On 2 March the Financial Accountability Transparency and Integrity panel (FACTI panel) was launched with terms of reference that would have had Moses in a sweat as he answered God’s call to summit Mount Sinai. As corruption was infecting his nation, and had been since Eve tempted Adam in the Garden of Eden, those of the Abrahamic traditions will know that the panel faces a daunting task.

The two initiators provide an overview of their vision in the announcement of the establishment of the FACTI panel:

“This initiative, taken upon our own responsibility, was developed in consideration of the request contained in General Assembly resolution 74/206 entitled; ‘Promotion of international co-operation to combat illicit financial flows and strengthen good practices on assets return to foster sustainable development’. We expect the panel to offer new and creative solutions to make the systems for financial accountability, transparency and integrity more robust, effective, and universal in approach.”

This note focuses on the unavoidable role of countering corruption in the execution of the mission of the panel as it relates to reforming integrity systems with new and creative solutions. 

Accountability and integrity are currently in short supply in the world, hence the establishment of the panel. Corruption in high places, sometimes called “grand corruption” (a concept yet to be defined in international law) is often identified as the reason for the absence of proper accountability and effective integrity in the modern context. 

When it comes to grand corruption, the problem is arguably somewhat more subtle: it is the culture of corruption with impunity that emboldens ever-increasing numbers of powerfully placed individuals to “go over to the dark side” to enjoy the fruits of their illegal activities. Looting without any prospect of being punished or even having the loot confiscated, wherever in the world it is stashed, are attractive propositions to too many politicians, public servants and people in business. Impunity lures them in with its siren call.

That was not the case with Adam and Eve: he was told off in no uncertain terms: “… on your account the earth will be cursed”; Eve’s punishment was “great labour in childbearing” and the middleman, the serpent, was told, “on your belly you will crawl and dust you will eat”.

Modern kleptocrats have devised the perverse aspects of a world order in which they have been able to avoid appropriately dire consequences for corrupt activities. These abominations include captured or meek law enforcement officials, corrupt judges and multiple opportunities for repurposing the state to their own greedy ends. Dense tax laws which elide the avoidance (legal) and evasion (illegal) of taxes, tax havens, illicit financial flows to tax havens, secrecy a la the ‘Panama Papers, and the exploitation of resources of the developing nations that serve to enrich developed nations unfairly are further examples of the world order currently in place. 

It is upon this culture of impunity that the panel is going to have to focus some attention if its terms of reference are to produce autonomously devised lasting solutions to the perennial problems that grand corruption afflicts on nations – and especially the poor, from whose needs resources are diverted to the corrupt to fritter away.

The terms of reference of the panel are wide-ranging. A sample, relevant to corruption (the absence of integrity) will suffice to illustrate this point:

“The current international institutional architecture falls short on many accounts in combating all types of illicit finance – from criminal, corrupt or commercial activities – and returning stolen assets to their country of origin. These areas include: financial transparency, tax matters, combating bribery and corruption, preventing money laundering and returning stolen assets. Rethinking and redesigning the international frameworks related to financial accountability, transparency and integrity is critical to financing the Sustainable Development Goals. This is a global problem that requires global co-operation.”

The stakes are high as the panel is expected to contribute to the implementation of:

“The ambitious and transformational vision of the 2030 Agenda to change global economic and financial systems to make them fair and equitable: systems that contribute to ending poverty and hunger and achieving sustainable development in all its dimensions. Our common goal is to promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions.”

A leading cause of the “global problem” alluded to in the terms of reference quoted above is the impunity that the powerful are able to enjoy. There is no shortage of laws relating to corruption. As was recently pointed out by Judges Goldstone and Wolf of Integrity Initiatives International:

“Grand corruption does not flourish because of a lack of laws. There are 187 nations party to the United Nations Convention Against Corruption [UNCAC]. Almost all of them have laws prohibiting extortion, bribery, money laundering, and misappropriation of national resources. They also have an international obligation to enforce those laws against their corrupt leaders. However, kleptocrats enjoy impunity in their own countries because they control the administration of justice. They will not permit the prosecution and punishment of their collaborators and themselves.”

Irrespective of what the FACTI panel recommends in relation to financial accountability and transparency, all of its work will come to nought if it is unable to devise a means of ensuring integrity by dealing decisively with the kleptocrats who regard themselves as above the law and who continue to loot and plunder the public purse to the detriment of the UN SDGs. It is the achievement of these goals which has inspired the FACTI initiative.

According to Article 5 of UNCAC, those 187 member nations are obliged to:

“… maintain effective, coordinated anti-corruption policies that promote the participation of society and reflect the principles of the rule of law, proper management of public affairs and public property, integrity, transparency and accountability.”

These obligations are all too often honoured in the breach in that no effective anti-corruption structures operate to ensure integrity: hence the culture of corruption with impunity.

The FACTI panel will have to give close attention to this aspect of its terms of reference. Any failure to do so will surely render other reforms it recommends difficult to enforce or even unachievable. Either the anti-corruption machinery of the nations party to UNCAC might have to undergo radical reform to beef up the effectiveness of the war on grand corruption, or some other way of dealing with the kleptocrats is going to have to be devised.  

A cost/benefit analysis may reveal that transferring responsibility for ending the culture of grand corruption with impunity to an International Anti-Corruption Court, which operates on the basis of complementarity, may prove to be the most elegant solution to the problem. Complementary means that this new court would exercise its authority to prosecute only if a country was found to be unable or unwilling to prosecute its leaders itself. Countries not desirous of having their leaders internationally prosecuted would accordingly be incentivised to improve the anti-corruption and integrity measures on the home front.

It is going to be interesting to see what the FACTI panel brings down from the mountain when it reports back to the two presidents who have established it, especially on how to effectively defend the integrity systems currently under siege in world affairs. DM