Economic Crime and Corporate Transparency Bill

Debate between Lord Oates and Baroness Bennett of Manor Castle

Committee stage
Tuesday 9th May 2023 Grand Committee

[Lord Oates (LD)]

My Lords, on behalf of the noble Lord, Lord Hain, who cannot be in the Committee today, I rise to move Amendment 103 in his name, my name and those of the noble Baronesses, Lady Wheatcroft and Lady Altmann. In doing so, I pay tribute to his tireless efforts in exposing corruption, particularly the key role he played in bringing the kleptocracy of former South African president Jacob Zuma to the world’s attention.

This amendment would require the UK Government to begin negotiations for the establishment of an international anti-corruption court, or IACC, within six months of the passing of this Bill. International corruption is estimated to cost $2 trillion, or 5% of global GDP, every year. In a 2021 report, the UN High-level Panel on International Financial Accountability, Transparency and Integrity calculated that as much as 2.7% of global GDP is laundered by criminals through illicit global financial flows. While these opaque transactions occur in all countries, they have a much heavier impact on low and middle-income countries. The Washington-based organisation Global Financial Integrity found in its most recent report that from 2004 to 2013 developing and emerging economies lost $7.8 trillion in illicit financial flows—around 10 times more than the entire sum of foreign aid, including aid from the UK, that they received over the same period. Illicit outflows are increasing rapidly at an average rate of 6.5% per year, nearly twice as fast as global GDP.

A substantial proportion of that corruption comprises theft by a nation’s leaders of state funds for their own use—in other words, kleptocracy. Putting an end to that kleptocracy and recovering assets stolen by corrupt leaders would enable millions of the poorest in our world to be adequately housed, clothed and fed by helping prevent national treasuries being looted to line the pockets of corrupt politicians and their business cronies.

That so many kleptocrats succeed is not because of a lack of domestic laws; there are 189 parties to the UN Convention against Corruption. Most of them have complied with their obligations under the convention to have appropriate domestic anti-corruption legislation, but to facilitate their criminal activities kleptocrats have gutted their domestic criminal justice systems and taken control of the prosecuting authorities, police and, frequently, courts. There is no better current illustration than President Putin, who with his oligarch accomplices has looted the country.

Another prime example, whom I have mentioned already, is former South African President Jacob Zuma, who with his business cronies the Gupta brothers looted on an industrial scale and deliberately disabled police and prosecutors, so much so that the country was estimated to have lost fully one-fifth of its GDP during his infamous state-captured decade. Across the border in Zimbabwe, the ZANU-PF regime is mired in corruption, which has robbed the Zimbabwean people of what should be a bright economic future. Instead of serving the people, regime leaders, aided by corrupt businesspeople and a prosecutorial and judicial system entirely captured by the ruling party, loot the country at will. Just last week, opposition politician Jacob Ngarivhume was sentenced to four years’ imprisonment simply for calling for peaceful protests against corruption in July 2020.

Few of these kleptocrats keep their ill-gotten gains at home. Billions of dollars of stolen assets are laundered in a number of countries, including China, Hong Kong, Dubai, Singapore, Monaco, Switzerland, some states of the United States, UK overseas territories and, shamefully, London. Recently, the Al Jazeera documentary “Gold Mafia” secretly filmed Zimbabwe officials and business contacts conspiring to launder illicit funds. Those filmed included at least three British citizens—Uebert Angel, Rikki Doolan and Kamlesh Pattni—who made clear on camera their willingness to act corruptly. I know that the Minister cannot comment on those individual cases, but I hope that the National Crime Agency is investigating the activities of these individuals and others named in the documentary and the sources of their wealth, and that the authorities will not hesitate to freeze their funds while these investigations are being pursued.

However, while British authorities can act on crimes committed under UK jurisdiction, there is no international mechanism to prosecute kleptocrats and to seize and return their illicit funds. This gaping vacuum can be filled only by establishing an international anti-corruption court that can hold corrupt leaders and their co-conspirators accountable.

If some of the countries where laundered funds are held would join such a court, the stolen assets could be frozen and then, through orders of restitution, be repatriated to the countries from which they were stolen. If the risk of those funds being misused if returned to a corrupted state are too high, they could be repurposed and repatriated only at a time when they would reach the real victims: the millions in need in those countries.

The envisioned court would have jurisdiction over crimes committed by nationals of an IACC member state and crimes committed on the territory of an IACC member state. It would enforce existing national anti-corruption legislation and would be a complementary new international counterpart to these laws against kleptocrats and their collaborators.

The IACC would be a court of last instance, meaning that it would acquire jurisdiction only in cases in which the appropriate domestic authorities are unable or unwilling to investigate or prosecute the corruption. For the IACC to succeed, it would not be necessary for the countries governed by kleptocrats to join the court—it goes without saying that they would not. The IACC could be established by treaty and quickly become effective if it consisted initially of even a relatively small number of representative states, so long as they included some financial centres and other attractive destinations where kleptocrats frequently launder, hide and spend their stolen assets.

In this way, the IACC would have the potential to prosecute, punish and recover illicit assets from kleptocrats who rule or are very powerful in the countries that might not initially join the court. Most importantly, the threat of criminal prosecution at the IACC would deter other potential crimes of grand corruption by leaders who may otherwise be tempted to emulate the example of the kleptocrats.

The cost of the IACC would constitute a small fraction of the amount of illicit assets that it could seize and return to their originally intended purpose for the public good. In addition to orders of restitution, it could levy funds on those found guilty, which could be used to defray some of the cost of its prosecutions and proceedings.

If the court demonstrates during its early years that it can work effectively and efficiently, many other countries are likely to join it. In the aftermath of kleptocratic government, some developing countries may not have the human and financial resources to fight kleptocracy, so could approach the IACC to come to their assistance. A senior United States federal judge, Mark Wolf, is leading a campaign to establish such a court. Together with others, including the renowned South African jurist Richard Goldstone, he launched a civil society called Integrity Initiatives International. Its main project is to establish the IACC, and it has convened a number of the world’s top international lawyers to begin drafting a treaty for the court. None of its supporters see the court as a panacea that will end the kleptocracy any more than the International Criminal Court has ended illegal or genocidal activity by political leaders. However, it would be one of many tools, domestic and international, that are absolutely essential to combat and, I hope, ultimately defeat kleptocracy.

Almost 300 leading figures from across the world, including 45 former presidents and Prime Ministers and 32 Nobel laureates, have signed a declaration calling for the creation of the IACC. Three Governments—the Netherlands, Canada and Ecuador—have made the establishment of the court an element in their official foreign policy. In January this year, Nigeria became the fourth country to publicly state its commitment to working with other states towards the establishment of the court. Recently, the President of Moldova, Maia Sandu, also committed to joining the emerging coalition of states for the IACC. Additional countries from each region of the world have also expressed their interest in the idea.

The United Kingdom and our legal profession have always led in establishing and participating in international courts of last resort. This started with the ground-breaking Nuremberg trials and went on to include the International Court of Justice and, of course, the International Criminal Court.

The Government’s Integrated Review Refresh, published earlier this year, committed the UK to championing global efforts to ensure that revenues and assets lost to illicit finance are identified and recovered so that low and middle-income countries can self-finance their own development. This commitment was reiterated by the Minister for Development and Africa in his Chatham House speech on 27 April when he said that

“we will bear down on money-laundering and the flows of dirty money which deprive countries of their legitimate tax receipts and represent money stolen particularly from Africa and African people”.

We must live up to these commitments. I therefore urge the Government to accept our amendment and ensure that the UK becomes one of the early and leading supporters of the establishment of the IACC, lending the UK’s weight and expertise to finding the fastest route to the creation of the court and the most effective framework for its operation.

I beg to move.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I rise with great pleasure to follow the noble Lord, Lord Oates, who made a powerful, persuasive and rich speech. I echo him in paying to the noble Lord, Lord Hain, for all the work he has done in this area.

The noble Lord, Lord Oates, rightly acknowledged that the international anti-corruption court, which I absolutely back—backing for it is clearly growing by the day—is one of many tools that we need to tackle economic crime. My Amendment 106A seeks to put another tool in the toolkit. At the moment, it is perhaps in a prototype stage and is earlier in development than the international anti-corruption court, but it is growing fast and has significant international backing.

I am proposing that the Government should provide leadership in supporting UN General Assembly Resolution 77/244, which was passed on 30 December last year with leadership from Nigeria and the Africa group. It calls on the Secretary-General to prepare a report on how

“to strengthen the inclusiveness and effectiveness of international tax co-operation”.

This has been seen as a step towards a UN convention on the issue and the establishment of international bodies to enforce it. I hope that some noble Lords who are taking part in this debate or who read Hansard later will be interested in joining me in pushing this forward as an issue on which Britain can and should be a leader. Due to the limited scope of the Bill, I have had to cut down somewhat what the General Assembly resolution says, but there are still steps that we can take forward here; I will be very interested to hear the Government’s response to this UN General Assembly resolution.

Following on from what the noble Lord, Lord Oates, said, it is clear that chasing economic crime money, particularly tax evasion, is what is known in the jargon as a wicked problem. The aims of the evaders are simple; their reach is global and the ability to act is measured in seconds. Money can be shifted in less than a click of my fingers. However, national states have very complex goals in development, rights and the rule of law, and their powers are individually restricted within their own borders. Their legal framework is limited in resources, as we discussed in our debate on the previous group, and frequently takes a lot of time to move into action.

It is worth looking at what Attiya Waris, the UN independent expert on the effects of foreign debt, told the UN General Assembly last year:

“The shortcomings of the international and national tax systems require international cooperation and assistance. They cannot be addressed unilaterally”.


The idea of a UN convention got virtually no coverage or attention in the UK but, internationally, there is a great deal of work going on. That was reflected in a letter sent in March to the UN Secretary-General by scores of civil society organisations—including some that will be familiar to noble Lords, such as Action Aid, the Tax Justice Network and World Economy, Ecology and Development.

Nuclear Energy (Financing) Bill

Debate between Lord Oates and Baroness Bennett of Manor Castle

2nd reading
Monday 21st February 2022 Lords Chamber

[Lord Oates (LD)]

A huge amount of work could be done. Huge numbers of homes that are in very poor housing stock and in very poor condition could easily be brought up to speed. That is the urgent thing that needs to be done now instead of becoming obsessed with huge power plants which are immensely expensive, highly complex and cannot possibly come online in time to meet the targets that the Government have set themselves.

[Baroness Bennett of Manor Castle (GP)]

Does the noble Lord agree with me that the noble Lord who just intervened on him—

--- Later in debate ---

[Baroness Bennett of Manor Castle (GP)]

I am sorry; I was trying to get the terms right. The noble Lord, Lord West, might like to go to Portsmouth to see where there was a wonderful passive house refurbishment of an entire council house block.

[Lord Oates (LD)]

I am grateful to the noble Baroness. I am sure that the noble Lord, Lord West, is very familiar with Portsmouth and that he will take the opportunity to visit such projects.

As we know, electrical use is highly cyclical, both in terms of daily peaks and troughs and annual swings. Therefore, we have to show much greater urgency about how we use smart pricing to reposition demand rather than simply piling on more production to meet peak load. We also have to invest in energy storage and integrate it into grid planning through batteries, green hydrogen production, pumped hydro, compressed gas storage and other solutions.

Finally, nuclear power generation produces high-level nuclear waste which is deadly for longer than any human civilisation has ever survived. It is notable how few noble Lords who contributed as nuclear proponents to this debate addressed that fundamental issue.

The Minister was keen to tell us, as other noble Lords were, how the UK was the first country in the world to begin a civil nuclear programme, yet decades after that and after promising that a solution to this problem is just around the corner, the Government and industry have still failed to supply one. It is our contention that, quite apart from the other powerful arguments against nuclear, it is morally unjustifiable to build new nuclear stations until we first have a geological disposal facility in operation for the long term to deal with the existing high-level waste we have produced. That is key.

In our view, the case for new nuclear generation projects falls down at every hurdle. They cannot contribute to our 2035 electricity decarbonisation target, they cannot effectively complement renewables, and they cannot even clean up the mess they have already created. So laden are these projects with risk, so staggeringly unable are they to keep to time or budget, and so eye-wateringly expensive is the electricity they generate that the only way to finance them is by passing the risks and costs to consumers and taxpayers who are given no choice over whether to accept them.

It is hard to improve such a fundamentally flawed project, but in Committee we will do our best to bring forward amendments to deal with the specific flaws in the Bill that I identified earlier. We look forward to working with noble Lords across all parties in the House to at least make the best of a bad job.

Advanced Research and Invention Agency Bill

Debate between Lord Oates and Baroness Bennett of Manor Castle

Report stage
Tuesday 14th December 2021 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

In moving Amendment 5 in my name, I will briefly comment on Amendments 4 and 19. Had there been space in our procedures, I would have attached my name to Amendment 4; I note that it has broad cross-party support. It addresses the Climate Change Act and imposes a legal requirement to comply with the duty of Section 1 of that Act, which concerns net-zero emissions. That is an important and good way of expressing it, and I hope that we will see that eventual outcome.

Amendment 19 talks about ARIA having an ESG strategy. This would not be my preferred way forward. In a way, it is better than nothing, and I see the point that was made by the noble Lord, Lord Ravensdale, about lining up with other vaguely similar institutions. However, we have seen a great deal of criticism of ESG as not always being a very strong or effective tool.

My Amendment 5 calls for ARIA to include sustainable development goals 1, on poverty, 2, on zero hunger, and 3, on health and well-being. These are internationally recognised and accepted goals, with targets within them to which the UK, like every country on this earth, is signed up. Surely these should be the goals of every element of the Government, both direct and arm’s-length parts.

I thank the Minister and his staff for engaging with me in discussions on this, but before I get to that I want to address why it is so important to talk about poverty, health and hunger in this ARIA Bill. When people talk about what ARIA will achieve, very often it sounds as if we are talking about Silicon Fen, often known as the “Cambridge cluster”—the region around Cambridge which has so many high-tech business, including software, electronics and biotechnology. But if you look at the reality of life in Cambridge, the top 6% of earners take home 19% of the wealth generated in the city, and the bottom 20% of earners get 2% of the wealth generated in the city.

I encourage noble Lords, if they have not yet seen it, to have a look at an article in the Guardian by Aditya Chakrabarti, who visited a foodbank in Cambridge recently. In his reflections there, he noted that this is a tiny city with a population half the size of a single London borough, yet in one postcode in Cambridge you can expect to live until 87. In a postcode just down the road, it is 78. This is the kind of development that has delivered a miserable life for many, many people. This is why I tabled this amendment.

In the discussions that I mentioned with the Minister and his staff, which raised some very interesting issues, they pointed me to Clause 2(6) of the Bill, which states that, in exercising its functions,

“ARIA must have regard to the desirability”

of various things. Clause 2(6)(c) states that one of those is

“improving the quality of life in the United Kingdom”.

I would be very interested to hear from any noble and learned Lords who might be able to assist me. I am not a lawyer and I am not quite sure what the legal definition is of “quality of life”. I suggest that it is open to political contention and discussion. More than that, in the context of what I was saying about Cambridge, whose quality of life are we talking about? That is a very important question to ask. In your Lordships’ House, I often comment on the Government’s pursuit of GDP as a goal in itself, but here we are talking about quality of life, which surely has to include a distributional element.

That was my purpose in tabling this amendment. I was asked whether I intended to put it to a vote. Given that I called a Division yesterday, and given that I have not had as much time as I would have liked to devote to thinking it through and finding a form of words that really works, it is not my intention to put it to a vote. However, I would be very interested to hear from the Minister what the Government mean by “quality of life” in Clause 2(6)(c). Do the Government acknowledge that that has to address distribution as well as GDP growth? I cannot see any way that it could not. If the Minister is looking for a way of measuring this, I point him to the Living Standards Framework used in New Zealand, which directs the New Zealand Treasury and the actions of the New Zealand Government. That is a good measure of the quality of life. I beg to move.

[Lord Oates (LD)]

My Lords, I rise to support Amendments 4 and 19 in the names of the noble Lords, Lord Ravensdale and Lord Browne of Ladyton, the noble Baroness, Lady Chapman of Darlington, and myself. I commend the noble Lord, Lord Ravensdale, in particular for his tireless work on this issue. I too join in the tributes to the noble Lord, Lord Broers, and wish him well in his retirement. I also have some sympathy with the intention behind the amendment of the noble Baroness, Lady Bennett, which raises very important and wider questions, but I am going to focus on Amendment 4.

As the noble Lord, Lord Ravensdale, has said, a number of Acts of Parliament that have gone through this House have had “have regard” amendments relating to climate change made to them. I was pleased to be a signatory to the cross-party amendment to the Financial Services Bill, which the Government substantially accepted in this regard. This point of consistency is extremely important. However, I would have preferred it if the Government had been willing to accept a stronger amendment on the purpose of the organisation, but I recognise that political pragmatism is wise on occasion.

In Committee, we had a very useful discussion about whether the agency would benefit from the sort of mission and focus that helped the Defence Advanced Research Projects Agency in the United States—mentioned by the noble Lord, Lord Ravensdale—achieve its success. The noble Lord, Lord Lansley, told us that DARPA’s mission had been to not be taken by surprise by new technology and, perhaps by implication, to surprise others with the advanced technology of the United States. That may well have been the mission, but the purpose of the mission was surely what drove DARPA’s success: to maintain the national security of the United States against the threat of Soviet communism. It is that purpose which provided DARPA with its edge, its sense of urgency and an understanding of the stakes of the mission on which it was engaged.

While Soviet communism posed an existential threat to our freedom then, today the threat we face from climate change and ecological destruction is even more acute: an existential threat to life itself. Surely, there can be no more profound purpose to drive our new advanced research agency, no greater focus to inspire research, innovation and the practical application of science, than that of tackling a threat to humanity itself.