Thursday, March 04, 2021

Corruption – 3 Towards Global Justice


Image by herbinisaac from Pixabay

Apologies for taking so long to get back regarding this topic. I confess that I did have a short trip away in the meantime and when I returned the computer had ditched my saved pages, so it has taken a while to get back into it.  There have also been some interesting developments since I started on this topic. On the UN Day for Social Justice on the 20th of February, FACTI  -the UN high level Panel for Financial Accountability, Transparency and Integrity, released its report, pointing out that corruption, tax evasion and money laundering are costing the world around $600 billion a year or 10% of global GDP, thereby not only keeping millions of people in poverty, but preventing economic recovery from Covid and preventing countries from taking the necessary steps to prevent Climate Change. 

According to FACTI, just recovering losses from tax evasion  alone would enable  9 million elderly people in  Bangladesh to access the social safety net, or it could fund 38,000 classrooms in Chad or build 8,000 wind turbines in Germany,

The panel, made up of world leaders, bankers and NGOs also pointed out that between April and July 2020 alone, at the height of the pandemic, the world’s wealthiest people increased their net worth by 27.5% thus also contributing to rising inequality. This has led to a global push to end money laundering and tax evasion by revealing who the beneficial owners of companies really are – i.e. the people who are actually making the profit.   

Closing the Tax Loopholes

In consequence over 50 countries including NZ (2018), The UK (2016), Canada, the USA (2020) and the EU (2017), China, Brazil, Switzerland and even favoured tax havens such as Liberia and the British Virgin Islands (October 2020), have now passed laws to prevent money laundering through accounting firms, lawyers and real estate agents by requiring registration of the beneficial owners.  In some cases these registers are public as the UN recommends. However, in others such as the EU and the USA they can only be accessed by law enforcement or similar bodies. It does however limit the creation of “dummy” companies and their use by organised crime.

Ownership registers are just one aspect of the crackdown on tax avoidance.  Other recommendations include a UN Tax Convention which includes a uniform corporate tax rate around the globe of between 20- 30% to avoid a race to the bottom, whereby international companies transfer profits overseas to take advantage of the lowest rates. It also includes the need to hold the ‘enablers’ of tax evasion such as financial consultants, lawyers, staff, executives and board members accountable for illicit financial flows as well as being able to recover and repatriate illegally obtained assets.

How to be a pariah in the International Community

Australia I am ashamed to say, still lags far behind – “On a par with Haiti or Madagascar” according the International Action Task Force, in its failure to compel firms to disclose suspicious transactions due to resistance by the real estate sector and other lobbyists. It has implemented or only partially implemented 14 out of 40 recommendations and has failed to adequately fund either the Australian Tax Office or ASIC the company watchdog. In February 2020 it finally passed two modest laws. The first is that company directors can no longer backdate resignations to avoid personal liability and the second is that some measures are to be put in place (unique identifiers) to prevent directors stripping companies of assets, going into liquidation and then starting new companies under another name – the practice known as ”phoenixing.”

This shows that despite general trend towards greater transparency there is still much work to be done. Implementation varies considerably as does compliance and enforcement. 

China’s register for example, only applies to foreign owned entities while the UK plans to introduce one for foreign owned property as well. Many other provisions of the UN Convention Against Corruption such as codes of conduct for public officials and transparency in public procurement; the need for public access to information and participation in educational programs; provisions for asset recovery and the need for protection of whistleblowers and so on, have yet to be widely adopted at the national level.  We shall look at how these can be advanced in the next post.


Monday, February 22, 2021

Corruption 2 – What Governments are doing (and not doing)

Image by Steve Buissinne from Pixabay


There are two major international institutions which seek to end corruption. The first is the UN and the second is GRECO the Group of Nations against Corruption. Although based in Europe, the latter is also open to other nations outside the EU. Their main instruments and methods are set out below.

The Role of the UN

1.       UNCAC – The UN Convention Against Corruption was adopted in 2003 and by May 2020, 187 countries had become signatories, promising to do what they could to eliminate corruption.

The Convention basically calls for countries to cooperate in preventing and criminalising activities such as trading in influence and abuse of power by governments and for the elimination of financial fraud and money laundering in the private sector. It also seeks to strengthen international law enforcement and to create effective legal mechanisms for the recovery of funds. To achieve its aims, there are peer review mechanisms as to how member states are doing on several dimensions and it also stresses the need for transparency and the involvement of civil society and Non – Government Organisations in the reporting process.


In order to achieve these aims, each country is required to submit a self -assessment. This is followed by a peer review and then, in conjunction with representatives from this government, it produces a report which it is not obliged to publish, though an executive summary is placed on the UNODC website. If you want to read the reports for your country - I don't think you can see anyone else's, then just type its name into the search bar. Publications usually come in several languages.

There are several weaknesses within the system. Firstly many countries lack the technical capacity to adequately respond to the questions being asked. Secondly, it relies initially on self -assessment and there is little transparency throughout the process. Civil society and NGOs can be excluded at any stage and a government can appoint or obtain data from anyone it likes. Lastly, there is little compulsion about the process.  In the three years that had elapsed since the beginning of the last review cycle in 2015, only 20 out of 184 countries had completed the review process by May 2019.


 What GRECO does

2.       GRECO -  The Group of Nations Against Corruption

Begun in 1999 by the Council of Europe’s anti- corruption body, it now has 50 members including the USA.  Broadly speaking, it has similar aims to the UN Convention “Preventing corruption and promoting integrity in central governments (top executive functions) and law enforcement agencies”.[6] Additionally it concerns itself with issues such as the confiscation of the proceeds of corruption and anti -corruption policies in public administration and how they are transposed into domestic law and practice.  In its Third Round of Evaluations it looked into the funding of political parties and elections including issues such as conflicts of interest, revolving doors, declaration of assets and accountability mechanisms while the Fourth and current Round looks at members of national parliaments, judges and prosecutors. In the new evaluation round, GRECO will monitor the measures that states have in place to prevent and combat corruption in functions such as those of heads of State, heads of central government, members of central government (e.g. ministers), as well as other political appointees who exercise top executive functions such as deputy ministers, State Secretaries, heads and members of a minister’s private office and senior political officials.[6]

Unfortunately, like UNCAC, GRECO relies on peer pressure and mutual evaluations for its effect and does not have a mandate to measure the occurrence of corrupt practices. [Transparency International is better placed to do this – see previous post on this topic]. On the plus side, it does insist on site visits rather than self -reporting and thus its evaluations are considered to be of higher quality, especially as they seek to include a broader range of respondents.

Disappointingly, according to its 2020 report, only 27% of its 2019 recommendations have so far been implemented.  As the president remarked in the Foreword to the report, "This explains to a large extent why people’s trust in politics is very low and will be even lower if politicians don’t step up their compliance with integrity standards.”

Where do you turn when government itself is part of the problem?  That will be the subject of a later post.

Sunday, February 14, 2021

Ovarian Cancer Week


Image by jiao tang from Pixabay

To get away from the depressing subject of global corruption, I went to a fabulous fundraiser yesterday. It was a burlesque workshop with boas and bubbles and a lot of really fun women. There was however a serious side to it.

The workshop was hosted by SHE which stands for Support, Hope and Education. This group informs people about Gynaecological Cancer and provides help and support to women with Ovarian Cancer. As it also happens to be Ovarian Cancer week, we’ll talk a bit about it here.


Ovarian Cancer is the seventh and eighth most common cancer in women (it varies by location) and is among the most under -diagnosed and deadly. Unlike Breast Cancer and Cervical Cancer, there is as yet no screening test in the early stages of the disease and in the later stages the prognosis is not very good.  At present more developed countries have the highest rates. The USA for example has around 21,000 diagnosed cases and 14,000 deaths a year. The EU recorded around 300,000 new cases annually with 200,000 deaths in 2012, with Central and Eastern Europe faring the worst. Closer to home, Australia has an average of four diagnoses and three deaths per day, yet India , China, Western Africa and Micronesia recorded much lower rates. A word of caution here though. Given the difficulty of detection, low numbers in less developed countries may reflect lack of data and lack of diagnostic facilities and resources. However, westernised lifestyles do appear to be strongly implicated.

 Risk Factors

Risk factors for Ovarian Cancer include having a family history of breast, bowel or ovarian cancer, having had breast cancer, being over 50, having endometriosis, having no children or having children late in life, using HRT, smoking and obesity or having genetic mutations in the BRCA1 or BRCA2 genes.


Ovarian Cancer is largely asymptomatic in the early stages and the symptoms are easily mistaken for a number of other conditions. Typical symptoms include – appetite loss, feeling tired for no good reason, unexplained weight loss or gain,  feeling full after eating only a small amount, indigestion, bloating, pressure or abdominal pain in the abdomen or pelvic region, a need to urinate often or urgently, changed bowel habits, post -menopausal bleeding or irregular periods. I know that sounds like most of us at some time or other, but if any or all of these symptoms last more than three weeks, you should see your doctor. Early detection is vital.

What our local SHE branch is doing?

Seeking qualified medical help for gynaecological problems isn’t so easy in Tasmania. There is only one specialist for the entire state so patients must come from distant places for diagnosis and treatment. One of the aims of the Tasmanian branch of SHE is to establish a Wellness sanctuary for women and their carers to rest and recover from medical treatment. It hopes to include workshops, yoga and chat groups as well as being able to refer patients and carers to services such as nutritionists, physios and psychologists.

For further information and support:

In Tasmania: She

In Australia: Ovarian Cancer Australia  

(Note this group also has a program for male partners of women diagnosed with ovarian cancer)

International :

In the USA: The Kansas University Cancer Centre 

In the UK:  The Eve Appeal

 Stoppress: 17/2/2021 There could be some good news on on the way. Heard a snippet on the financial news that there may soon be an early diagnostic test for Ovarian Cancer.


Saturday, February 13, 2021

Corruption – That other pandemic


While countries have been preoccupied with Covid 19, another pandemic has been silently stalking the land. Although corruption has always been a problem to varying degrees, the UN believes that the pandemic has allowed far more corruption than usual – in part because of the large flows of money involved and because the need for emergency measures has allowed nefarious activities to flourish with minimal oversight and accountability as to how these funds are disbursed.

What do we mean by corruption?

The UN defines corruption as “the abuse of power or entrusted power for financial gain.” Corruption takes many forms. It’s easy to point to the legendary dictator and Ruler for Life who sold his African nation’s resources to buy himself a mansion in Malibu, or the passport control officer at a popular tourist destination who demands a few dollars extra for letting you pass through unhindered.“Do you have a little money for tea?” is apparently the prelude to a bribe demand in many parts of Asia. South Korea has Chongi, a gift or bribe paid to teachers by parents to ensure that their children get good marks. In other regions you pay officials a little to access government services such as health care or to get the police to attend a crime. 

In developed countries corruption tends to be less visible but may involve much larger amounts. Sometimes it’s outright bribery, kickbacks or political donations or the official who takes “a brown paper bag” of money to turn a blind eye to health or safety violations or who allows a development to go ahead, knowing that the consequences will be damaging to the environment. Perhaps it’s about awarding lucrative contracts or jobs to your mates in exchange for personal favours or taking shares in a company you know will prosper as a result of a forthcoming policy. In short, it’s any use of an official position to advance one’s own.  Closely related are tax avoidance and the diversion of money to off -shore tax havens so that wealth intended to benefit the whole of society benefits only a few individuals. 

Sad to say, Australia is among the countries which has done badly over the last couple of years, slipping to 11th place on the Global Transparency Index well behind Norway, New Zealand and Switzerland. This is no surprise as much legislation has been passed by an appointed committee of business people without parliamentary scrutiny. Even when parliament has met, debate has been gagged, Freedom of Information has been restricted, whistleblowers have been gaoled and the press which normally acts as a brake on parliamentary excess has been hobbled by a partisan commercial press and lack of funds for the public broadcaster as well as the Auditor General’s Department. Some groups aligned with the party in power have been substantially enriched at the expense of others – see for example what has happened with respect to post bushfire recovery or other grants which were also handed out in a very partisan way without regard for departmental recommendations or on the basis of need.

 Several other countries including Mexico, Brazil, Canada and the Philippines have also restricted the right to Freedom of Information during the pandemic and at least two Indonesian officials have been charged with bribery offences relating to Covid 19 Aid.

Why it matters




As Transparency International* points out, “Corruption erodes trust, weakens democracy, hampers economic development, increases inequality, poverty, social division and the environmental crisis.” It also damages a country’s international reputation and makes investors less likely to invest. The IMF estimates that for every one unit fall on the Global Transparency Index, per Capita foreign investment falls by 11%.

Despite the pandemic some countries such as New Zealand and Denmark have been able to lift their rankings to reach equal first in 2020 as the least corrupt countries, so the pandemic is no excuse. Interestingly, during the Trump era, the USA slipped 8 ranks to #23 since 2017 which has no doubt contributed to the general level of unrest and dissatisfaction directed at the Capital. We hope for a speedy recovery under President Joe Biden who at least hasn't put his family members into positions of power.

*Transparency International is a think tank which was started in Germany in 1993. It tracks the performance of 180 countries based on a variety of measures such as bribery in the public sector, diversion of public funds, effective procurement, adequacy of legal frameworks, access to information and legal protection for journalists, whistleblowers and investigators.

How the rankings are calculated 




Unfortunately these rankings do not include tax fraud or illicit flows of money. Anyone who is in any doubt about the extent of this problem should take a look at the Panama Papers or the Paradise Papers to get an idea of how much leakage there is out of national economies, though these are likely to be just the tip of the iceberg.The IMF estimates that around $1.5. to $ 2 Trillion dollars are lost from global economies in this manner and this can have a significant impact on GDP, even bankrupting small economies as well as deterring investors.  See the following video which explains this more fully.

The Cost of Corruption


What can we do about it?

In the first instance, if you become aware of any form of corruption, you should contact Transparency International which has 100 offices in 60 countries which provide free and confidential legal advice and also do campaigning and investigations. It also has a number of Toolkits for use by schools, business, the media and others to encourage responsive and accountable government. We will talk more about this broader global push to end corruption next time.