Brisbane’s trillion dollar question – Tearfund's Policy Blog

November 12, 2014 by Melissa Lawson

On the eve of the G20 Melissa Lawson updates campaigners on what we have achieved and what we might see on transparency.

Developing countries lose approximately $1 trillion each year in illicit financial flows – that’s money lost to crime, tax evasion, corruption and other other illicit activity etc.¹ That’s seven times what is spent in international aid and is enough to:

$1 trillion could buy every person in Brisbane and Adelaide a new Rolls Royce. Photo: Lukasdesign

  • buy every person in Brisbane and Adelaide a Rolls Royce, or
  • provide basic education for children in low-income countries for the next 17 years,² or
  • contain the ebola crisis at least 1000 times over (based on calculations by the UN Office for Coordination of Humanitarian Affairs).³

But this weekend, some of this might change.  Leaders of the world’s largest economies, making up 75% of global trade will be meeting at the G20 Summit in Brisbane – and we hope will agree actions to curb illicit financial flows.

Tearfund and others round the world have been part of Micah Challenge’s Exposed campaign calling on the G20 to address corruption – particularly through increasing transparency in the extractive sector.  The G20 must keep up the momentum towards transparency and build on the progress achieved at last year’s G8.  This is why Tearfund supporters have sent 25,000 messages to Prime Minister Cameron, urging him to use this his influence to champion anti-corruption issues.

So what are our chances of success?

We understand that the G20 Anti-Corruption Working Group will issue a new Action Plan – something we called for earlier this year.  That’s a very mini-success.  Reportedly, extractive transparency has been discussed within this context and has brought much controversy.

Outside of the G20 discussions there have been other steps towards a global standard for extractive industry transparency.  Canada has made progress on mandatory reporting through tabling legislation, EU member states are transposing the Accounting and Transparency Directives into national law and the Australian Parliament will be discussing the issue.  This harbours well for the closing of the G20 negotiations, but agreements need to be solidified and other key countries such as Brazil and South Africa need to hold public discussions on extractive transparency.

Whether the G20 will collectively agree concrete actions on extractive transparency is still to be seen – we await the publishing of the new G20 Anti-Corruption Action plan at the weekend.

It appears there will be G20 progress on beneficial ownership transparency – although some countries are reportedly blocking agreements.  That said, to tackle corruption we need G20 leaders to agree for registries of beneficial ownership to be available to the public so the likes of Obiang can’t use complicated company structures to hide their wealth.

But these transparency mechanisms are amongst a long shopping list of challenges that will be discussed in Brisbane this weekend – from gender, tax, to climate change and I hope, ebola.  Let’s not be naive – international negotiations in a multi-polar world require determination, wrestling and strong leadership from the G20 President. I just hope that Tony Abbott has what it takes to stop some of the trillion dollars disappearing.

1. Global Financial Integrity Report (December 2013) Illicit Financial Flows from Developing Countries: 2002-2011