A motion has been tabled by Deputy Michael D. Higgins on the United Nations Convention on the Elimination of Corruption. The text of the motion was circulated to members last week and a briefing has been circulated for this meeting. This issue was discussed briefly at the meeting of the Sub-Committee on Development Co-operation last week, and the sub-committee agreed to call on the Government to ratify the convention as early as possible. I call on Deputy Michael D. Higgins to speak to the motion.
United Nations Convention on the Elimination of Corruption: Motion.
I move:
That the Foreign Affairs Committee urge the Irish Government to ratify the United Nations Convention on the Elimination of Corruption, to prepare the necessary legislation for its implementation at home, and to give support towards the implementation of the Convention as an international legal instrument as early as possible in view of the urgency that attaches to this matter and its central role in development policy.
I am grateful to the Chairman for enabling me to propose this motion, which I hope will receive the support of all members of the committee. I will briefly outline its background. Since I raised this issue initially the convention has been ratified. It passed its ratification hurdle on 15 September. It is interesting to note that there was such enthusiasm for the convention originally that in December 2003 the number of signatories was huge and less than two years later it has completed its ratification process. Signature is one step in the process but ratification makes the convention a legal instrument. The requirements in terms of ratification differ from one convention to another. In this case 30 ratifications were required. When Ecuador launched its papers on 15 September the convention had passed its ratification threshold. Three other countries have since ratified it and the number of signatories is increasing.
I tabled this motion in order for us to have a proper, fully lit investigation of corruption. From time to time we have discussed and heard stories about corruption in African countries. It seems that we did not spend sufficient time discussing the role of multinational corporations and the banking system. The fact that $700 million of money looted by the former Nigerian president, Sami Abacha, has been recovered by the Nigerian Government from Swiss banks with the help of the Swiss Government sets a very useful precedent. We are talking about billions when we talk about the recovery of funds moved abroad by corrupt leaders. As the briefing note suggests, one can have both petty corruption and corruption on a grand scale. I am anxious that in dealing with this issue, we avoid suggesting that undeveloped or non-Western countries are inherently disposed to corruption for cultural reasons.
I welcome the investigation of corruption by bodies such as Transparency International but the light has not been shone on the full house of corruption. Some African countries would have to go a long way to equal the fraud and corruption found in the Enron Corporation affair, which involved stealing from the pensions of poor workers who had worked all their lives hoping they would be secure in their old age. The sponsoring agency for this convention is the United Nations Office on Drugs and Crime, whichsteered through the convention.
My next comments may be somewhat controversial. Only two EU countries — France and Hungary — are numbered among the 33 countries which have ratified the convention to date. At their summits in Edinburgh and elsewhere, the G8 countries showed no reluctance in suggesting that governance reform was necessary, which was correct. However, these countries have not ratified the convention and have not accepted its discipline, which seriously erodes their credibility in speaking about ethical governance and reform. They should have ratified the convention. I received two letters recently from the Minister for Foreign Affairs, Deputy Dermot Ahern, in which he stated that he would like Ireland to ratify the convention as soon as possible and that he had written to the Minister for Justice, Equality and Law Reform asking him to prepare the necessary legislation. I wish to be scrupulously fair about this. The norm is that Ireland ratifies international agreements once domestic legislation is in place. This domestic legislation must be prepared by the Department of Justice, Equality and Law Reform.
This is an interesting convention in other regards. There will be a conference to review the progress of the convention's implementation one year after it became a legal instrument on 15 September 2005. Assistance for countries which wish to prepare legislation to put the convention into effect is also available. The convention will enable the repatriation of assets, which is a very good feature. The degree to which this feature could be made retroactive and recover money that was moved abroad in the past must be established in law. This is not as difficult as it seems in so far as the present benefit of money moved abroad would cover this point. An interesting feature of the convention in the electronic age is the requirement that where hot money flows between particular countries, the country that receives the money that is effectively being looted — often from the poorest people — has a duty of notification. There is an undertaking also that countries will co-operate with each other on this matter.
In its terms of ratification South Africa noted that it welcomed the convention because there had been different regional bodies which have been trying to deal with the issue of corruption — for example, it is part of the NEPAD — but South Africa put it into the mechanism for extradition from their country.
It is important that we ratify as quickly as possible. This will change the debate and the debate needs changing. Any time resources are removed from those who desperately need them in the areas of education, health, survival, prevention of disease such as malaria it is a scandal. It is equally wrong that some of the poorest countries are those with the highest resources and they have been plundered systematically and without recourse. For example, the international studies on corruption note that top of the list of corrupt activities are the building industry, construction and related skills. Second on the list are the extractive industries, and third are matters associated with banking and financial services. Ratification is an important instrument. When we will discuss the elimination of corruption we will discuss the elimination of all forms of corruption.
There have for some time been disciplines available other than this convention. For example, the mechanisms in place under the Council of Europe were disciplines of a moral kind that countries took upon themselves. However, it appears to me that the appropriate legal instrument is the United Nations convention. I am grateful for the opportunity to propose its adoption and if any member wishes to ask me any question about the motion, I would be pleased to answer it.
I commend Deputy Higgins on his initiative in moving this motion. I have some queries which I shall put to the Chair. Is this issue solely a matter of international corruption or does it take into account local and national corruption?
The latter.
It is interesting that it can be triggered for that purpose. I presume legislation is envisaged in this area when the convention is adopted. If we know some country is taking away money and doing wrong by its citizens how can Ireland trigger the convention, now translated into legislation, and what mechanism can be used to say we do not approve of what is happening in a particular country and that we want to invoke this convention to deal with it?
Perhaps we shall take a number of questions together.
I want to be clear about this issue. Can the convention deal with what might appear to be petty corruption on a particularly painful scale for the body of people whom it affects?
I represent Senator Bradford. Not only does he apologise but he told me he fully supports the motion, as I do. Like Senator O'Rourke, I highly commend Deputy Higgins for tabling the motion. In the past Ireland has been a good member of the United Nations. We have our own assets recovery agency, the CAB, for some years now. It behoves us to be leaders for all the reasons the Deputy has outlined. We should ratify this convention at the earliest possible date, as he has suggested. I note he has received a letter from the Minister for Foreign Affairs. The Department of Foreign Affairs has been advised that legislative changes are required. I express my full support and I urge the Government to introduce the necessary legislation at an early date.
I support Deputy Higgins's motion. I believe there will be all-party support for Ireland to ratify this very important convention on the elimination of corruption. As members of the committee know, the issue of corruption is of critical importance particularly in the context of our expanding aid budget, which has trebled since 1997 to more than €540 million this year. This figure will treble to €1.5 billion per annum by the time we reach the UN target in 2012. This raises the question of the use of that money. Frequently people, particularly those who oppose aid and want to criticise the expansion of aid budgets, ask why we throw money at the developing world when there is so much corruption. As it is such a potential hazard to overseas development endeavours and a threat to the political support for that work, it is important that developing and developed countries, like Ireland, respond to the challenge of corruption in all countries.
It is particularly important for us to work with the six African partner countries, to which we have committed to give long-term structural development and to ensure they in turn ratify this convention so that people can have confidence that such a huge amount of taxpayers' money is being properly accounted for. Those countries, where we have long-term relationships and budgetary support programmes, need adequate mechanisms of accountability and traceability. They need sufficient domestic rules against corruption, and the possibility of asset recovery and criminalisation. As part of our overseas development programme we should help those countries, with which we work so earnestly and with great respect, as part of their development challenge to put in place proper accounting mechanisms and criminalisation of corruption where and if it occurs.
I agree with Deputy Michael Higgins in identifying this as an important part of the development agenda. It should never be seen as a reason for us to row back our support for development internationally. Many of these countries are early democracies, frequently coming out of conflict and with very poor administrative systems. Theirs is unlike our history. When we got our independence an effective Civil Service was in operation which gave us a head start in our early democratisation. Many of the African countries in particular have very weak systems of governance, weak civil services and poorly paid officials — all of the weaknesses which would tend to allow corruption to thrive and prosper. It is part of the human condition in rich and poor countries that where money is involved and a buck is to be turned there is no end to the creativity of the human mind to make a profit regardless of whether it is against the law or not in the public interest.
The convention provides for sanctions by way of the domestic legislation on corruption. It is important that the legislation is tough and enforceable and imposes strong sanctions. Much of the economic activity of developing countries is dependent on donor assistance and it is therefore extremely important that strong penalties are imposed on those in the public service who are involved in corruption. Public officials who have become by corrupted by moneys from development assistance which generously flows in from the rich world should be subjected to the most rigorous prosecution and imprisonment.
In China, a corrupt official is liable to the death penalty because his or her crime is regarded as a crime against the people. In order to develop an anti-corruption regime in developing countries, the local governments must regard corruption as a crime against the people which also damages the public interest in their countries by undermining the international support system providing overseas development assistance. Corruption is not confined to developing countries. The experience of the tribunals and occurrences in our own administrative system show that corruption is also alive and well in a first world country such as Ireland.
I support Deputy Higgins's motion. The Department of Justice, Equality and Law Reform is considering what measures are required in domestic legislation to give effect to the ratification and implementation of the convention. Ireland should take its place with the leaders as it has done in the provision of international development assistance and should be equally assiduous in driving the agenda on anti-corruption. International debates on overseas development and letters to the newspapers question why the rich world, Ireland included, should support these multi-million euro programmes of assistance to developing countries when there is corruption in those countries. In my view, this is part of the development challenge. Poor governance and corruption is part and parcel of the development challenge. It should not be used as an excuse for rowing back but rather embraced as part of our development endeavours.
I support Deputy Higgins's motion. The issue of corruption highlights the importance of accountability, good governance and democracy. Deputy Higgins referred to the submission to the sub-committee last Wednesday by Transparency International. Its delegation gave an excellent account of its view on methods for dealing with corruption.
I stated at the sub-committee that this is not a new issue. Mr. John O'Shea of GOAL has written to Members about corruption in many African countries. Transparency International has an office in London and has recently opened an office in Dublin. It has received funding of €375,000 from the Department of Foreign Affairs. Ireland is allocating a lot of funding to NGOs to enable them examine this issue.
We should not forget that there are difficulties in the Third World and in developing countries. Last week I tried to find out from Transparency International what it does with its budget of €375,000 but it was not able to answer my question. It stated that the money was used to tackle corruption. I would like more information from organisations like Transparency International regarding how they spend their money. We must ensure that the money goes to its intended target in order that we can achieve real results in various countries. There is a danger that certain NGOs will engage in empire building rather than giving real help.
Deputy Quinn brought a letter from Mr. Colm Mealy to our attention. The letter is about Iraq and raises issues related to corruption there. Mr. Mealy maintains that people are paying authorities in Iraq in order to leave the country and that Christian Iraqis are paying protection money to stay there safely. I hope we can return to this issue, particularly given that under SaddamHussein, Christian Iraqis enjoyed relative religious freedom. The new Iraqi constitution, under Article 7, states that Islam is now the official religion of the state, which will cause huge difficulties for the Christian minority there. Minorities should have freedom and equality and while corruption is an important issue, there are other issues that are equally important. Deputy Higgins's motion and the legislation that will, I hope, follow are very welcome but there are many other issues that we must examine and I hope we can do so at a later date.
I support the motion from Deputy Michael D. Higgins. As has been mentioned, Transparency International came before this committee last week. One of the issues raised that frightened me was the role of the banking system in some European capitals, which is handling large amounts of so-called loot from Third World countries and facilitating the bleeding dry of countries that are in dire need of development. Transparency International estimates that approximately €200 billion from Third World countries is being laundered through the banking system in London alone. That is a frightening statistic, particularly when one considers the impact it must be having in poorer countries. It represents a haemorrhaging of resources from Third World countries.
Are governments doing enough to monitor the financial institutions in areas where this type of activity is taking place? We should look at this issue in more detail. We did not have the opportunity to do so last week but we should examine in more detail the role of the financial institutions in some European capitals in facilitating money laundering and the draining of resources from Third World countries.
Deputy O'Donnell raised the issue of the resources currently at the disposal of Development Cooperation Ireland, DCI. It appears that some staff will leave that organisation because they do not want to decentralise. This should be examined further. The committee should meet DCI representatives to ascertain the effect that decentralisation will have on its institutional memory, for example. I am fearful that many experts who work for the organisation will be forced out but may end up coming back as consultants because of a lack of internal expertise following decentralisation.
I would like this committee to examine closely the capabilities of DCI in managing a larger budget and its decentralisation programme and also the role of financial institutions, in places like London, in laundering money from Third World countries.
I would like to reply to Senator O'Rourke's question.
I also wish to say something but I understand Senator O'Rourke has to leave.
I do not have to go anywhere. I am ready to listen to the Chairman and Deputy Michael D. Higgins.
Deputy Michael D. Higgins can reply in a moment. It is clear that the approach here is unanimous. We are also in agreement that it is a very urgent matter. Ireland has set an example in the pursuit and tackling of both petty and grand corruption. For instance, we have ethics and asset recovery legislation that has been regarded as an example for other countries. We have also been active in the area of good governance and its promotion in our aid programmes. Development Cooperation Ireland, DCI, is to be congratulated on the work it is doing in that respect. We must not delay the ratification process as it is most urgent.
Each year, the Transparency International Forum sets out a list of countries. In my capacity as a representative of this committee in international fora I raised the issue that large volumes of grand theft money go into the banks in some of the countries represented at the top of the Transparency International Forum such as Switzerland, the United Kingdom and the United States. The pressure is increasing on these countries to come clean, be upfront and to complete ratification. Deputy Allen referred to £200 billion from the Third World that is in London-based financial institutions. The transparency table means nothing if one does not take this kind of money into consideration at the same time and go for the type of asset recovery practised here and that has proven to be successful.
Over 100 countries have signed the convention and indicated they would ratify it. I thank Deputy Michael D. Higgins for bringing forward this motion for consideration today. I wish the committee to inquire further into the matter and to invite the Department of Justice, Equality and Law Reform to come before it to outline the process and to clarify aspects of it. We must ensure this takes place fairly quickly. When we find out what the process requires, it may take another year to complete it. That is not good enough. We are deeply involved and we want to see it move ahead.
The committee may also take the step of inviting experts from the financial services industry to give us their view. The basic position is that this is where the big money goes. Let us have everything on the table so that the position is clear and there is real transparency in terms of the money. I again congratulate Deputy Michael D. Higgins on tabling this motion, which is unanimously supported by all parties and Independents. We look forward to his reply.
I am grateful to the Chairman and members for their support for the motion. It is constructed in a simple and straightforward way. It simply calls for ratification of the UN convention against corruption.
I wish to answer the very good questions which were raised. In December 2003 when the act of signature took place, the convention was signed by 129 countries, including Ireland. Before the act of signature there had been a number of different meetings, including regional meetings among countries. An amount of enthusiasm was built up. At the meeting in Mexico in December 2003, Kofi Annan said the convention could make a real difference to the quality of life of millions of people around the world. Mr. Costa who was heading the unit responsible for the convention's promotion in the United Nations stated: "A major breakthrough in the negotiations was the agreement reached on the return of assets obtained through corruption". This is included in the convention.
For the convention to become a legal instrument, it requires 30 ratifications. This was achieved on 15 September. Ecuador lodged its instrument of ratification in September and was followed by three other countries. However, when one considers the 33 countries involved, one will note they do not include the most powerful. In the course of preparation for signature in 2003, there was a meeting of the inspectors general in the United States. This is the equivalent of a meeting of all the comptrollers general — for example, it would include the president if it were the inspector general of social welfare in New York State. The inspectors general called unanimously for support of the convention. However, the United States has not ratified it and the only two countries in the European Union that have done so are France and Hungary.
Senator O'Rourke asked about the triggering mechanism. The first requirement following ratification is preparation of domestic legislation that is implementable but also compatible with other legislation. A conference is held within 12 months to prepare the different legal instruments in the different countries. One of the major aims in respect of a common element in the preparatory work for the legislation is the obligation to notify the relevant authorities when hot money or the proceeds of corruption arrive in one's country. Some countries were able to include reservations in 2003. Bearing in mind that the end point of the process is the International Court of Justice at The Hague, some countries included the reservation that both parties — that is, two countries, if involved — would have to agree to go to the court. These are the kinds of reservations included.
The most important aspect is that there is a big chapter in the convention on the issue of preventing corruption. It deals in part with the more or less lurid examples of corruption offered to us, in which the king may be having his 12th bride and 15th palace. I am aware of all such examples but we are not aware of the multinational companies bribing their way across Africa, nor are we aware of the large amount in tied aid made available by certain countries. Italy is an example in this regard. This is what I refer to when I speak of the light shining fully on the two sides of the relationship.
It is interesting that it is not just a question of the passing of legislation but also a question of assistance in implementation of the convention, including the setting up of anti-corruption agencies within each country. This is very valuable. Deputy O'Donnell should note that, in addition to giving project aid in Africa, one may also give budgetary aid. That is handled by a meeting of donors, often as frequently as once per month in some countries, including Uganda. If the committee of donors has not signed up and ratified the convention, its members are speaking with lesser authority than they might otherwise do. Our resolution should be forwarded through the Department of Foreign Affairs to the General Affairs Council involving Foreign Affairs Ministers of the European Union, who should be urged to sign.
One should bear in mind the issue of criminalisation with regard to the investment of funds. There are two other elements that will strike one immediately and which, together, may comprise the most important aspect of the convention. The first is the obligation to engage in international co-operation. Ratifying countries are required to co-operate with each other in ensuring transparency and providing information, including financial information and on financial flows. We note the level of compliance with this. The second concerns asset recovery. There is a significant example, namely, the recovery of $700 million after talks between the Nigerian and Swiss Governments. The moneys were moved from a poor country by former President Abacha.
I looked at the press release issued on 15 September when the magic figure of 30 ratifications was reached and noted that the statement made was very strong:
The United Nations cites corruption as a major impediment to development in poor countries and regions, as well as a chronic barrier to the realization of goals outlined in the Millennium Declaration. The principles articulated in the Millennium Convention require Member States to construct compatible and concrete legislation to counter corruption. States Parties are also required to establish criminal and other offences to cover a wide range of acts of corruption, including corruption in the private sector. The Convention is also remarkable in its call for significantly increased cooperation between States and mutual assistance, especially in the area of money laundering.
In that respect in many cases it establishes a collective responsibility to track stolen money, share intelligence, help rightful owners to recover assets and so forth. The sad aspect of the press release on 15 September was that while the 33 signatures included many countries, covering all continents, some of the largest and strongest countries have not yet ratified the convention. The purpose of this motion is to increase the pressure on them.
When we discuss development and so forth, it is not a matter of the undeveloped or developing world evolving to be as pure as us. It is a question of our capacity to see the corruption at the heart of our systems and the complicity of many developed countries in the worst aspects of corruption in the developing world.
We forget about the importance of a free press in the developing world because we have a very free press here. Some of us have had discussions in countries where the press is trying to establish itself. The free press has an important role in making the public aware of the problems and issues surrounding corruption.
Question put and agreed to.
We will send a copy of the motion to the Minister for Foreign Affairs and to the Minister for Justice, Equality and Law Reform. We will arrange a meeting with the officials in the Department of Justice, Equality and Law Reform to pursue the matter in greater detail. We will also arrange a meeting with the financial services representatives, including the National Treasury Management Agency, who should be able to help us in this matter. We will also prepare a draft report on the issue.
We will need also to consult the Attorney General's office.
Will we need to consult it in respect of the legislation?
Yes.
The Attorney General's office has a file——
The Department of Justice, Equality and Law Reform must do that in providing us with the information.
Very well.
Thank you.
The joint committee went into private session at 2.45 p.m. and adjourned at 2.50 p.m. until 3 p.m. on Tuesday, 25 October 2005.