Aid: Anti-Corruption Measures

Lord Bates Excerpts

Tuesday 2nd April 2019 Grand Committee

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, I congratulate my noble friend Lord McInnes on securing this debate. I thank him and all noble Lords for their contributions during this short debate, which has gone impeccably to time, urged on no doubt by the gentle interruption at the outset from my noble friend Lady Stedman-Scott.

It has been a wide-ranging debate. My noble friend Lord McInnes began by talking about how corruption can sometimes be used by those who would seek to undermine the value of overseas development assistance. The noble Lord, Lord Anderson, talked about transparency, particularly in the banking system. The right reverend Prelate the Bishop of Peterborough talked particularly about the pressures on small charities. The noble Baroness, Lady Anelay, spoke about some specific examples of work done in South Sudan and the DRC, particularly around gender. The noble Lord, Lord Alton, talked about the importance of monitoring and the inclusive approach. My noble friend Lady Stroud powerfully drew a direct link between institutions, governance and economic prosperity. My noble friend Lord Robathan talked about the importance of Governments’ responsibility to their own people and ensuring that that is the prime responsibility. The noble Lord, Lord Purvis, highlighted excellent third- party sources of data, such as the International Aid Transparency Initiative and Transparency International’s corruption index, and how important it is that they can be used in this area. The noble Lord, Lord Collins, concluded by pointing to the link between corruption and organised crime and the role which civil society can play.

Let me put on record what DfID is doing in this area and then I will turn briefly to the questions that have been addressed to me. The noble Lord, Lord McInnes, rightly began by talking about the importance of tackling corruption, not only as a priority for DfID but as part of our commitment to sustainable development goal 16. Corruption impoverishes developing countries. It diverts public resources from productive use and deters business investment. It hurts the poor the most, a phrase repeated by many of your Lordships.

Tackling corruption and illicit finance is not only essential for development but is firmly in the UK’s national interest. Fighting corruption helps keep the UK secure and opens up new business opportunities and trading partners for the UK. DfID operates in a diverse range of difficult and fragile environments such as Iraq, Afghanistan, South Sudan, and in areas recovering from natural disasters and conflict, many of which have been mentioned today.

The UK is a world leader in humanitarian response and the noble Lord, Lord McInnes, urged us, in the words of my right honourable friend Andrew Mitchell, to be a development superpower. That is already there if one looks at the response of the British public and DfID to the events in Mozambique, Malawi and Zimbabwe.

We have robust measures in place to reduce the risk of aid diversion. We conduct regular assessments of our partners’ financial capability systems and processes, including those of partners further down the delivery chain. This gives us confidence that our partners are well prepared to deliver aid in emergencies and that the aid will go to those in need.

The UK has led global efforts to tackle corruption. Effective measures against corruption require action at three levels: with our partners in developing countries to tackle corruption in their systems; internationally to stop the flow of corrupt money across borders, as the noble Lord, Lord Anderson, mentioned; and, in rich countries also, to show that we are not a haven for corrupt money, a point to which the noble Lord, Lord Collins, also referred.

We can be proud of our achievements working with partners in developing countries. Due to our work, corrupt officials in Sierra Leone have been sanctioned as a direct result of data produced by the DfID-funded Pay No Bribe digital platform, which maps real-time anonymous reports of bribes. Helping countries to address corruption after conflict is vital, because if a country has been destabilised, there are new and greater opportunities for corruption to occur. DfID expertise helped in Afghanistan to establish the flagship Anti-Corruption Justice Centre, which brings together law enforcement and justice institutions to investigate, prosecute and adjudicate high-level corruption cases. My noble friend Lady Anelay talked about DfID’s work in Sudan. She has been a distinguished Minister in these roles and I pay tribute to the DfID staff who work in that difficult posting. It has been a testing time and we appreciate what they do in respect of the girls’ educational challenge and many of the other things happening there.

In addition to supporting change in developing countries, the UK must also ensure that we have our own house in order and that we are not a safe haven for corrupt money. We have a good story to tell here, although we should not be complacent. DfID funding has enabled the National Crime Agency to investigate and prosecute money laundering and bribery overseas where there is a UK link. Since the programme began, 30 people and companies have been convicted of corruption offences and almost £800 million of assets stolen from developing countries have been restrained, confiscated or returned to the developing countries.

I turn briefly to the questions that were raised during the course of the debate. I should say at the outset that if time does not permit for me to give all of the responses, of course I will write to follow up on them. My noble friend Lord McInnes asked whether regular interaction takes place between the FCO and Human Rights Watch. DfID continues to work closely with the FCO on anti-corruption and human rights issues, including with the main human rights organisations such as Human Rights Watch and the anti-corruption organisation, Transparency International. He asked what support we are giving in terms of country strategies. DfID country teams are working closely with HMG colleagues to implement country anti-corruption strategies. They are updating those strategies at the most appropriate time for the country context—for example, after elections—rather than in line with a UK publication timetable.

The UK is seeking to develop more cross-HMG country anti-corruption strategies as set out in the UK anti-corruption strategy published in December 2017. My noble friend asked about the anti-corruption strategy specifically for Iraq, an issue also raised by my noble friend Lord Robathan and the noble Lords, Lord Purvis and Lord Alton. DfID country teams work closely with HMG colleagues on anti-corruption strategies in Iraq and I will write with further information on those.

The noble Lord, Lord Anderson of Swansea, talked about the role of overseas territories and the Crown dependencies as financial centres and asked what is being done in that area. They are committed to global transparency standards such as the provision of information to law enforcement and for the automatic exchange of tax information. We expect the overseas territories to have fully functioning public registers by 2023.

My noble friend Lady Anelay raised the issue of anti-corruption measures in DRC. DfID’s public financial management accountability programme supports the use of public resources to enable better service delivery and more accountable government in DRC.

The noble Lord, Lord Alton, asked about Pakistan. He has been in regular contact about this issue and I know of his concerns. We are certainly not complacent and want to look into the situation carefully. DfID Pakistan takes a holistic approach to addressing corruption through various programmes including on education, health, taxation and economic growth. It addresses corruption by delivering programmes to engage citizens to demand better services in order to create more transparent, effective and accountable institutions. However, I am in the process of writing further on that particular issue.

My noble friend Lady Anelay also asked about aid for DRC. A robust planning process involving the relevant partners has been undertaken to determine the activities required to end Ebola. These activities have been worked into a single strategic plan that the UK and other donors are working on.

My noble friend Lord Robathan asked how we can ensure that overseas aid is being spent effectively. He made the point that Governments have prime responsibility for this. I commend the speech of the Secretary of State to the Wellcome Foundation last year. She pointed out that in future, one test we should have is that the UK Government should not step in where the domestic Government can and should be doing things themselves, such as providing clean water.

My noble friend Lady Stroud asked what steps we have taken to build anti-corruption institutions and e-systems in fragile states. Where possible, we work with Governments. DfID has programmes such as the Afghanistan Anti-Corruption Justice Centre, which I have already mentioned. The corruption centre helps to achieve our targets under sustainable development goal 16 on reducing corruption and illicit flows. Helping to reduce threats to our security is firmly in the UK’s national interest. The UK is proud of the global momentum we have built up to fight corruption, but we cannot be complacent. We will continue to work with our partners around the world to reduce corruption. This will build a fairer future for people in developing countries and a better future for the people of the UK.