Sub-Saharan Africa (Corruption and the Economy)

Pauline Latham Excerpts

Wednesday 1st July 2015 Commons Chamber

[Stephen Phillips]

I am grateful to the hon. Gentleman for his intervention, and he is absolutely right. I shall come on to his point in due course.

Corruption in the developing world has been a hidden problem for too long, though it is now beginning to be brought home to us by the constant threat to our security and by an untrammelled immigration that sees fires set at the entrance to the channel tunnel in France. It is something that requires effort from every Government across the world to challenge, but it is also something that I fear is still too far down the political agenda across the world to be effectively tackled.

Nothing much is changing in terms of advancing the anti-corruption agenda. On 9 December 2013, on international anti-corruption day, the UN Secretary-General pointed out that

“corruption suppresses economic growth by driving up costs, and undermines the sustainable management of the environment and natural resources. It breaches fundamental human rights, exacerbates poverty and increases inequality by diverting funds from health care, education and other essential services. The malignant effects of corruption are felt by billions of people everywhere.”

[Pauline Latham (Mid Derbyshire) (Con)]

Does my hon. and learned Friend agree that until all Governments have zero tolerance of corruption, they will never be able to invest what they need to invest in health and education, as he said? They should take a leaf out of Rwanda’s book, as that is what it has done, and it is investing consistently, which other countries are not.

[Stephen Phillips]

My hon. Friend is right. I cannot speak specifically about Rwanda, but unless and until all countries bear down on corruption, this will be a problem that endures.

Very little progress has been made since the Secretary-General made those remarks two years ago. Still the procurement managers sit in their air-conditioned offices marking the passage of time on their gold Rolexes; still corporate interests buy their way out of laws designed to protect the environment and to ensure that they pay proper amounts of taxation; still wealthy individuals and businesses ease their passage through difficult lawsuits by ensuring that the judiciary across Africa knows which side is more likely to pay more for the “right” result.

Let us take but one area. In its report “Making a Killing”, published this year, Save the Children estimated that the lost tax revenues to developing countries in sub-Saharan Africa due to illicit financial flows was in the order of $15 billion—a figure that dwarfs this country’s annual aid budget and would pay for 1.8 million healthcare workers. That is a loss of revenue to sub-Saharan Africa in just one area, which is largely made possible by a corruption that allows the maintaining of tax laws and treaties that favour rich corporations which are prepared to bribe Governments and parliamentarians to secure their favoured status. The report fails to take account of perhaps even larger revenues that are lost because a blind eye is turned—once it has been paid for—to direct tax evasion. That is morally wrong. It sustains endemic poverty, and, as I have said, it threatens our own security.

We are not without an international framework within which to deal with the issue. In 2003, the United Nations opened for signature the international anti-corruption convention, which the majority of countries in the world have now ratified. It established some common standards in relation to, for example, criminalisation and law enforcement in chapter III, and international co-operation in chapter IV. However, although monitoring finally began in about 2010, it has been patchy and inconsistent. It also suffers from the major failing that review takes place principally “in region”, thus opening up a whole new field to corruption as non-compliant countries with mutual interests are able to score one another for compliance. One issue that the Minister could usefully discuss with his counterparts in the Foreign and Commonwealth Office is how the convention can be updated to ensure proper monitoring.

I believe that the OECD anti-bribery convention has been ratified by only 41 countries. What efforts are the Government making to ensure not only that it is more broadly adopted, but that it is actually enforced by those who have signed it? In its most recent report on the implementation of the convention in 2015, Transparency International found that there was “little or no enforcement” of it in many states, including the Republic of Ireland. There was “active enforcement” only in the United Kingdom, the United States, Germany and Switzerland.

The conventions are, however, only part of the solution. They assist in establishing common international standards, but without enforcement—or, for that matter, the institutions that are necessary to ensure enforcement—they are essentially meaningless.