Tackling corruption overseas Contents

Annex: Letter from the Chair to the Secretary of State regarding Tackling corruption overseas, 26 April 2016

Rt Hon Justine Greening MP

Secretary of State

Department of International Development

26 April 2016

Tackling corruption overseas

Dear Justine,

As you will be aware, the International Development Committee is currently undertaking an inquiry into the approach of DFID, and the wider UK Government, to Tackling corruption overseas. We have received 28 submissions of written evidence197 and held an initial oral evidence session on Tuesday 22 March. Committee members also met informally with Rt Hon Sir Eric Pickles MP, UK Anti-Corruption Champion, on 20 April to discuss the ambition for the Prime Minister’s Anti-Corruption Summit on 12 May.

The Committee had originally planned to produce a report in advance of the Summit. However, given the response we have received to the inquiry, and the increased public interest in the UK’s anti-corruption efforts following the release of the Panama Papers, we will be extending our timeframe and inviting evidence from a Minister after the Summit before concluding our inquiry. In advance of the Summit, the Committee was keen that I formally draw your attention to some of the key issues raised by the oral evidence, in order to inform the agenda.

The UK must get its own house in order

We heard from Alina Rocha Menocal, Senior Research Fellow at the University of Birmingham:

“Here the real imperative, especially for the UK but also other western countries, is to get their own house in order, and start with the understanding that this is an international, global problem that has global causes. If the UK is acting as a hub that enables organised crime then there is a need for self-reflection. Having that, rather than a paternalistic look at what other countries are doing, at this level is very important.”198

Shauna Leven, Director of Anti-Corruption Campaigns at Global Witness, told us:

“For the UK to continue to show leadership on the anticorruption agenda by cleaning up our own house. That includes extending our own public registry of beneficial ownership information to the overseas territories, better due diligence on the Tier 1 (Investor) visas, and cleaning up the facilitators of corruption. We have not really spoken about that, but that would include ensuring that banks face meaningful consequences for laundering money and that lawyers and estate agents and accountancies are appropriately regulated.”199

Prioritising enforcement

Aled Williams, Senior Adviser at the U4 Anti-Corruption Resource Centre stated:

“The most recent large initiatives that we have seen have been things like UN conventions, such as the UN Convention against Corruption, and EU-level conventions as well. I would agree that we have more or less the normative frameworks in place for understanding and promoting an anti-corruption approach. What is important is the enforcement aspect.”200

Increasing transparency

We were told by Oliver Pearce, Policy Manager at Oxfam GB:

“Increased transparency through public country-by-country reporting, a commitment by all those attending the summit to implement it in their own countries, and alongside that public registries of beneficial ownerships, including action plans announced by the overseas territories. That would be great leadership and a great step forward for developing countries, and a precursor to a second generation of reforms of international tax systems.”201

Gareth O’Hagan, Head of Extractive Industries Governance Team at Adam Smith International said:

“I will go back to my point on this charter for probity: a commitment to develop a charter for probity202 that includes many of the elements that we have discussed today, such as the beneficial ownership register, strong public financial management systems and probably a long list of indicators that can demonstrate that a country is meeting a lot of the requirements to tackle corruption.”203

Robert Barrington, Executive Director of Transparency International UK, concluded by reinforcing a number of these themes, telling us:

“First of all, do not let the criminals spoil things. Keep them out, or if they attend shut them up. The second thing is that the UK needs to get its house in order if it is going to have any credibility talking about these things. We have mentioned five things we think are the UK getting its house in order: proper funding of the Serious Fraud Office, a plan for how to deal with the overseas territories, two issues about the City and the role in global money-laundering, and finally—and I say this with great respect to the people here—acknowledging that there are corruption issues in UK politics, and those need to be addressed as well.”204

The Committee will return to this topic in July and proposes to examine the outcomes of the Summit and the extent to which they align with the priorities highlighted by our witnesses, and to assess the contribution DFID, and the broader UK Government, are making to tackling corruption overseas.

I would like to use this opportunity to formally invite the Department to provide oral evidence to the Committee at that later stage.

Yours sincerely,

Stephen Twigg

Stephen Twigg MP

Chair of the Committee

Copied to: Rt Hon David Cameron MP

Rt Hon Sir Eric Pickles MP

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202 Adam Smith International’s submission on ‘An International Charter for Probity’ is included as an annex

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18 October 2016