
affect all levels of society and gives wicked legitimacy to ill-gotten wealth. The underworld is expanded and ‘clean’
money spawns more social and economic woes. (DJ Newswires (AP), May
22, 2001, summary by Marg Reynolds).
NO
TRADE BENEFITS WITHOUT REFORMS … INCLUDING FIGHT AGAINST CORRUPTION SAYS
WOLFENSOHN During the Third UN
Conference for Least Developed Countries (LDCs) in Brussels, James
Wolfensohn, World Bank President, stated implementation of basic vital
political and infrastructure reforms in developing countries, which include
good governance, functioning legal and judicial systems, education and health
care initiatives, together with the fight against corruption would boost
LDC’s chances of being competitive and enjoying the benefits of
globalization. He urged national
leaders to address the HIV/AIDS problem and to be involved in international
efforts in prevention, education, cultural exchange in concert with reducing
the cost of retrovirals. Also at the
Conference, Olusegun Obasanjo, Nigerian President, believes political
instability can be avoided through governmental transparency and that
corruption is anti-development. Kofu
Annan, UN Secretary-General, believes the support of developed countries in
LDCs efforts to join the global market place as producers and consumers will
give them a chance in their continuous struggle against hunger, malnutrition,
polluted drinking water, infectious disease, ignorance, oppression, and
violent conflict. (WB DevNews, May
15, 2001, summary by Marg Reynolds).
CORRUPTION
COSTS $80 BILLION YEARLY – (BY ELINOR GARELY, CONTRIBUTING EDITOR
E-TURBO-NEWS) Corruption – a major
international scourge flourishing in regimes that limit power to an
unaccountable few – has been estimated by the World Bank to cost $80 billion
annually, not including embezzled development funds and small scale
corruption. In many cases, specific
information on the unrecorded, non-rule based, or informal economy of both
national and cross-border trade involves private profit through misuse of
public power by simply too powerful interests. Corruption is a disincentive for direct foreign investment;
thrives in opacity; creates poverty and therefore an even larger underground
economy; creates distrust of government, citizens, and investors; threatens
aid programs; subverts rule of the law and work ethics; and violates
opportunities for safe buildings, bridges, drinking water, air, and
non-violent international co-existence.
Prosperity and freedom may be obtained in countries that value
transparency and openness. (E-Turbo
News, May 14, 2001,
summary by Marg Reynolds).
JOURNALISM
AND POWER: WHY OWNERSHIP MATTERS
(Article by Frank Vogl, Vice President of Transparency International) The media’s role in strengthening
democracy by exposing corruption depends on non-media developments such as
press freedom laws, fair and independent judges, courageous public
prosecutors, and by serving as an effective public watchdog. Many powerful media owners, both private
and state-controlled, have multiple business interests and political party
affiliations and govern the editors.
In many developing and transition countries, investigating journalists
are prevented from tough and independent coverage by minimal newsroom
budgets, and are therefore easy prey for bribery. However, there are still many excellent developing world media
owners who struggle to support brilliant editors and courageous
reporters. Donor agencies are
implored to fund independent judicial systems, education in research and analyses
to secure meaningful media antitrust regulations and secure transparency in
the non-media business dealings of media owners. (Media Channel, May
9, 2001, summary by Marg Reynolds).
Transparency
International has released the 2001
ranking of 91 countries according to corruption perception index. Peter
Eigen, the president states: “The OECD Anti-Bribery Convention was a landmark
in the fight against corruption in international business, but countries such
as the United Kingdom
have still not even tabled the legislation to implement the Convention.” (June
27, 2001, visit http://www.transparency.org
).
Financial
Action Task Force (FATF) against Money Laundering, an international body of
major industrial countries has published a new report on June
22, 2001. It has updated
the original blacklist of countries and can discourage multinationals from
doing business in these countries and require banks to collect detailed
information regarding most transactions.
1]Removed
from blacklist are Bahamas,
Caymen Islands,
Liechtensterin and Panama.
2]Added
to blacklist are: Egypt,
Guatemala, Hungary,
Indonesia,
Mynmar and Nigeria.
3]Still
on blacklist and facing countermeasures: Nauru,
Philippines
and Russia.
4]Still
on blacklist but making progress: Cooks Islands,
Dominica, Israel,
Lebanon, Marshall
Islands, Niue, St;
Kitts and Nevis and St. Vincent
and Grenadines.
(Wall
St. J. June 22, 2001, p.
A3)
WORLD
BANK: GOVERNANCE MOST IMPORTANT IN
REDUCING POVERTY SAYS WOLFENSOHN
James Wolfensohn, President, stated that public sector corruption is
now viewed as a social issue by the Bank, rather than a political issue as in
the past. The Bank’s new approaches
include assisting in individual country poverty reduction strategies, public
spending management systems, transparency, access to and cooperation with
developed markets, and technical assistance to post-conflict countries. Hotlines have been provided for citizen
complaints of corruption and ethics violations and the Bank employees are
provided with ethics training.
(Washington File, Apr 27, 2001,
summary by Marg Reynolds).
WORLD: $131 BILLION IN FOREIGN DIRECT INVESTMENT
DETERRED DUE TO OPACITY. A recent study by Pricewaterhouse Coopers stated
capital flight from opaque countries to those with greater transparency
indicates the link between transparency policy changes and economic growth
and investment. Singapore,
the United States,
Chile, and
the United Kingdom
were established as benchmarks and corruption, legal, regulatory, accounting,
and economic opacity of individual countries was compared to the transparency
of the benchmark countries. The Index
will be further refined and developed by the firm and may be used as an
analytical tool for policy debates within the country and in global
forums. (Yahoo News, Apr
24, 2001, summary by Marg Reynolds).
UNITED
NATIONS: AUDIT REPORT RAISES CONCERNS
ABOUT DRUG PROGRAM Investigations
are underway into a series of mismanagement and corruption allegations at the
United Nations Drug Control Program in response to one of two U.N. Reports;
the second investigation to be released shortly. The audit report focused on recruitment, commitment of
resources, and appropriateness of expenditures. Financial status of individual projects was not readily
available and when located, differed widely by the three concerned UNDCP
sections. A new financial management
system request from auditors has been ignored for six years and Kofi Annan,
U.N. Secretary-General, will make a decision as to the recommendation of Pino
Arlacchi, Executive Director, for a second five-year term. (FT, Apr
26, 2001, summary by Marg Reynolds).
IMF: EXTRACTS FROM INTERNATIONAL MONETARY AND
FINANCIAL COMMITTEE COMMUNIQUE 11. The Committee would like to initiate a
framework for development plans with other international institutions, member
governments, and the private sector to locate high quality ventures with
sustainable market justification.
12. The Committee plans to initiate
measures to further its knowledge of individual country requirements of early
warning capabilities and strengthen crisis prevention through private sector
involvement. 13. The Committee has progressed its previous
initiatives in crisis prevention and financial sector surveillance through
assessing member monitoring systems.
14. The Committee hearily
endorses anti-money laundering legislation and financially back same. 15.
The Committee plans to continue its efforts to assist in strengthening
country reforms and will review conditionality on an ongoing basis. 16.
The Committee plans to review remedial measures taken against poor
governance and corruption by surveillance initiatives. (Washington File, Apr
29, 2001, summary by Marg Reynolds).
R.
PRODI: "CORRUPTION IS AN INSULT TO THE POOR." In an article for the
International Herald Tribune, Mr. Romano Prodi, the president of the
Commission of the European Union, expressed his concern that "in the world
today millions of people continue to live in conditions that most Westerners
can barely imagine." This week the European Union is hosting a UN
conference on the problems of the so-called least developed countries (LDCs).
We remind to you that the European Union recently decided to grant duty-free
and quota-free access to all products from the LDCs with the exception of
arms. In his article Mr. Prodi urged other industrialized countries to follow
suit. On the other hand the President of the European Commission said that no
amount of money from the rich West would help unless the anti-poverty
strategies were combined with "a drive for democracy, human rights and
the supremacy of the rule of law". "Corruption is an insult to the
poor, and we should all put the fight against corruption at the core of our
policies," added Mr. Prodi. (Source: International Herald Tribune, May
16, 2001, summary by Pavlidis George).
CORRUPTION
- THE UNIVERSAL PHENOMENON. In Arab countries it is called baksheesh, hongbao
in China, matabiche in central Africa, propina in Latin America, pots de vin
in France, in other parts of the world it is called bribery. According to the
World Bank, corruption amounts to $80 billion a year. This amount does not
include embezzled development funds and small-scale corruption found in
developing countries. Reno (2000)
estimates that in Benin,
ninety percent of its cross-border trade flowed through illegal channels
(Allen, Baxter, Radu & Sommerville, 1989). An estimated sixty- percent of
Nigeria's
trade with its neighbors in 1998 was unrecorded (Nigerian Loses, 1999).
Quantifying the economic loss due to corruption is difficult, however,
because it is illegal and hidden (Wei, 2000). Tanzi (1994) defines corruption
as "the misuse of public power for private profit. According to him,
corruption represents "non-compliance with the 'arm's length' principle,
under which no personal or family relationship should play any role in
economic decision-making." Bribery, an central element of the corruption
process, is explained by Daniel Bertosa, the Public Prosecutor of Geneva, as
a system that "consists of promising or offering an advantage to a
public agent, civil servant, minister or manager of a public company, so they
betray their responsibility to the public authority they represent"
(Abramovici, 2000). Transparency International (1995) examines the connection
between poverty and corruption. "If poverty were the cause of
corruption, then it would be hard to explain why rich, wealthy countries are
beset by scandals." Perhaps, poverty does not cause corruption; rather,
poverty is the consequence of corruption. (Source: E-Turbo News, May
14, 2001, summary by Pavlidis George).
New
York, UN CRIME CONTROL BODY TO FOCUS ON CORRUPTION.
The progress in fighting corruption will be the
central focus of a United Nations international crime control body that
began its current session in Vienna
today.
The UN Commission on Crime Prevention and Criminal Justice, established
in 1992, is expected to set the stage for negotiating a legally binding
international treaty on corruption. Additionally, the Commission will
consider ways to promote the early entry into force of the recently
adopted
UN Convention against Transnational Organized crime and its three
protocols
dealing with trafficking in human beings, smuggling of migrants and
illicit manufacturing and trade in firearms. (Source: United Nations,
May 9, 2001, summary by
Pavlidis George).
SEOUL
MAYOR WINS INTERNATIONAL ANTI-CORRUPTION ACCLAIM. IEEP has honored Seoul
mayor, Goh Kun, for his work in routing corruption from his city’s
administration in 1999. Transparency International awarded him the “2001
Global Integrity Medal.” New York
University Wagner school of public service honored him on May
9, 2001. The meeting was
attended by President D. P. Gregg of Korea Society, Korean diplomats and
Prof. H. D. Vinod, among others. The
Mayor explained the latest developments in using Information Technology (IT)
to fight corruption throughout Korea beyond the city, how the system will be
integrated with the actual working of the city in October 2001, how the cost
of the whole system was only about $300,000. Integrity Pact (IP) is an
agreement between companies submitting bids signing the oath to not engage in
illegal price-fixing or offer bribes, gifts and entertainment and to accept
punishment if they violate the IP. To
enforce the IP there is an IP Ombundsmen as citizen representatives to
monitor if bribes or entertainment are offered. An anticorruption index (ACI) to assess areas most susceptible
to corruption. The idea is to
encourage the competition for integrity among various departments. The
corruption report card is sent to the citizen every month by the mayor’s
office many report irregularities and recommendations and as a result two
officials were dismissed, one suspended, one reprimanded, and several were
admonished or underwent corrective training courses. There are money rewards
to citizen for making reports and suggestions.
WORLD
BANK: EIGHT FIRMS, TWO INDIVIDUALS
DEBARRED FOR CORRUPTION IN CONTRACTS
Claes Fjellner of Sweden and Jonas Gyllensvaan of the United States,
together with eight Swedish consulting firms, have been debarred by the World
Bank for corruption in the award of contracts. Included in the firms are:
Nordic Trust Stiftelsen, Swedcon, O-Group, Sadin International
Operations, and Swaan Consulting.
Five European governments due to corruption allegations have frozen
consultant trust funds administered by the bank and three bank employees have
been sacked. (World Bank DevNews, Apr
5, 2001, summary by Marg Reynolds).
WORLD: TAX HAVENS STILL THRIVE DESPITE
ATTACKS The EOCD recently estimated
that over $200 billion has been placed in about 35 tax havens worldwide. Most havens have extremely strict bank
secrecy laws and do not disclose information to foreign tax authorities
except where crimes are suspected.
Rose Wong, of the private bank Courts in Hong Kong,
stated: ‘It’s not against the law to set up something that avoids taxes. It is against the law to evade taxes, but
setting up an entity to get around the tax structure, finding a loophole,
there'’ nothing wrong with that.’
(Far East Economic Review, Apr
5, 2001, summary by Marg Reynolds).
TRANSPARENCY
INTERNATIONAL: CAMPAIGN FOR GREATER
TRANSPARENCY AND ACCOUNTABILITY IN LOCAL GOVERNMENT Peter Eigen, Transparency International (TI) Chairman and
Anna Tabaijuka, United Nations Center for Human Settlements (Habitat) have
announced the launch of a Global Campaign for Participatory Urban Governance
to campaign for government transparency and accountability with attention
focused on the needs of the urban poor.
The good governance norms of the campaign are sustainability,
decentralization, equity, efficiency, transparency, accountability, civic
engagement, and safety. Several
flagship projects are planned and the campaign will first be launched on
April 10 in Nigeria. (TI Press Release, Apr
5, 2001, summary by Marg Reynolds).
ACCOUNTANTS
CALLED TO FIGHT CORRUPTION The
International Development Committee of the House of Commons stated that
spreading an active and vocal path of best practice methods and raising
standards was a key role of auditors.
The committee cited areas in which revisions were required are: an uncoordinated approach to money
laundering, government response time to tracing and freezing the proceeds of
corruption, extra resources to tackle these issues, and reform in World Bank
accounting regimes. Roger Davis,
senior audit partner at Price Waterhouse Coopers stated it was not an
auditor’s role to make a moral judgement on what is acceptable. (AccountancyAge, Apr
4, 2001, summary by Marg Reynolds).
WORLD
BANK: REPORT URGES DONORS TO REWARD
‘GOOD GOVERNANCE’ David Dollar,
World Bank researcher, has stated further research is required into reasons
why aid has supported poverty reduction in some areas where political leaders
reforms and implement change, increase public confidence and attract greater
private investment; and retarded it in other areas which are not committed to
reform. A report was released
entitled, ‘Aid and Reform in Africa: Lessons from Ten Case Studies’ which
investigates and draws conclusions as to why only two of the ten countries
studied – Ghana and Uganda – adopted
and maintained a sound reform policy. (WB DevNews, Mar.
28, 2001, summary by Marg Reynolds).
FIRST
FINANCIAL RECORDS REFERENCE MODEL AVAILABLE The International Records Management Trust, together with the
World Bank and the U.K. Department for International Development is pleased
to make available to the public a publication entitled, ‘Principles and
Practices in Managing Financial Records:
A Reference Model and Assessment Tool’. Research has found greater public sector financial
accountability provides a safeguard against corruption and fraud, and the
publication distills good practice strategies in developing country
contexts. (IRMT Press Release, Mar.
28, 2001, summary by Marg Reynolds).
LENDING
TO BE CUT BACK FOR COUNTRIES THAT DON’T CONTROL CORRUPTION The World Bank, together with its
sibling lender, the International Monetary Fund, have this week announced
changes in lending practices to governments that have been dogged by
corruption charges. They will reduce
aid to governments who refuse to cut government spending, reduce subsidies to
industry, or open their economies and will increase aid to those countries
committed to policy reforms that spur private investment and reduce
poverty. (Bloomberg News, Mar
27, 2001, summary by Marg Reynolds).
INCREASING
KIDNAPPINGS CREATE GLOBAL BUSINESS, ‘MADE EASIER BECAUSE OF CORRUPTION’ Clark Staten, director of Emergency
Response and Research Institute of Chicago, stated kidnapping for ransom by
extremist groups to finance their activities has become big business. Although the U.S.
government discourages ransom payments as it encourages terrorism, between 70
and 80 percent of kidnap cases end in such a payment. International companies such as oil, gas,
and mining are most at risk and some demands are up to $100 million, with the
average ransom being $250,000.
(Yahoo News (AP), Mar. 25,
2001, summary by Marg Reynolds).
RECOVERING
THE DICTATORS’ LOOTED WEALTH – OPINION (Written by Edwin Truman, senior
fellow the Institute for International Economics and former assistant
secretary of the U.S. Treasury for International Affairs). An internationally coordinated strategy
involving local authorities, private organizations, international financial
institutions and destination jurisdictions is required to recover funds
looted by kleptocrats including Joseph Estrada, Slobodan Milosevic, Ferdinand
Marcos, Mobutu Sese Seko, Francois ‘Papa Doc’ Duvalier, Suharto and Sani
Abacha. Establishment of an
international commission with dedicated systems, procedures and laws would
deter future kleptocratic rulers and help citizens of these countries recover
their looted wealth. (FT, Mar. 20,
2001, summary by Marg Reynolds).
WORLD
BANK ADVISES AID DONORS TO REWARD GOOD GOVERNANCE. According to the
latest
thinking from the World Bank, rich donors, instead of trying to buy
reform
with aid, should reward developing countries that follow good policies.
This is a conclusion included in a report of the World Bank's most
recent
assessment of aid and poverty. The report compares the experiences of
10
African countries and reaches the conclusion that attempts to buy reform
over
the past years have failed. That is why, according to the report,
international
aid donors should only lend on countries that have displayed a good
record of macroeconomic and governance policy, such as Uganda
and Ghana.
Finally, the report repeats the familiar call for rich countries to
increase
the amount given in aid to the poorest nations. According to World
Bank
officials it is ironic that aid as a proportion of national income has
been
reduced just as an international consensus on the effectiveness of aid
has
been developed. (Source: Financial Times, March
27, 2001, summary by Pavlidis George).
"SLEAZE'S
SLIMY INVENTIVENESS". In an
article in the Guardian, the controversial author Mr. Salman Rusdie examines,
among other things, the phenomenon of corruption. According to Mr. Rusdie, recent corruption scandals in France,
Peru, India,
the United States etc are expressions of a general trend. "Yes, sleaze has resurfaced, grinning
its slobbering grin, to remind us that it never really went away - that it
remains the great occult force that bends and shapes the age, its existence
perennially denied, its empire expanding daily. You can almost admire its inexhaustible inventiveness. Things you never imagined were sleazy -
things that actually were never tarnished before - come daily under sleaze's
slimy suzerainty, and are hopelessly compromised, or, like innocence or
paradise, lost" (Source: The Guardian, February 7, 2001, summary by
Pavlidis George).
MONEY
LAUNDERING CONCERNS cited in US
Senate Staff Report, Wall Street Journal, NY Times and AP, Feb.
5, 2001. Many major US
banks and correspondence banks in various island countries are accused.
FIVE BASIC PRINCIPLES FOR A WORLDWIDE
CODE OF BUSINESS ETHICS. Today most companies have internal codes against
bribing government officials. The OECD
has published guidelines for multinational enterprises, and many nongovernmental
organizations have publicized sets of global principles that,
unfortunately, "lack teeth". According to an article of Mr.
E.B.Kapstein
(Instead business school, Fontainebleau, France)
the World Economic Forum or the International Chamber of Commerce
might usefully serve to help develop best practices for
corporate conduct. According to Mr. Kapstein, some basic principles that
could help the effort could be the following: 1) Companies should ensure
the safety of their products and services. They should test their
products in cooperation with consumer organizations. 2) Companies should
encourage transparency in public tenders, in
order to minimize incentives for corruption. 3) Multinational companies
should
pay their workers in every country a wage that is sufficient for maintaining
a life of dignity. In hiring workers, they should not practice any
form of discrimination and they should accept the principle of equal pay
for
equal work. 4) Companies should seek to minimize environmental damage
from
their activities and should report annually on the progress they have
made
in this field. 5) Companies should not conduct business with governments
that refuse to support these ethical principles and they should report
to the international media any efforts by public officials to subvert
or
undermine them. (Source: International Herald Tribune, January
24, 2001, summary by Pavlidis George).
“THE FIGHT AGAINST CORRUPTION
IS FAILING …” SAYS HEAD OF CORRUPTION STUDY CENTER Rachel Ehrenfeld, Director of the Center for the Study of
Corruption and the Rule of Law has suggested that international lending
institutions build specific requirements for effective anti-corruption
policies, rules, and practices in order to be eligible for funds. Further, a measured benchmark should be
developed against which countries’ actions to fight corruption can be
tested. The governing elite of some
countries has looted billions of dollars and unchecked corruption undermines
the foundations of civil society and endangers the stability and legitimacy
of democratically elected governments.
(WT, Dec. 29, 2000,
summary by Marg Reynolds).
EUROPEAN
COMMISSION. The Prodi Commission set a reform program in motion in a positive
response to weaknesses in financial management and control found by the
European Court of Auditors, Mr. Jan
O. Karlsson, President of the Court of Auditors, reports an unacceptable
incidence of errors affecting legality and budget irregularities were found
on various programs. (ECA Press Release, Nov.
15, 2000, summary by Marg Reynolds).
TRANSPARENCY
INTERNATIONAL, INTEGRITY AWARDS
ANNOUNCED. Transparency International (TI) is a global anti-corruption
organization founded in 1993, an organization that today has national chapters
in 75 countries. TI established a TI Awards Committee in late 1999 chaired by
Virginia Tsouderos (Chair of TI's national chapter in Greece) Today the first
winners of its new Integrity Awards were announced. Peter Eigen, Chairman of
TI said: "Fighting corruption requires enormous personal courage in many
countries and today we are honoring people who have put their lives on the
line". "We are recognizing the courage and dedication of
individuals and organizations fighting corruption around the world," he added.
The first winners of the TI Integrity Awards are: Mustapha Adib, a Moroccan
army captain who was condemned to five years in prison after he had exposed
corruption in the Moroccan Air Force. The Concerned Citizens of Abra for Good
Government (CCAGG), a citizens group in a remote province of the Philippines,
which insists that government money is not plundered but reaches the poor.
Lasantha Wickremetunge, an investigative journalist from Sri
Lanka whose paper was banned in May after he
had exposed corruption. The late Dr. Alfredo María Pochat, a civil servant
who was murdered after he blew the whistle on corruption in the Argentinean
government. The TI Awards will be presented to the winners or their
representatives on Saturday, September 30 at a celebratory event in Ottawa,
Canada on the occasion
of Transparency International's annual general meeting. (Source: TI Press
Release, September 28, 2000,
summary by Pavlidis George).
WORLD
BANK CORRUPTION EFFORTS INCREASED,
BLACKLIST PUBLISHED. The World Bank has decided to publish a
"blacklist" with the names of national and multinational firms that
have been found to be involved in corruption. The list is part of the Bank's
efforts to fight not only corruption in the commercial transactions of different
countries but also to separate the firms involved in it. The purpose of the
blacklist is a boycott of the firms listed, with the hope that the damage to
these firms in terms of image and lost business will discourage them to
continue their corrupt practices. The list will be updated annually. The Bank
aims to show the problem of corruption and remedy it with its instruments and
mechanisms. One of the projects it has started is a research on the financing
of concrete and systematic actions that can be done to limit corruption in
the countries concerned. (World Bank Development News, 13
Nov 2000, summary by Debbie Uy).
Brussels,
62 JOURNALISTS VICTIMS OF ASSASSINATIONS WORLDWIDE IN 2000. The International
Federation of Journalists (IFJ), founded in 1926, is the world's
largest organization of journalists; it represents more than 420,000
journalists
worldwide. Yesterday (19/12/2000),
IFJ released its annual list of journalists and media workers
killed during 2000. According to the IFJ press
release, 62 journalists were killed, many of them investigating cases
of
corruption or expressing political dissent. Aidan White, General Secretary
of the IFJ, said "The death toll speaks for itself; journalists
risk
their lives daily for expressing independent opinions and exposing
wrongdoing".
Many dramatic examples of assassinations are given: in Pakistan,
Sufi Mohammed Khan, a reporter who exposed local Mafia, was killed
after
death threats. In Mozambique,
Carlos Cardozo, a campaigning editor, was shot in an ambush. In Russia,
Sergei Novikov, a radio station owner, who was
criticizing regional political leaders, was killed outside his home etc.
(Source:
Africa News Service, December 20,
2000, summary by Pavlidis George)
United
Nations INTERNAL AUDITS REVEAL
MILLIONS WASTED. The United Nations has saved only $5.3m of a recommended
$17m cost savings, according to an internal audit report by its the Office of
Internal Oversight Services. The small savings was blamed on continued
wasting of resources, fraud and general bad bookkeeping. Among the
irregularities are a payroll audit on a Kosovo mission showing a subsistence
allowance overpaid by about $324,000, and an audit of property management
showing delays in locating and accounting for assets transferred from other
missions. Moreover, a UN official was sentenced to 41 months in prison for
submitting false invoices, causing a loss of $800,000. (Accountancy Magazine,
14 November 2000,
summary by Debbie Uy).
United
Nations WATCHDOG INSPECTOR GENERAL´S OFFICE
SHIFTS FOCUS TO IMPROVING MANAGEMENT. Dileep Nair, chief inspector of the
Office of Internal Oversight Services (OIOS), said in an annual report that
his staff was shifting its focus from investigations of cases of waste and
fraud to audits that result in "less direct savings, but more long-term
savings." Nair said that $17 million in savings had been identified by
his staff this year, and that his office had recovered about $5 million by
renegotiating misunderstood contracts and seeking compensation in criminal
cases. According to the United Nations, the OIOS has saved the UN nearly $90
million. Some of Nair's recommendations in line with his focus to improve
management were creating mini-versions of OIOS within some of the more
complex UN agencies, and stationing analysts in long-term missions to
identify problems before they happen. (Washington Times, 10
November 2000, summary by Debbie Uy).
NAME
AND SHAME CAN WORK FOR MONEY LAUNDERING. A June decision to name 15
territories that do not cooperate with international efforts to fight money
laundering, and a warning that they faced counter-measures if they did not
improve, may be working. Seven of the 15 jurisdictions with "serious
systematic problems" in their anti-money laundering organization have implemented
legislation that addresses problems identified by the Financial Task Force
(FATF) on money laundering. These are the Bahamas,
the Cayman Islands, the Cook Islands,
Israel, Liechtenstein,
Panama and St.
Vincent & the Grenadines. Five
countries are already working on legislation or have promised to do so. These
are Dominica,
the Marshall Islands,
the Philippines,
Russia and St.
Kitts & Nevis. Three other jurisdictions- Lebanon,
Nauru, and Niue-
were named as non-cooperative in the
June report. (The Observer, 20
October 2000, summary by Debbie Uy).
OTTAWA
– Transparency International recently held its annual meeting here,
attracting over 230 people from 60 countries. The meeting saw the
accreditation of several new national chapters and the creation of “Integrity
Awards”. One award was handed
posthumously to Argentinean civil servant Alfredo Maria Pochat , who was
murdered for his anti-corruption activities, another was awarded in absentia
to Captain Mustafa Adib of Morroco, who is currently in prison after opposing
an illegal military procurement, and the remaining two were bestowed on
journalist Lasantha Wickremetunge for his expositions of corruption in Sri
Lanka and the Concerned Citizens for Good Government (CCAGG) of the
Phillippines for monitoring and demanding accountability of public works
projects. (Earth Times News Service, October
19,2000 Summary by Fabian Camacho).
Anti-Corruption Initiatives
at the World Customs Organization
Established in 1952, the World Customs Organization (WCO)
is an independent intergovernmental body whose mission is to enhance the
efficiency of Customs administrations by promoting a transparent and
predictable Customs environment. Concrete tools that have been developed by
the WCO’s Secretariat (in certain cases in cooperation with members and
regions) under this plan are: • A Model Code of Ethics and Conduct for
Customs Officials; • An Integrity Self-Assessment Guide; • The content of a
standard WCO Integrity Workshop which was already implemented on a national
basis in the Czech Republic.
(www.respondaenet.com/english, issue 24 of the US AID Newsletter)
Interpol and the Fight
against Corruption
Established in
1923, the International Criminal Police Organization or Interpol is an entity
composed of 178 members states to promote mutual assistance among criminal
police authorities from around the world. It became actively involved in
initiatives to curb corruption in April 1998, when its General Secretariat
unanimously approved a recommendation to set up an Interpol Group of Experts
on Corruption (IGEC) was mandated with fighting all forms of corruption
through effective law enforcement, education and prevention. The Group of
Experts prescribe minimum standards for law enforcement officers. The Group
of Experts also compiled an international list of national contact points, to
serve both as a point of first contact with regards to operational
cooperation, as well as a conduit for the complaints from the public. This
list will be posted on the Expert Group website for easy reference. This
website is currently under construction, and will be accessible at the end of
November via the existing Interpol site. (www.respondaenet.com/english, issue
24 of the US
AID Newsletter)
September
14, 2000. New Corruption Perception Index released
by Tranparency International.
G7
STATEMENT RELEASED IN PRAGUE:
Items 12 and 13 deal with corruption and bribery
12.
We reaffirm our commitment to MDB reform aimed at helping countries reduce
poverty and welcome the substantial progress that has been made in
translating these shared priorities into core policies and operational
practices. The challenges are to build on this progress, to translate the
principles of good governance, selectivity and accountability, the importance
of ownership and participation, into concrete action aimed at a substantive
development impact. We call on the MDBs:
-To present proposals aimed at strengthening internal governance and,
in particular, compliance with safeguards and fiduciary policies. -To develop
Memoranda of Understanding between the World Bank and regional MDBs setting
out areas of specialization and collaboration. Actions against Money
Laundering and the Abuse of the Global Finance System.
13.
We have made significant progress in recent months in the international fight
against financial abuse, including money laundering and corruption, in
particular through the work of the Financial Action Task Force on Money
Laundering (FATF) (establishing a first list of noncooperative
jurisdictions). We reaffirm our strong supports of the efforts by the OECD
(addressing harmful tax practices) and the FSF on OFCs, and by the FATF for
the inclusion of its recommendations among priority international financial
standards. We commit to pursue the review of additional noncooperative
countries and territories in the FATF. We are prepared to provide, where
appropriate, our technical assistance to jurisdictions that commit to making
improvements to their regimes. We are committed, where dialog to ensure
compliance with international standards has demonstrably failed with
countries listed as non-cooperative by the FATF, to defining an appropriate
and comprehensive set of countermeasures. These would include the possibility
to condition or restrict financial transactions, in order to protect the
international financial system against abuse and to condition or restrict
assistance by the international financial institutions to those
jurisdictions. We have already issued advisories to our banks and other
financial institutions to demonstrate our commitment in this field. We call
on the IMF, the World Bank, and the regional development banks to fully
integrate the fight against financial abuse in their surveillance exercises
and programs. We urge the IMF and the World Bank to prepare a joint paper on
their respective roles in combating financial abuse and to protect the
international financial system, for discussion by their boards before the
spring meetings and ask them to report to the spring IMFC/ Development
Committee meetings on the status of their efforts. (September
23, 2000).
G7
and dirty money FUKUOKA, Japan.
The Group of Seven leading industrialized nations announced a new campaign to
deter money launderers and erode tax havens. Fifteen Nations were
identified as committing financial crimes in a report issued by The Financial
Action Taskforce. The nations identified in this report are Russia,
Israel, the Bahamas,
Dominica, Liechtenstein,
Niue, Cayman Islands, Marshall
Islands, Panama,
St. Kitts and Nevis,
Cook Islands, Lebanon,
Nauru, the Philippines,
and St. Vincent and the Grenadines.
The Group of Seven leading industrialized nations will issue advisory notices
to their domestic commercial banks to increase scrutiny on transactions that
involve these Nations. Lawrence Summers, U.S. Treasury Secretary believes
that the International Monetary Fund and the World Bank should do the
following in to help fight financial crime: provide technical assistance to
targeted countries who needs to introduce new laws that meet international
norms, and to consider compliance with such standards when considering loan
requests from their client countries. (DJ News, July
8,2000, summary by Rosado Maritza).
WHO's
financial health
In
the mid-1990s, the WHO was investigated for poor accounting practices by the U.S.
and several European governments
The
prestigious British Medical Journal wondered if the agency was doomed to
"flounder in a morass of petty corruption and ineffective
bureaucracy."
At
about the same time, Mr. Dietrich in these pages pointed out that the WHO was
increasing the budget for conferences by 73% while slashing funds for some
vaccinations in poor countries.
The
agency's own reports admitted that infectious diseases were rising because
"vigilance had been relaxed." Millions die every year from
infectious diseases -- most of those lives could be saved by a vaccine that
costs less than $1 per dose.
The
WHO did clean up its bookkeeping in response to the 1990s complaints. And it
also has stepped up spending for vaccinations, we're told. So maybe the
critics did some good. Instead of excoriating them, the WHO should consider
them free consultants.
(W
S Journal Europe, August 3, 2000,
summary by Rujuta Vinod).
CFO
Prediction
We
estimate that within three years, three-quarters of the region´s banks will
have a CFO in place, creating and driving the financial management processes
that Asia´s banks need to prosper and compete.
(By
Philip D. Sherman and Philip E. Strause. Mr. Sherman and Mr. Strause are part
of Deloitte Consulting´s Asia-Pacific financial services industry practice).
Asian Wall Street Journal, August
10, 2000
Sectretarty
Albright urges Asia to curb corruption and cronyism
The
U.S. urged
action Friday against cronyism and corruption in Southeast Asia,while
China
criticized inequalities in the world economy at an Asian security.conference
Friday.
U.S.
Secretary of State Madeleine Albright praised Southeast Asian countries for
recovering from financial turmoil that hit the region in 1997, but said
future stability would depend on strengthening the rule of law.
China´s
Foreign Minister Tang Jiaxuan railed against the "unequal international
economic order" that he said is manifested by rich countries´
preoccupation with human rights.
The
officials made the remarks at an annual gathering of the 10 members of the
Association of Southeast Asian Nations or Asean, and other countries with
interests in Asia
The
conference gives countries an opportunity to exchange views on everything
from politics and the economy to regional security. Asean comprises Brunei,
Cambodia, Indonesia,
Laos, Malaysia,
Myanmar, the Philippines,
Singapore, Thailand
and Vietnam.
Albright
noted that Asean was moving into its second year of economic recovery
following the devastation of a regional financial crisis in 1997 and 1998.
"The hard decisions that some Asean nations had the courage to make on
banking reform and privatization are paying off," Albright said.
To
grow further, countries needed to adapt to globalization by keeping an eye on
market fundamentals, e-commerce and education, she said. "A critical
component of this effort will be strengthening the rule of law and curbing
official corruption and cronyism,"
Albright
said. The economic crisis has variously been blamed on lax financial
regulations and governance, but also on the swiftness with which Western
banks retreated when financial turmoil struck.
Dow Jones Newswires (AP), July
28, 2000
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