South Sudan commits to joining resource transparency group

South Sudanese President Salva Kiir has said that his country is committed to membership of the Extractive Industries Transparency Initiative, the global watchdog which promotes good governance of natural resource industries.

Kiir made his declaration on 14th December, at the International Engagement Conference for South Sudan in Washington. His speech focused on the need for good governance in South Sudan, noting the recent passage of a Financial Management and Accountability Act by the South Sudanese parliament. He also said that he had issued a decree “that all senior government officials should declare their resources by the end of January 2012; in absence of which they will be investigated”.

Kiir's stated commitment to good governance is intended to reassure foreign investors, who will be critical to helping kickstart growth in the world's youngest country. Aside from oil, South Sudan has almost no resources and is among the poorest countries of the world. On most human development indicators it is near the bottom of the global rankings.

Tackling corruption and ensuring responsible oversight of the country's one plentiful resource will be essential to propping up development in the years ahead. Graft is widely considered to be entrenched in the government, with funds regularly siphoned off for urgent humanitarian projects. The South Sudan Anti-Corruption Commission has made almost no inroads against graft.

President Kiir's regular public condemnation of corruption may not be enough to stem the tide, but it does raise awareness among the South Sudanese people and – just as importantly – convinces his international backers that he is serious about presiding over a clean administration.

His government's steps towards new laws and mechanisms to promote good governance – such as joining the EITI- will be welcomed. The problem, however, is not the laws and regulations themselves but the political will needed to enforce them. It remains to be seen if South Sudan's weak government is able to enforce its president's tough stance against corruption.

Sources: Voice of America, Sudan Tribune

Siemens executives charged in corruption case

Six executives from Siemens have been charged in the US with conspiring to bribe Argentinian officials with $100 million, three years after the company paid out $1.6 billion to settle claims that it sought to win contracts overseas by paying bribes.

The executives have been charged in separate investigations by the Justice Department and the Securities and Exchange Commission. The Justice Department's Assistant Attorney General Lanny Breuer said that the “allegations in this indictment reflect a stunning level of deception and corruption”. As well as breaching the Foreign Corrupt Practices Act, the allegations include money laundering and conspiracy to commit wire fraud.

The alleged scheme began in the late 1990s in an attempt to win a $1 billion contract with the Argentine government. Siemens officials set up a series of shell companies and fake contracts to hide the bribes to Argentine officials.

Despite the allegations, and the after-effects of the 2008 settlement, the company appears be on track to increase its US business. According to an investigation by the Wall Street Journal the company has made significant progress in building up both business and relationships in Washington. Last year, the firm hired senior Democratic operative Camille Johnston as US corporate affairs chief, which has opened even more doors.

Whether or not the new investigation damages the company's US business remains to be seen: given its growing weight as a major player in America, it seems unlikely.

Sources: Washington Post, Wall Street Journal

UK government urged to clamp down on corruption by banks and companies

The Bond group, the UK membership body for international development organisations, has called on the British government to clamp down on UK companies and financial institutions which fuel corruption in the developing world.

Releasing a new report on 9th December – world anti-corruption day – the group said that, although the UK had a strong legal framework, failings in “enforcing bribery laws and tackling dirty money has devastating effects on developing countries, undermining good governance and exacerbating poverty”.

There has been progress, according to the Bond group, towards complying with the UN Convention Against Corruption, but there are still several areas of concern. Firstly, the guidance issued by the Ministry of Justice on the UK Bribery Act is unclear, which creates the potential for confusion and loopholes.

Secondly, the Serious Fraud Office, the UK's leading anti-corruption agency, lacks enough resources to fully deter companies from bribing foreign officials. Thirdly, many banks (75 per cent according to the Financial Services Authority) do not know the ultimate source of their funds for high-risk customers, meaning that they may be profiting from corrupt funds.

Fourthly, the UK government has failed to pressure its overseas territories and dependencies into releasing company registries, allowing them to continue operating as havens for corrupt or shady enterprises.

The report does not propose that the government should reinvent the wheel, simply that more resources should be devoted to enforcing the Bribery Act, and more effort spent on enforcing the existing anti-corruption laws.

The Bond group also calls on the government to set up “a transparent cross-government anti-corruption strategy”, which would be chaired by the UK Anti-Corruption Champion, Ken Clarke MP.

Sources: Bond Group, The Guardian

Equatorial Guinea vote highlights US corruption probe

A flawed constitutional referendum in Equatorial Guinea has strengthened the country's long-serving ruler and drawn attention to a US anti-corruption probe into his son.

The referendum, which human rights groups said was marked by fraud, removed the maximum age limit for the president, allowing ageing President Teodoro Obiang Nguema to stay in power after he turns 75 in six years' time. It also creates a new post of vice president, which his sonTeodorin Obiang Mangue is expected to fill in anticipation of an eventual dynastic succession.

The new focus on the younger Obiang has refocused attention on an announcement in October that the US Justice Department was investigating him for corruption and money laundering in the US. He is believed to have amassed a fortune of over US$100 million, despite being paid US$81,000 a year as Forestry and Agriculture Minister.

The Justice Department is seeking to seize a US$30 million mansion which Obiang owns in Malibu, as well as a private jet, a collection of luxury cars and a collection of Michael Jackson memorabilia worth US$2 million.

The cases are part of the Kleptocracy Asset Recovery Initiative, a Justice Department scheme which seizes corrupt foreign assets and corrupt funds which have been laundered in the US. At the beginning of December, Obiang began fighting the charges.

Equatorial Guinea has had a poor reputation for corruption for some time. Despite substantial oil riches, much of the population remains mired in poverty, with poor infrastructure and services, while a small ruling elite enriches itself. In 2004, the US Securities and Exchange Commission launched a probe into five US oil companies which were accused of bribing government officials in Equatorial Guinea, although the probe was inconclusive.

The legal struggle to reclaim Obiang's assets is anticipated to take a long time, and he is likely to fight the proceedings at every step. In any case, if he becomes vice-president he may decide to start spending more time back in Equatorial Guinea.

Sources: Reuters, Associated Press, AllAfrica

New Transparency International report reveals entrenched corruption

Global watchdog Transparency International has just released its latest Corruption Perceptions Index (CPI), an annual poll which tracks perceived levels of graft in countries around the world – and the overall picture remains bleak.

The CPI ranks countries from 1 to 10, with 1 being the most corrupt and 10 being the least: two thirds of countries in this year's Index ranked under 5. Perennial leaders New Zealand, Finland and Denmark are at the top of the table, with Somalia and (ranked for the first time) North Korea at the very bottom – both score just 1.0.

One trend that stands out this year, according to Transparency International, is the correlation between perceived corruption and the wave of protests that has swept the world in 2011. Most Arab Spring states fare poorly, with scores under 4 (Egypt is 112th out of 182 and Libya is 168th).

Meanwhile in Europe, the states which rank lowest are those which have seen protests and changes of government. Italy, for example, ranks 69th – below states including Macedonia, Georgia, and Slovakia.

There is no direct correlation between wealth and transparency: states like Russia ranking below Nigeria, Syria, and Eritrea, whilst Botswana beats Taiwan, Israel and South Korea. In a press release, Transparency said that high-scoring countries indicated that “over time efforts to improve transparency can, if sustained, be successful and benefit their people”.

Although the CPI is based on perceptions rather than any objective indicator, it is a useful tool for activists and civil society groups seeking to tackle corruption in their countries.

Sources: The Guardian, Transparency International