Global Shapers Survey and the worldwide concern for corruption

The World Economic Forum released the results to the Global Shapers Annual Survey 2016 in August (#ShapersSurvey). 18,402 responses were made to the question “in your opinion, what are the three most serious issues affecting your country today?” The top response was “government accountability & transparency / corruption”  (57.3% of the responses). So, corruption is the top concern among respondents to the survey. Among them, 10,059 were female and 8,289 were male, and 33% were aged 22-26 and 26% were aged 18-21. This response has made me think because I focused on anti-corruption law and compliance in my private practice once upon a time. So, here are a few thoughts.

Corruption is a broad concept that covers many kinds of failure of governance and breaches of legal, ethical, and moral obligations. Some forms of conflicts of interest are usually at the core of corrupt conduct, which could have criminal ramifications. A factual scenario involving corruption in the legal sense could implicate public and private bribery, tax evasion, antitrust and competition law violations, and money laundering. As such, corporate and bank compliance functions, for example, now tend to monitor for corruption holistically.

The Mail & Guardian Africa observed that:

In Africa, the social and political consequences of corruption rob nations of resources and potential, and drive inequality, resentment and radicalisation. Corruption cheats the continent’s governments of about $50-billion (about R700-billion) annually and stymies successful cities, sustainable economies and safe societies.

A joint report by the African Development Bank and nonprofit advisory firm Global Financial Integrity found that up to 65% of this lost revenue disappeared in commercial transactions by multinational companies. According to Oxfam, as much as 30% of African financial wealth is estimated to be held offshore, costing an estimated $14-billion in lost tax revenues every year.

This corruption discourages donors and destroys investor confidence, strangling development, progress and prosperity.

So, to tackle corruption, it must be identified in its various forms and degrees of gravity. There might be a mix of cultural and structural problems to address. Resource mismanagement and systemic inefficiencies could be causes and effects of corruption. Then, we can design and deploy different solutions, which could include rules, policy guidelines, education and training etc.

The tone from the top is important. In cases of government and systemic corruption, the Office of the High Commissioner of Human Rights notes three key messages:

1. Corruption is an enormous obstacle to the realization of all human rights — civil, political, economic, social and cultural, as well as the right to development.

2. The core human rights principles of transparency, accountability, non-discrimination and meaningful participation, when upheld and implemented, are the most effective means to fight corruption.

3. There is an urgent need to increase synergy between inter-governmental efforts to implement the United Nations Convention against Corruption and international human rights conventions. This requires strengthened policy coherence and collaboration between the intergovernmental processes in Vienna, Geneva and New York, UNODC, UNDP, OHCHR and civil society.

Based on the United Nations Convention against Corruption, the UN has been developing a strong anti-corruption regime for government officials that emphasises prevention and criminalisation of corruption, international cooperation, and that facilitates asset recovery. Certainly, the regime targets government procurement and where transactions take place often between the public and private sectors. In Hong Kong, as I noted in a co-written blog post in 2014, having an independent and well-resourced authority (the ICAC) to investigate and prosecute government corruption (high level officers and low level civil servants) was instrumental to the rapid growth of the local economy and to strengthen the rule of law in the territory. The ICAC has now broaden its mandate and offers useful guidance on best practices to prevent corruption in the private sector.

In the moral / ethical sense, the distinctions between right and wrong can be blurry and hard to define in certain circumstances. This gives rise to practical difficulties that also make legal compliance difficult. Indeed, what is the point of setting standards that only saints can achieve? There are many scenarios where it is challenging to prioritise competing duties. It is also unrealistic to expect individuals to act without self-interest, especially in the contexts of industry and trade. Nevertheless, it takes discipline and external regulation to effectively ameliorate corruption and to appeal to the more positive, civilised side of humanity.