Searching for middle ground in UK anti-corruption efforts

Citizens hold up stickers during the launch of Transparency International’s anti-corruption campaign in Sri Lanka. Transparency International and other aid groups in the U.K. are calling for more coordination on the government’s anti-corruption efforts. Photo by: Transparency International - Secretariat / CC BY

International aid groups in the U.K. are calling for greater coordination across government in its fight against corruption abroad.

U.K. Secretary of State for International Development Justine Greening launched Monday the International Corruption Unit, only days after the Department for Business and Skills sought input from U.K. businesses on how current bribery legislation interferes with opportunities overseas.

The newly created ICU is a five-year, $33 million initiative to investigate corruption and bribery in priority countries, according to a statement from the Department for International Development, and will be “the central point for investigating international corruption in the U.K.” According to its mandate, the ICU will bring together “existing investigation and intelligence units funded by” DfID and will work with police to investigate international corruption, but makes no mention of other departments handling corruption overseas. It’s unclear how or whether DfID will become involved in the controversial application of the Bribery Act, which is typically overseen by the Ministry of Justice and the Serious Fraud Office.

“It seems to be a case of one hand not knowing what the other is doing,” Peter Van Veen, director of the business integrity program at Transparency International, told Devex, referring also to U.K. Prime Minister David Cameron’s speech last week in which he expressed hopes that scaling up anti-corruption efforts will be part of the sustainable development goals.

The Ministry of Justice Guidance to the Bribery Act of 2010 has drawn criticism from the Organization for Economic Cooperation and Development and U.K.-based aid groups for years. But as the U.K. ramps up its business agenda — it hopes to export $1.6 trillion worth of goods and services by 2020 — U.K. businesses are pushing the government to soften its stance on bribery to ease dealings in developing markets, where bribes are more commonplace.

OECD criticized the Bribery Act Guidance in 2011 for creating loopholes in the enforcement of international corruption conventions, particularly around “facilitation payments” or amounts of money paid to bypass government licensing or regulations, for example money paid to customs or civil officials. It was reported in the British media last week that facilitation payments are the chief area in which U.K. businesses are seeking greater leniency.

However, a spokeswoman for the Department for Business Innovation and Skills denied that it had opened consultations with U.K. businesses about relaxing the Guidance, and insisted the engagement was purely “informal.” At the same time, some civil society organizations feel that informal consultations pose a greater threat than an open, inclusive dialogue that involves all stakeholders, including aid groups.

“[Informal consultations] might result in [government] only consulting the people who have complained about the Bribery Act rather than garnering the full views of all those affected,” said Susan Hawley, founder and co-director of Corruption Watch.

Still, a Ministry of Justice spokesman emphasized to Devex that the U.K. government “is not reviewing the Bribery Act” and that any recent contact with the private sector is part of “routine dialogue” about improving the law and making sure stakeholders understand its application.

“We are proud of the Bribery Act and serious about tackling corruption,” the spokesman told Devex.

A new force in the global fight against corruption?

“One of the things [nongovernmental organizations] struggle with most is the small bribes problem,” Van Veen said. “Most aid clearly goes to the higher-risk areas of corruption, and that’s where a really clear, consistent message is important.”

For aid organizations working in conflict and post-conflict areas like the Democratic Republic of the Congo, South Sudan, Syria and Nepal, Van Veen explained, the rule of law is weaker and bribery and corruption can take root more easily.

“Emergency relief organizations have worked hard on strategies to prevent bribery demands arising. It would be a real shame to backtrack now and say, ‘It’s OK, you can bribe again.’ It would send entirely the wrong message to both aid organizations and in-country institutions,” he said.

More than that, Hawley argued it could set back progress toward better anti-corruption measures in the U.K. private sector.

“If honest companies have put in place good policies for preventing facilitation payments and the U.K. government then makes an exemption for payments below a certain level, which appears to be what some [in] the private sector are arguing for, it would undermine those companies' policies,” Hawley told Devex.

While aid organizations largely welcome the addition of ICU to DfID’s anti-corruption efforts, it’s unclear whether the existence of the ICU will change what many see as lax application of current corruption laws.

Although facilitation payments remain technically illegal under the Bribery Act, the U.K. Serious Fraud Office has never prosecuted any organization for violating the restriction. SFO has claimed in public statements that it will only prosecute companies for systematic bribery, rather than for one-off offenses, even where facilitation payments violate host country laws.

According to a DfID statement, the newly launched ICU includes in its mandate the investigation of “U.K. nationals and companies who engage in bribery or other corrupt practices in developing countries.” At the time of publication, DfID officials had not responded to requests for comment.

A house divided

Still, for Eric Gutierrez, senior adviser for accountable governance at Christian Aid, softening restrictions on facilitation payments could give authorities the leeway to pick and choose in the application of international anti-corruption efforts.

“I don’t buy the dichotomy that businesses could deal one way with facilitation payments while development organizations continue to battle corruption,” Gutierrez told Devex. “This is just plain duplicity. In the longer term, this kind of parallel standards erodes relationships of trust that will leave everyone worse off.”

Gutierrez added that more leniency around facilitation payment restrictions, which some British businesses believe hamper competitiveness, creates environments in which contracts will be awarded not to the company delivering the best service or the most efficiently produced contracts, but to those that are better connected politically and able to bribe their way through.

Despite the impact of potential changes to the Bribery Act Guidance on aid organizations’ policies and foreign aid broadly, DfID has remained silent on criticisms of the law.

Regardless of what Hawley and others called a “small group of powerful businesses” lobbying for relaxing the Guidance, research commissioned in July by the U.K. government found that 89 percent of small to midsize enterprises operating overseas did not feel the Bribery Act restricted their ability to pursue business opportunities abroad, suggesting not everyone sees the choice between good business and good governance as an either-or proposition.

For more U.K. news, views and analysis visit the Future of DfID series page, follow @devex on Twitter and tweet using the hashtag #FutureofDfID.

About the author

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    Molly Anders

    Molly Anders is a former U.K. correspondent for Devex. Based in London, she reports on development finance trends with a focus on British and European institutions. She is especially interested in evidence-based development and women’s economic empowerment, as well as innovative financing for the protection of migrants and refugees. Molly is a former Fulbright Scholar and studied Arabic in Syria, Jordan, Egypt and Morocco.

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