How can we step up global action to expose, punish and drive out corruption?

The Anti-Corruption Summit hosted by Prime Minister David Cameron on 12 May 2016 (“the Summit”) provided a forum to discuss this question and sought to galvanise a global response to tackling corruption. The Summit brought together world leaders, business and civil society to discuss ways to:

  1. Expose corruption;
  2. Punish the corrupt and support those who have suffered from corruption;
  3. Drive out the culture of corruption.

The result, a communiqué[1] detailing agreed practical steps to tackle global corruption. This article seeks to summarise this communiqué and discusses how private prosecutions in England & Wales assist in tackling corruption.

Exposing corruption

During a BBC interview[2] discussing global corruption, Kate McMahon, one of the founding partners of Edmonds Marshall McMahon, highlighted the need for “making owners more identifiable and more accountable” of UK and foreign companies if global corruption is to be tackled. Similarly, transparency of beneficial ownership was considered essential during the Summit to expose corruption along with:

  1. implementing the Financial Action Task Force recommendations on Transparency and Beneficial Ownership of Legal Persons and Arrangements;
  2. enabling agencies to have full and effective access to accurate beneficial ownership information;
  3. ensuring a level playing field for foreign and domestic companies to provide beneficial ownership information;
  4. developing ways to improve implementation of international standards on transparency;
  5. creating stronger partnerships between governments, regulators, law enforcement, financial intelligence units and businesses to improve information sharing domestically and across borders;
  6. effective supervision and regulation of legal, accounting, property, trust and company services sectors by countries;
  7. identifying emerging activities or sectors that may be vulnerable to facilitating or laundering proceeds of corruption;
  8. making public contracting and government budgets fair, accountable, open and transparent to prevent and expose the theft and misuse of taxpayers’ money;
  9. strengthening fiscal transparency and undertaking periodic assessment of fiscal transparency;
  10. commitments to making it easier for people to report suspected acts of corruption and greater protection for whistle-blowers;
  11. increasing international transparency on tax to deter tax evasion and other tax crimes;
  12. assisting developing countries to strengthen their tax systems;
  13. supporting international efforts to tackle individuals and corporations that facilitate tax evasion.

Unless corruption is exposed it cannot be prosecuted. Transparency of beneficial ownership assists in identifying the corrupt, but is limited. Corrupt individuals can still hide by having friends, associates or family members act as beneficial owners on their behalf. Consequently, a link between the corrupt and the proxy beneficial owner needs to be established if the real perpetrator is to be revealed. Private prosecutions can assist in this respect.

A private prosecution is a “criminal prosecution pursued by a private person or body and not by a statutory prosecuting authority” (Edmonds & Jugnarain, 2016).[3] In the UK, anyone can bring a private prosecution. Private prosecutions are not susceptible to government budget and resources cuts and therefore, have the necessary means and expertise to dedicate time to establishing links between the corrupt and proxy beneficial owner. Thus, increasing the likelihood of the corrupt being exposed and prosecuted in instances where a proxy beneficial owner is used.

Punishing the perpetrator and supporting those who have suffered from corruption

The corrupt should be brought to justice. To this end the communiqué provides:

  1. extradition and MLA provisions of UNCAC should be effectively applied;
  2. anti-corruption laws should be effectively enforced to enable countries to work together and pursue the corrupt, prosecute and punish them as well as confiscate and return stolen assets;
  3. information sharing between law enforcement agencies, anti-corruption bodies, integrity officers of international organisations and prosecutors should be strengthened;
  4. developing countries’ abilities to investigate, prosecute and collaborate with international partners should be supported;
  5. an International Anti-Corruption Coordination Centre to work closely with relevant international and national organisations to support countries that have suffered from grand corruption is welcomed;
  6. corrupt bidders should be excluded from participating in public procurement tenders;
  7. legal frameworks for asset recovery should be strengthened in order to better identify, seize, confiscate and return proceeds of corruption;
  8. timely, coordinated and appropriate technical assistance and expertise on asset recovery should be provided to countries in need of urgent support;
  9. efforts to strengthen international cooperation on transparent and accountable management of frozen and returned assets are welcomed;
  10. the corrupt should be prevented from conducting business and travelling internationally; reducing the enjoyment of their ill-gotten gains;
  11. victims of corruption should be supported by compensation payments and financial settlements.

To tackle global corruption, an individual and the wider community must be deterred from committing the offence. Offenders are deterred when the probability of apprehension is increased and the rewards of crime are decreased (Nagin & Paternoster, 1993)[4] or when sanctions are likely, sufficiently harsh and swiftly administered (Worrell et al., 2014).[5] Accordingly, increasing severity of punishment, alone, is unlikely to reduce corruption. Consideration, therefore, should be given to increasing the number of prosecutions and confiscation proceedings commenced against the corrupt.

State investigation agencies typically focus on significant and major corruption cases. As a result, not all instances of corruption (even those that are sometimes significant) are investigated and prosecuted (decreasing the probability of apprehension). Private prosecutions fill this gap. Individuals, companies and charities are empowered by s 6(1) of the Prosecution of Offences Act 1985 to prosecute a person who has committed a criminal offence.[6] Accordingly, in principle, all known acts of corruption could be prosecuted (thereby, increasing the probability of apprehension). Private prosecutions, therefore, play an important role in tackling global corruption and facilitating general deterrence.

Driving out the culture of corruption

“Corruption is a global phenomenon” (Cameron, 2016).[7] It is found in state institutions (such as the judiciary and security forces), sports organisations and everyday business transactions. No state, business or individual is immune. The communiqué posits, however, that the culture of corruption can be driven out by:

  1. promoting integrity by encouraging long-term institutional partnerships;
  2. promoting public integrity and improving public sector management, private sector standards and incentives and cooperation on training and education;
  3. strengthening and improving governance and transparency of sports organisations;
  4. developing codes of best practice and accountability frameworks for individual institutions and developing international legal frameworks;
  5. continuing to build security and justice institutions that are resistant to the threat of corruption;
  6. leveraging existing technologies and creating new ones to expose abuse and improve prevention and law enforcement capabilities;
  7. encouraging and supporting international organisations to increase their focus on tackling corruption;
  8. improving coordination and information sharing across OECD bodies by establishing a member-steered anti-corruption and integrity platform.

Private prosecutions are independent of the state and can, therefore, expose and prosecute instances of police and justice institution corruption. Private prosecutions provide a person with the means to effect cultural change within these institutions by drawing society’s attention to corrupt acts. This in turn assists with “driving out the culture of corruption”.

Private prosecution, thus, is a powerful anti-corruption tool as it has the potential to significantly aid in exposing corruption, punishing the perpetrators of corruption and driving out the corruption culture.