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Africa: Corruption

My Lords, I, too, am grateful to the noble Lord, Lord Chidgey, for securing today’s debate and giving us an opportunity to discuss the very fine report from the Africa All-Party Parliamentary Group, The Other Side of the Coin. I am delighted that it has been so well received. In fact, this evening feels rather like a meeting of the AAPPG. The report of the Commission for Africa began with an Igbo proverb:"““Not to know is bad. Not to wish to know is worse””." In Africa, in international institutions, and certainly in the UK, we know there is a huge global problem relating to corruption. We know that, and I quote my right honourable friend the Prime Minister,"““The corrosive effect of corruption undermines all efforts to improve governance and foster development””." Most importantly, this Government accept their responsibility to support African Governments in their battle against corruption. I must refute the allegation made by the noble Baroness, Lady Rawlings, about the lack of political will. The Government have shown extraordinary political will in their fight for Africa and against corruption in Africa. It is also good to hear reports from the noble Lord, Lord St John of Bletso, that the tide is turning in some countries in Africa. However, I tend to agree with the noble Baroness, Lady Rawlings, that the situation is extremely depressing. The UK took a lead in ensuring that addressing poverty in Africa was a priority during its G8 presidency, and that G8 leaders made commitments to address corruption at the Gleneagles summit. As noble Lords have clearly demonstrated, the consequences of international and domestic corruption for poor people in poor countries are devastating. The costs to exchequers are extraordinary, as outlined by the noble Lord, Lord Chidgey, as are the human costs, but it also creates a blight on investment and public sector development and holds back economic growth. That is why DfID supports a wide range of governance reforms to prevent, detect and take action against corruption. It is why in his speech, ““Development Beyond Aid””, at Chatham House on 23 February 2006, my right honourable colleague the Secretary of State for International Development highlighted global corruption as one of the key themes of the upcoming White Paper on international development. The recommendations of the AAPPG fall into three broad categories: those where the Government are already working towards implementation; those where action plans are currently being developed and will be announced in the near future; and those where significant further work is required to determine how best to address the issues. The vast majority of the recommendations fall into the first two categories, and we warmly welcome the way in which the report raises awareness and provides an impetus for action. Sadly, it is not possible in this all-too-short debate to comment on all recommendations in detail, so I will concentrate on the six headline recommendations and answer as many questions as possible. The suggestion of the noble Lord, Lord Avebury, that there should be a longer debate is a matter for the usual channels, but I would support that. The first recommendation calls on the Government rigorously to enforce existing laws and sanctions against international bribery and money laundering. We have strengthened our enforcement framework and, I assure noble Lords, that we are firmly committed to enforcing those laws. The Serious Fraud Office now leads on vetting, monitoring and investigating allegations of overseas bribery. The Crown Prosecution Service has been restructured and now includes a fraud unit, staffed by specialist prosecutors, which is likely to be in charge of future files involving overseas bribery. Like the noble Baroness, Lady Northover, we agree that we need to do more, but I stress that currently there are cases moving through the long and complex legal processes. For example, Joshua Dariye, the governor of Plateau State in Nigeria, had his UK-based assets seized in December last year. We are making efforts to return them to Nigeria and his appeal is in progress. Indeed, there are 35 overseas bribery allegations currently being vetted to see if there is sufficient evidence to open a case and there are 13 active investigations in England and Wales and one in Scotland. The second headline recommendation is to bring a new anti-corruption Bill before Parliament before the end of this year. The Government agree that the law of bribery is in need of reform. That is why, in December last year, we issued a consultation paper setting out options for reform. Most of the respondents seem to have taken differing views, but shortly we hope to publish a response covering all the comments received. Bribery is a hard crime to pin down in a way that balances the interests of all stakeholders, as previous attempts to reform the law have shown. The AAPPG’s views will be taken fully into account along with the views of other stakeholders, and of course the views expressed by noble Lords this evening. The noble Lord, Lord Chidgey, and my noble friend Lady Whitaker mentioned the Bill recently introduced by my honourable friend Hugh Bayley in another place. Of course, that is being studied closely and it will be taken account of in the Bill to which the Government remain committed. These are complex issues and we have to get them right; we have to ensure that the Bill is workable in the courts, which is why the process is perhaps taking longer than many noble Lords would wish. I am grateful for the offer, or the suggestion, from the noble Lord, Lord Chidgey, that he should table a Private Member’s Bill in the Lords. I can assure noble Lords that the Government are committed to introducing a Bill. They are carefully considering a plethora of views that have been presented. We want to continue building a consensus around a new Bill. However, ultimately it will be up to the noble Lord whether he brings forward his own Bill. The third recommendation calls on the Government to implement the third European Union money laundering directive before December 2007. The Government are confident that we will implement the directive by December 2007, and a consultation document on our proposed implementation will be published shortly. The directive provides for a co-ordinated EU-wide approach to tackling money laundering and terrorist financing, and requires banks to perform enhanced due diligence for non-domestic politically exposed persons. I am pleased to report that UK banks are already taking steps to implement these requirements. My noble friend Lord Lea spoke of the international framework. As the report made clear, this is a global problem which requires a global response. That is why we are working within the context of the G8 and OECD. The context works. For years, we advocated in the OECD development assistance committee that development agencies must influence their governments, and that is now widely accepted. A couple of weeks ago, in the same committee, we took a strong lead in advocating that all donors try to influence their governments to address supply-side corruption, and we trust that that will work in the same way. In relation to international tax treaties, the OECD has recently started an initiative on them, and I will seek to find out more information for my noble friend. The noble Lord, Lord Avebury, suggested that we should work with the African Union so that it can provide assistance and guidance to those African countries that wish to sign up to and implement the African Union convention against corruption and the UN convention. That seems to be a very sensible idea, and I will certainly take it back to the department. However, it might also be something that we should discuss with colleagues in the European Parliament in view of the fact that the AU receives substantial funding from the EU. The fourth recommendation was that we,"““Ensure that Crown Dependencies and Overseas Territories deal with corruption . . . as robustly as the UK””," is problematic in tone. That is because it does not fully recognise the complexity of the constitutional arrangements between the UK and those territories. The UK overseas territories are aware of the threats posed by money laundering and corruption and the risks they carry for the reputation of their economies. The Government will continue to encourage them to counter those threats and ensure that they have robust legislation in place, in particular on financial regulations, as well as adequate enforcement capacity, and to put relevant international agreements into force. Where possible, we will offer practical help. The fifth recommendation calls for Government to,"““Report to Parliament annually on international development spending””." As noble Lords will be aware, Tom Clarke’s Bill, which I am delighted to say has completed its passage through the other place, will require us to report not only on aid, but also on how other issues affect development. I look forward to the Bill’s Second Reading on 29 June when it will be introduced by my noble friend Lady Whitaker. The sixth recommendation calls for the appointment of an anti-corruption champion. We fully agree that there is a need to improve policy coherence between the large number of government departments and agencies whose work is associated with international anti-corruption and money laundering. We further agree that there should be clear responsibility for co-ordinating policy coherence and implementation across Whitehall. The strategy for realising this recommendation is currently being discussed by Ministers, but I am optimistic. Several noble Lords quite rightly raised the issue of China. China has ratified the UN Convention Against Corruption and that, together with domestic auditing reforms, shows that China is interested in discussing good governance. The Government are committed to joining international partners in a dialogue on corruption. In relation to the Company Law Reform Bill, I will respond in writing and send a copy of my letter to all noble Lords who have participated in this debate. The matter of Nigeria and the Abacha money was raised by my noble friend Lord Lea. No money has been returned to Nigeria from the UK, although some assets are currently restrained under a civil order. It is unlikely that significant funds remain here. Evidence supports the view that the UK was used as a transit route, rather than as a deposit, for most of the money. The UK stands ready to assist any international partner, including Nigeria, with requests for mutual legal assistance in accordance with our domestic law and in line with our international obligations. There is a UK initiative to provide mutual legal assistance training to Nigerian personnel to assist them in making requests, and the Home Office played a leading role in a recent training seminar in Abuja. In relation to the case of a solicitor alleged to have carried out a corrupt act in Nigeria, it would not be appropriate for me to comment on individual cases. The Government’s consultation paper of December 2005 made a proposal to enhance the powers of the Serious Fraud Office to assist it in investigating allegations of bribery overseas so that they can be cleared up. The AAPPG is to be warmly congratulated on the publication of The Other Side of the Coin. It draws attention to the scale of the challenges, makes a set of complex issues accessible and will act as a catalyst for further change. The Government’s response to the report will of course be published in the near future. I regret that it has taken some time, but, as the noble Lord, Lord Chidgey, acknowledged it is a cross-department responsibility. The Other Side of the Coin has already been influential in shaping the global corruption aspects of the White Paper. I am confident that many of the concerns expressed today will be alleviated when the full extent of the Government’s commitment on those issues is made known. Like the AAPPG and noble Lords who have participated today, the Government remain committed to Africa and to tackling corruption, which is a critical obstacle to its development.