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UK professionals are acting as enablers for corrupt deals in developing countries. It happens in a number of ways and involves a range of industries, including law, banking and accountancy. For example, a corrupt state official from a developing country may seek out the services of a UK-based solicitor or accountant to process their spoils and, importantly, confer legitimacy to their actions.
British professionals working in less regulated markets may encounter corruption or suspicious transactions when arranging business deals, or those in the UK could unwittingly handle the proceeds of illicit transactions. There are concerns that corrupt foreign public officials use the British housing, luxury goods and private education markets to launder stolen funds.
For example, after the fall of Gaddafi in 2011, questions were raised over his son’s £10m Hampstead house complete with swimming pool and cinema.
There are shocking case studies of corrupt deals that lose poor countries significant proportions of their annual spending budgets. The amount lost to the DRC in five suspicious mining deals, for example, was equivalent to their total health and education budget (pdf).
These transactions undermine the money that the UK government rightly spends on overseas development assistance. Fixing this problem and the broader issue of illicit financial flows would allow poorer countries to benefit from properly resourced public services and richer ones to spend less on aid.
As parliamentarians with an interest in international development, our job is to scrutinise the government’s approach to ending global poverty and this includes the global and international impact of corruption.
Last month a network of MPs and peers campaigning on international corruption came together with representatives of relevant industries to discuss how to prevent UK professionals becoming involved in illegitimate business.
The speakers highlighted the variety of challenges they face. For example, as UK firms expand into emerging economies with weaker anti-bribery and corruption legislation, British professionals are often required to uphold standards that go beyond local law and expectations.
Tanya Barman, head of ethics at the Chartered Institute of Management Accountants, pointed to industry codes of conduct that require staff to go above and beyond even UK law. By upholding such standards, British professionals have the opportunity not only to prevent corruption, but to act as role models for good business practices internationally.
To support staff, organisations must demonstrate a proactive commitment to anti-bribery and corruption embedded at all levels. This can be created through high-quality training and consistent internal communications.
Some businesses have also been vocal in supporting private sector transparency initiatives as a preventative measure. Greater transparency over procurement processes, promoting open contracting and requiring extractive firms to declare payments to governments all help create a climate where openness is the default.
Companies such as Base Titanium, BHP Billiton and Adaro have all stated their support for greater transparency, knowing it will allow them to spend less time dealing with the substantial risks associated with opaque business practices and protect their staff from the severe penalties that can occur when things go wrong.
Creating an environment within organisations that encourages and protects whistleblowers is also key. The Solicitors Regulatory Authority highlighted its own independent whistleblowing helpline that receives hundreds of calls each year, the reports from which are then used to target their investigative resources.
Suspicious Activity Reports (SAR) can likewise be important. These are alerts filed by company staff to alert law enforcement about the suspicious activity of a client or customer.
Yet for employees to raise concerns and for businesses to genuinely create the environments that encourage them to do so depends on the belief that escalating an issue will have real impact. Some argue that the UK’s relevant law enforcement agencies are insufficiently equipped both in terms of training and resources to take action effectively.
Somewhat surprisingly then, for a meeting hosted by parliamentarians in parliament, our conclusions were not about passing further legislation. As a group, MPs and peers often want to fix problems with new laws, but our discussions highlight the importance of enforcing those already in place.
We will continue to draw attention to this issue with policymakers and while we do, urge all British businesses to play their part in preventing corruption.
Kofi Annan’s Africa Progress Panel describes it as one of the single biggest obstacles to eradicating global poverty. UK professionals should take advantage of, and pride in, the important role they have in fighting this problem worldwide.
Catherine McKinnell MP and Anas Sarwar MP co-Chair the All-Party Parliamentary Group on Anti-Corruption. They tweet @APPGAntiCorrupt.
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