Governance and Corruption – Tearfund's Policy Blog

October 1, 2013 by Melissa Lawson

by Rachel Dickinson

Poverty is no secret. It happens across the world and it robs people of their hope and dignity. But what remains secret are the illicit deals and hidden transactions that deprive poor communities of the money they need to tackle poverty. Tearfund is launching our new Secret’s Out campaign, calling on the Prime Minister to expose the scandal of corruption as we approach the Australian G20 Summit.

In 2010, developing nations lost a staggering £555 billion because of illicit money flows – money stolen through corruption, smuggling, trade mispricing, money laundering and tax evasion. Consistently we hear from the communities that we work with the pervasive and crippling effects of corruption, and unless this everyday reality of corruption is challenged, the poorest communities will remain trapped in poverty.

The good news is that already we’re seeing astounding progress in the fight against corruption. Tearfund’s Unearth the Truth campaign launched in June 2011 set about implementing European transparency laws in the extractive industries. Africa has an astonishing amount of natural resources, whilst being classified as the most economically underdeveloped continent.

Following two years of campaigning by Tearfund staff and supporters, on 12 June 2013, the European Union passed new laws demanding European extractive companies to publish the payments they make for oil, gas and precious minerals in the countries where they operate. The laws apply to all extractive companies registered in Europe and will require disclosure of all payments over 100,000 euros on a project-by-project basis. With this new information available, more communities will be able to see what their government is receiving and hold them to account.

The EU legislation and the similar US Dodd-Frank regulations passed last August, will now cover approximately two thirds of all listed oil, gas and mining companies worldwide. This is a major achievement, but there is still much to be done. G20 countries like Australia, South Africa and Brazil, which are home to large extractive companies, are not yet covered by transparency legislation. That’s why Tearfund’s Secret’s Out campaign is working to ensure G20 countries follow Europe in committing to more extractive industry transparency, so that communities will be able to benefit further from the vast mineral wealth beneath their feet.

And in order to challenge corruption, citizens not only need to see what money is coming into their communities, but keep a check of how their leaders are spending it. Secret’s Out is also calling on G20 nations to agree higher standards of budget transparency, making sure they set the highest standards by providing extensive accessible and understandable budget information.

Giving citizens and churches knowledge about key financial decisions being made in their countries empowers them to get involved in the debate about how revenues are being spent,  whether on schools, hospitals, or other issues that matter to their communities.  Budget monitoring schemes such as the Public Expenditure Tracking (PETS) committee in Mpamantwa village, Tanzania demonstrates how greater budget information is transforming communities – from helping to increase the size of the local school, to ensuring  availability of medicines in the local health clinic.

Thanks to the work of the PETS committee, the local school in Mpamantwa Village has recently been fitted with three new classrooms.

It is our hope that the achievements like those of the PETS committee become not rare case studies but everyday anecdotes. Please join us as we approach the G20 Summit to make sure the illicit transactions that trap people in poverty no longer remain a secret.

May 10, 2013 by Melissa Lawson

Today made me think that perhaps we’re on the winning team after all – on the ‘cusp of a wave’ of transparency.  As an advocate, when you see a world leader call for action on an issue that you are passionate about, it does give you hope.

Kofi Annan today urged the world to ‘stop the plunder’ of Africa’s natural resources.  Watch this video of Kofi Annan speaking to find out why this is crucial – and why the G8 and G20 need to take action.

There is reason for optimism.  The forthcoming EU legislation, expected next month, would be a real success.  The US Dodd-Frank legislation and the forthcoming EU law would mean that approximately two-thirds of the world’s oil, gas and mining firms would be required to publish the payments they make on a project-by-project basis, enabling citizens from resource-rich countries to hold their leaders to account for its expenditure.

But we need the world to work together on this.  We need companies to be the most transparent they can be – to publish payments and contracts.   We need Governments to publish budgets – including revenues and expenditures, so that citizens can see where the money is spent.   But we also need civil society and citizens to ‘follow the money’, to ensure that it is used well – on hospitals, schools and roads.  Tearfund’s experience in Tanzania shows that tracking the use of budgets at this local level, can, and does make a difference.

Perhaps if there has ever been a case for us to ‘all be in this together’ it is for this – to stop the scourge of corruption and to ensure that revenues from natural resources aren’t wasted.

As Kofi Annan highlighted, the G8 next month is a great opportunity to continue in the direction of transparency.  G8 leaders need to commit to:

–          A global standard on transparency in the extractives sector – to commit to implement domestic legislation requiring extractive companies to publish what they pay to foreign governments.

–          Support civil society groups and infomediaries (such as parliaments, audit institutions, the media and civil society organisations) to interpret and use the data, in order that there is greater accountability

–           Reach the highest standards of budget transparency, to join the Open Government Partnership and to support other countries to publish budgets in a usable and understandable way.

Transparency throughout the natural resource process – from contracts, payments, revenues to budget expenditure, could enable the truth about corruption to finally be unearthed.