How to expose the corrupt Peter Eigen
I’m going to speak about corruption but
I would like to drug suppose two
different things one is the large global
economy the large globalized economy and
the other one is a small and very
limited capacity of our traditional
governments and their international
institutions to govern to shape this
economy because it is this this this
asymmetry which creates basically
failing governance failing governance in
many areas in the area of corruption in
the area of destruction of the
environment in the area of rotation of
women and children in the area of
climate change in all the areas in which
we really need a capacity to reintroduce
the primacy of politics into the economy
which is operating in a in a worldwide
arena and I think corruption and the
fight against corruption and the impact
of corruption it’s probably one of the
most interesting ways to illustrate what
I mean with this failure of governance
let me talk about my own experience I
used to work as the director of the
World Bank office in Nairobi for for
East Africa at that time I noticed that
corruption that brand corruption there
systemic corruption was undermining
everything we were trying to do and
therefore I began to not only try to
protect the work of the World Bank our
own projects our own programs against
corruption but in general I thought we
need a system to protect the people in
this part of the world from the ravages
of corruption and as soon as I started
this work
I received a memorandum from the World
Bank from the legal department first in
which they said you are not allowed to
do this you are meddling in the internal
affairs of our partner countries this is
forbidden by the charter of the World
Bank so I want you to stop doing this
in the mean time I was chairing donor
meetings for instance in which the
various donors and many of them like to
be in Nairobi it is true it is one of
the unsafest cities of the world but
they like to be there because the other
cities are even less comfortable and in
these donor meetings I noticed that many
of the worst projects which were put
forward by our clients by the
governments by promoters many often
representing the suppliers from the
north that the worst projects we are
realized first let me give you an
example a huge power project 300 million
dollars to be built smack into one of
the most vulnerable and one of those
beautiful areas of western Kenya and we
all noticed immediately that this
project had no economic benefits it had
no clients nobody would buy the
electricity there nobody was interested
in irrigation projects to the contrary
we knew that this project will destroy
the environment that would destroy
riparian forests which were the basis
for the survival of nomadic groups
Samburu and the Turkana in this area so
everybody knew this is a not a useless
project this is an absolutely damaging a
terrible project not to speak about
future indebtedness of the country for
these hundreds of millions of dollars
and the siphoning off of the scarce
resources of the economy from much more
important activities like schools like
hospitals and so on and yet we all
rejected this project none of the donors
was willing to have their name connected
with
and it was the first project to be
implemented the good projects which we
as donor community will take under our
wings
they took years we had do many studies
and very often they didn’t succeed but
he’s bad products which we are
absolutely damaging for the economy for
many generations for the environment for
thousands of families who had to be
resettled they were suddenly put
together by consortia
of banks of supplier agencies of
insurance agencies like in Germany
aramis and so on and they came back very
very quickly driven by an unholy
alliance between the powerful elites in
the countries there and the suppliers
from the north
now these suppliers were our big
companies three we are the actors of
this global market which I mentioned in
the beginning they were the Simmons’s of
this world coming from France from the
UK from Japan from Canada from Germany
and they were systematically driven by
systematic large-scale corruption and
you are not talking about fifty thousand
dollars here or a hundred thousand
dollars there over 1 million dollars
there no we are talking about 10 million
20 million dollars on the Swiss bank
accounts on the bank accounts of
Liechtenstein of the president’s
ministers the high officials in the
parastatal sectors this was a reality
which I saw not only one project like
that I saw I would say over the years I
worked in Africa for hundreds of
projects like this and so I became
convinced that it is this systemic
corruption which is perverting economic
policymaking in these countries which is
the main reason for the misery as a
poverty for the conflicts for the
violence for the desperation in many of
these countries that we have today more
than a billion people but we know the
absolute poverty line that we
more than a billion people without
proper drinking water in the world twice
that number to more than two billion
people without sanitation and so on and
the consequent illnesses of mothers and
children still tribe mortality of more
than ten million people every year
children dying before they are five
years old the cause of this is to a
large extent grand corruption now why
did the World Bank not let me do this
work I found out afterwards after a left
and Arabic fight to Burbank the reason
was that the members of the World Bank
thought that foreign bribery was okay
including Germany Germany foreign
bribery was allowed it was even
tax-deductible no wonder that most of
the most important international
operators in Germany but also in France
in UK in Scandinavia everywhere
systematically bribe not all of them but
most of them and this is the phenomenon
which I call failing governance because
when I then came to Germany and started
this little NGO here in Berlin the villa
Bozek and we were told you cannot stop
our German exporters from bribing
because we will lose our contract we
will lose to the French we lose to the
Swedes volutes with Japanese and
therefore there was indeed a prisoner’s
dilemma which made it very difficult for
an individual company individual
exporting country to say we are not
going to continue this deadly disastrous
habit of large companies to bribe so
this is what I mean with a failing
governance structure because even the
powerful government which we have in
Germany comparatively was not able to
say we will not allow our companies to
bribe abroad they needed help and the
large companies themselves it is
dilemma many of them didn’t want to
bribe many of the German companies for
instance belief that they are really
producing a high quality product at a
good price so they are very competitive
they are not as good in bribing as many
of their international competitors are
but they were not allowed to show their
strengths because the word was eaten up
by grand corruption and this is why I’m
telling you this civil society role rose
to the occasion
we had a small NGO Transparency
International we began to think of an
escape route from this prisoner’s
dilemma and we developed concepts of
collective action basically trying to
bring various competitors together
around the table explaining to all of
them how much it would be in their
interest if they simultaneously would
stop right and to make a long story
short we managed to eventually get
Germany to sign together with the other
OECD countries and a few other exporters
in 1997 a convention under the auspices
of the OECD which obliged everybody to
change their laws and criminalize
foreign bribery this is thank you I mean
it’s interesting in doing this we had to
sit together with the companies we had
here in Berlin on the Aspen Institute
and on the onesy we had sessions with
about twenty captains of industry and we
discussed with them what to do about
international bribery in the first
session yet three sessions there over
the course of two years and president
from weizsäcker by the way chaired one
of the sessions the first one to to take
the fear away from the entrepreneurs who
we are not used to deal with
mental organizations and in the first
session they all said this is not
private what we are doing this is
customary there this is what these other
cultures demand they even applauded in
fact Martin Weiser still says this today
and so they are serve a lot of people
are not convinced that you have to stop
writing but in the second session they
admitted already that they would never
do this what they are doing in these
other countries here in Germany or in
the UK and so on cabinet ministers would
admit this and in the final session at
the Aspen Institute we had them all sign
an open letter to the core government at
the time requesting that they
participate in the OECD convention and
this is in my opinion an example of soft
power because we we were able to
convince them that they had to go with
us we had a longer term time perspective
we had a broader geographically much
wider constituency we are trying to
defend and that’s why the law has
changed
that’s why Zeman’s is now in the trouble
they are in and that’s why am i n s the
probably in some other countries the
OECD Convention is not yet properly
enforced and again civil society is
breathing down the neck the
establishment in London for instance
where a BAE got away with a huge
corruption case which the Serious Fraud
Office try to prosecute a hundred
million British pounds every year for
ten years to one particular official of
one particular friendly country who then
bought for forty four billion pounds
military equipment this case they are
not prosecuting in the UK why because
they consider this as contrary to the
security interest of the people of Great
Britain civil society is pushing cessful
civil societies is trying to get a
solution to this problem also in the UK
and also in Japan which is not properly
enforcing and so on in Germany we are
pushing the ratification of the UN
Convention there is a subsequent Condor
we are Germany it’s not ratifying why
because it would make it necessary to
criminalize the corruption of Deputies
in Germany we have a system where you
are not allowed to bribe a civil servant
but you are allowed to bribe the deputy
this is under German law allowed and the
members of our Parliament don’t want to
change this and this is why they can’t
sign the UN Convention against foreign
bribery one of the very very few
countries which is preaching honesty and
good governance everywhere in the world
not able to ratify a convention which we
managed to get on the books this about
160 countries all over the world I see
my time is ticking
let me just try to draw some conclusions
what has happened I mean I believe that
what we managed to achieve in fighting
corruption one can also achieve in other
areas of failing governance by now the
United Nations is totally open on our
side the World Bank has turned from
solace to powerless under Wolfensohn
they became I would say the strongest
anti-corruption agency of the world most
of the large companies are now totally
convinced that they have to put in place
very strong policies against bribery and
so on and this is possible because civil
society joined the companies and joined
the government in the analysis of the
problem
in the development of remedies in the
implementation of reforms and then later
in the monitoring of the forms of course
if civil society organizations want to
play that role they have to grow into
this responsibility not all civil
society organizations are good the Ku
Klux Klan is an NGO so we must be aware
that civil society has to shape up
itself they have to have a much more
transparent van
governance you have to have a much more
participatory governance in many civil
society organizations we also need much
more competence of civil society leaders
this is why we have set up the
governance school in the center for
civil society here in Berlin because you
believe most of our educational and
research institutions in Germany and
continental Europe in general do not
focus enough yet on empowering civil
society training the leadership of civil
society but what I’m saying from a very
practical experience if civil society
does it right and enjoying the other
actors in particular governance
governments and the international
institutions but also large
international actors particularly those
which have committed themselves to
corporate social responsibility then in
this magical triangle between civil
society government and private sector
there is a tremendous chance for all of
us to create better work thank you