[Arturo Herrera]

I think at this point it's clear that everybody understand that corruption is one of the most important problems in every country. It's pretty much at the top of the list in terms of the issues that citizens complain about, and pretty much at the top of the list in terms of the frustrations that citizens have. But while there's agreement on this issue, there's not a clear-cut agreement about the costs of corruption.

[Patrick Alley]

I think the first thing I'd like to say is that a lot of people don't really understand that corruption is far, far more than cash in a brown envelope. Corruption is not a victimless crime, and we all are victims of it.

[John Githongo]

Corruption does more than anything else to destroy the very essential relationships in society that are needed to have peaceful, harmonious development in a society. It undermines the very glue that holds society together, where cannot trust each other, and when you can't trust each other, even doing simple things becomes extremely difficult.

[Delia Ferreira]

The institutional costs of corruption are also important, and you cannot measure that in figures. You measure that in a successful future for a country, a future full of opportunities for people to work, study and live in freedom.

[Patrick Alley]

I think if you're looking at the destruction of the world's rainforests, the illegal fishing of the world's oceans, the wildlife trade, all of these things involve criminality and corruption, so virtually every environmental crime you see is a crime of corruption in its root.

[Delia Ferreira]

Corruption is, I would say, at the heart of our failures as society. You can think about, for instance, the fires at the Bangladeshi textile industry. Everything was okay, certifications were signed and given to the owners, but nothing was in place in case of fires, and the result was lots of people dead. That's a huge, huge cost. You can think about the Beirut blast for instance, with parts of the city completely destroyed, which is not only infrastructure. It was the apartments of people, and of course the very tragic thing of lives that were lost because of the blast. That's the cost of corruption, not the amount of the bribe paid for a certification without doing the proper controls. The cost is people's lives and people's possibilities. Corruption is a problem for all of us, all of the citizens, and we must all work to tackle corruption.

[John Githongo]

It's time for a reboot and I think that is underway, and it's being driven by the indignation and anger of young people.

[Arturo Herrera]

At the World Bank, we are, among other several things, working on three different parallel channels. One, we are obviously discussing how to strengthen institutions and how to strengthen trust in government. On the other hand, we are still working on the old-fashioned cost of corruption, and trying to fine tune the cost of corruption at the micro level, at the sectorial level. But we are really interested in trying to kick off a conversation about these other costs of corruption, the ones that imply and have costs in terms of the social contract, et cetera. This is pretty much a work in progress. This is kicking off an internal debate, quite interesting. People are passionate about it. We would like to invite you to join this conversation.

[audience applauds]

[Simon Fowler]

What an attention grabber. Good morning everyone, and good morning to everyone watching us on World Bank Group Live, which is a streaming platform going out across the globe in a number of different languages. My name is Simon. I'm going to be your master of ceremonies and host for the next two years. I'm a professional master of ceremonies, and I'm going to try to make sure that we do things properly for the next two days. That's what governance is about, correct? And governance told me to make sure we do that. So thank you to the governance team for having me here. I'm thrilled to be here, and we're going to kick off straight away by some opening remarks for this incredible forum, Anti-Corruption For Development with Roby Senderowitsch, the Practice Manager for Governance Global Practice. Roby, please.

[audience applauds]

[Roby Senderowitsch]

Good morning everyone. Thank you. And for those of you who came from far away, I know. Where is David from Solomon Islands? I met with him yesterday. It must be Tuesday for you already. Thank you so much for coming all the way here, all of you here. Just to do a quick check-in. This is a very important day for us, a very important crowd for us as well. Raise your hands if you are coming from government or public sector agencies, parliaments, justices, the judiciary, raise your hands. Thank you. Raise your hand if you are coming from civil society organizations, the academia think tanks. Thank you. Raise your hand if you are coming from the private sector, private sector companies, chambers, associations. Good. Raise your hand if you're coming from the media. We have a few, and there's a special session this afternoon about that. And if you're coming from other international development institutions as well [inaudible]. Thank you all for being here today. We are starting already on time and we are going to keep this for the rest of the two days. Simon said he's going to be with us for the next two years. Was that an expression of hope?

[Simon Fowler]

Hope.

[Roby Senderowitsch]

Yes. Thank you, Simon. And now I'll pass it to Arturo Herrera, who is our Global Director for Governance, so we can start this wonderful event. Thank you. Arturo.

[audience applauds]

[Arturo Herrera]

Thank you, Roby. I'm going to be very, very brief. They told me that my job today was to introduce Pablo, and that's a pretty concrete and a great responsibility, but let me just share a few thoughts before doing that. It's almost a year since I came to The Bank and I came with a responsibility with a very large portfolio. Everything from tax administration, budget efficiency, e-procurement, et cetera. As I have been traveling across the world, these topics keep popping up. But the one that is most consistent, the one I'm hearing everywhere I go, is the concern about corruption. Last week I was in Jamaica in the INTOSAI Meeting, which is a meeting that put together supreme audit institutions, and the main issue there is the agenda of anti-corruption. Two weeks ago, I was in Ivory Coast, in something called the Hunters Corruption Alliance, and the title speaks for itself. As I said, this is a topic that I keep hearing, but I keep hearing from completely different stakeholders. I hear it from people who come from the transparency and accountability agenda. I hear it from people in academia, which might have made a research program about trying to understand it. I hear it from people who think these issues need to be addressed from the angle of civil society and society participation. There's also the judicial angle. There's a very wide variety of opinions, and I think what this meeting over the last two days is about, it's actually about learning from each other. There's no one single silver bullet about how to mitigate the risk of corruption or about how to eliminate corruption, and this is what this conference is about. Now for my main job. As I said, as Roby mentioned, there are many institutions here, many institutions that care about anti-corruption and the World Bank is one of those institutions, and Pablo Saavedra, The EFI World Bank Vice President is going to address you, to kick off this meeting. Thank you. Pablo.

[audience applauds]

[Pablo Saavedra]

Good morning and welcome to this Anti-Corruption for Development Global Forum. I would like to start by thanking our co-hosts today, the Transparency International, UNODC, USAID, the United Kingdom's FCDO, the Foreign Ministry of the Netherlands, the Chandler Foundation, and the U4 Anti-Corruption Resource Center. This is a work that we are all doing in common and this is a big agenda for all of us. Corruption continues to be a very critical issue for all of us here and in the world, and it carries very large costs for developing countries. Unfortunately, it has also a very disproportionate impact on the poorest and most vulnerable as you were seeing in the video, by increasing the cost of health, the cost of education, water, justice and even taxing transactions every time that citizens interact with government in some instances. It also affects public infrastructure, large projects that go into large overruns, costs that were not part of the original project. We run into issues of low quality in infrastructure, that then needs to be addressed by additional fiscal cost of doing renovation and refractions et cetera, at the cost of taxpayers and all citizens. And also infrastructure that has poor safety, and then we pay sometimes in human life those costs. Corruption also affects all that in public infrastructure. And of course, it reduces a private sector investment, because private sector investment wants certainty, wants rule of law and corruption doesn't bode well in that context. It also increases the financing cost of the sovereign, and by doing that, influences the cost of everybody in the country. Corruption cost permeates across different aspects. Actually, we were measuring these type of issues in our enterprise surveys. We do this in 144 countries. Just there, one in five of the respondents, these are firms, highlight that they had to make an informal payment for procurement. They admitted there. Procurement is one of those large categories of corruption that takes place in countries. Think about a developing country. On average, of course depending on the size, they spend between 3% and 8% of GDP in public procurement. Of course, larger economies spend more than that, but that's a significant chunk and there's significant corruption is one of the main avenues. Curtailing that, curving that has a big influence. Technology is giving us an opportunity now over the last few years to tackle several avenues for corruption. One is this issue of procurement, and e-procurement, making public purchases of goods and services of the government, brings transparency, reduces the incentives and gives the clarity that this process needs. By all means, it doesn't cut corruption in its totality, but it helps move us in the right direction. Same for taxes. At the beginning, it's costly to implement measures to have electronic invoicing and have a more digital approach to stop avoidance and especially evasion in taxes. But over time, firms get used to it. It's a much more transparent way to approach the issue, and citizens also appreciate that there's less interaction with tax officials in some countries where this is problematic. So that's another way. Another way that we are seeing a big surge including in projects in the World Bank, is through GovTech. GovTech offers an avenue to automatize and put in a digital way all the interactions that citizens and governments have with each other. By reducing that human interaction of citizens and government, we also reduce opportunities for corruption. Typically, we call those interactions between citizens or small firms and government petty corruption. But for those people, especially the ones that are poor, vulnerable, have low income or small micro firms, it's a big cost. It's a tax that they have to pay. Tax in money, tax in time, et cetera. Bringing that to the government interactions with citizens also is a very important avenue to build trust. That's one block, technology. But there's a second block that is well known and we see that it's also helping a lot, and it is access to information. Access to information puts forward the opportunity for journalists, NGOs and citizens to access the information that the government has on all categories, on all issues. That on its own helps to bring the demand side to this. This forum is about building trust, and to build trust, you need the supply side interventions, but also you need the demand side as aspects of better governance and anti-corruption, and that citizens engaged and looking at what their governments are doing. So access to information is very important. From our side, The World Bank has been working on this issue for a long time, and remains a critical part of what we do. We have done over the last five years, $23 billion in 119 projects that have a component on transparency or accountability or good governance. This remains at the core of what we do, and we do it through our different operations, we do it through our policy dialogue with the authorities, and we do it throughout all our internal policies on how we do procurement and fiduciary. In Brazil for example, we work with the government and supported an artificial intelligence system that actually can link different databases that are public and some others that are not public, and through that system identify potential fraud in tax administration. That same type of approach to technology can help on procurement, can help on many audit aspects of a country, and again, can bring some light from the supply side on what's happening. In Bangladesh, we're working with authorities to publish all procurement data online, all purchase of goods and services. Again, bringing light to that aspect. In Ukraine, in partnership with a number of players and other partners, we support the establishment of a high anti-corruption court. In Mauritania, we helped to set up the Financial Intelligence Unit to fight money laundering. Here, it is another aspect, another side of the coin on corruption. Anti-money laundering, our own initiative here at The Bank on Stolen Assets Recovery Initiative, and overall the agenda that we have on illicit flow of funds. This is the other side of the coin. There's rent seeking on one side that takes money out of activities, and then you have to follow the money, where it goes outside the country. We are trying to tackle that from all aspects. And of course, The Bank has continued doing an analytical work on this and also like this event, gathering players and partners that are interested in this agenda. We have done that through the Anti-Corruption for Development Global Partnership, that today has more than 50 partners that have joined. This agenda is definitely not easy. You know better than anyone else that have been engaged on this. Opportunities for corruption are everywhere, and our approach is to tackle those aspects, first from the supply side on every aspect that generates an opportunity through our operations, through our policy, through our analytical work. But also, we need to focus on aspects that foster the demand side of it, as I mentioned earlier, so the citizens get engaged on this agenda. That's the only way to build trust on both sides. With that, I know that you will have two very interesting days and we'll discuss many of these topics and many more topics in a lot of detail, so I wish you very productive discussions. Thank you.

[audience applauds]

[Simon Fowler]

Thank you very much Pablo. So just to get you into the mood, if you're not already in the mood, we could to just run a little audience poll just to find out what you think about this topic, and make sure you are in the right room. Please take out your phones and scan this image you see. I will move out of the way. We have a couple of questions, and I'm assisted by Mark over here, he's our tech wizard and we're going to ask a couple of questions. The first one here is a little bit sort of frivolous. I want to understand whether you can get into the software, first of all. Since we're talking about anti-corruption, nobody can see your answers except us up here. So this is completely anonymous, I promise. Are you excited to be here? Are you cool as a cucumber? Are you hopeful about the outcomes? Some of you had just had coffee. Could you please give me a second, because I'm not ready, and are you worried about the state of this topic? We have a clear winner, "Excited to be here." That's good. You are all in the right place, right? Good, excellent. 10 of you are cool as cucumber. Excellent, that's very good, because it's summertime, we like cucumbers. Let's move on to a more serious question. "Which segment of the anti-corruption community do you represent? Development partners, local or central government, CSOs, academia, private sector or other." Perhaps you are not even listed there. We have a large other category. So who are you, the others? Anybody want to shout out quickly? Don't be shy. Press, maybe. For those of you watching in World Bank Live, you can join us with this too of course. Let's move on to the next question. "Where do you work in anti-corruption?" Here you've got three choices, actually four. Are you in all of the above? And we are going to do a number of polls throughout the next… and I'm not going to say two years this time, because we're only here for two days, I do promise that, because some of you got tickets to leave and go home again, right? We are here for two days, but during these two days, we'll be doing a few polls just to keep your energy and your attention, and just to find out what you think about different topics. All of the above is winning here. Excellent, good. A lot of different technical views here. The last question, please. This is what we call a word wall. You can write a short answer here. Is there one more question? "What outcomes do you wish to achieve by attending this forum?" And this is very interesting I think for our speakers, especially for our first keynote speaker and for our moderator who I'll introduce you in a second. What do you hope to achieve by attending this? We want to network. "We want to learn from each other. Collaboration is key. We want to have new ideas to implement in my own country. Develop some urgency. New insights. Collective action." I believe that's exactly why we are here. This is about collective action, learning from each other. Assuming that we don't know all the answers yet, together we can form partnerships to try to solve some of these questions. Anything else? It seems to have stopped there. Is that that good enough? All right, thank you very much for playing along. With that, I would like to introduce our keynote speaker. Let's go back to our slides, please. Keynote speaker is Francis Fukuyama. Mr. Fukuyama, please join me on stage. It's really nice up here.

[audience applauds]

[Simon Fowler]

Pleasure meeting you. Please make yourself comfortable. You have a choice of two. Then as our moderator today for the next 55 minutes, would you please welcome Martin Raiser, who is the Regional Vice President for South Asia at The World Bank.

[audience applauds]

[Martin Raiser]

Nice to meet you, sir.

[Simon Fowler]

Good morning, nice to meet you. Both microphones are ready and I'll leave everything in your capable hands. I'm here if you need me.

[Martin Raiser]

Do you just want to start this? I think we will hear first from Professor Fukuyama, and then I think my role is to ask the questions you don't dare to ask, or maybe at least to ask some questions, and I look forward to the discussion. Thank you.

[Francis Fukuyama]

Thank you very much, Martin. I want to thank the Governance Practice for inviting me. This is a really important topic. I've seen already quite a few old friends and I would say, everybody in this room is doing God's work. It's important that we do this collectively and do share knowledge. Let me just say a few introductory things about corruption, and put it in a little bit of a historical and cross-national perspective. What is corruption? The standard definition, it's the diversion of public resources for private gain. But under that broad heading, there's actually several different phenomena that have very different approaches that are necessary. The most obvious is just pure theft of state resources. This can go all the way from petty corruption in a customs agency all the way up to what's called state capture, in which the major institutions of the state are actually controlled by people who don't have any interest in public benefit but want to use it for completely private purposes. This was supposedly a characteristic of the previous president in South Africa, and it continues up to the present day. There's another form of corruption that is more related to politics. There was a book called Violence and Social Orders by Doug North, Barry Weingast and John Wallis, that talked about the role of rent seeking coalitions in stabilizing conflicts. Basically, you can either fight over resources or you can agree to share them. But in the process of sharing, you essentially get to exploit those resources for your own gain. If it's a question of whether it's better to be in a civil war like the one that was in Bosnia or a peaceful situation like the one that appeared after the Dayton Accords, you're probably better off being peaceful, but it means that you've in a way fed a lot of rent seeking because that's the basis of the peace. There is another form of corruption that acts as a kind of lubricant for dysfunctional states, where the state procedures are so cumbersome that paying a bribe will get you the license or procure an outcome that you want more easily. If you're in an emergency crisis, you oftentimes want to disperse funds quickly. If you have to fill out all the paperwork and do the due diligence, you're not going to get effects. That's a potentially good solution, but it's covering over a very dysfunctional state. Then there's a final form that I think is extremely common. It's a form of democratic politics, called clientelism, in which a politician trades individualized benefits in return for political support. Now, there's a view, especially in developed countries, that corruption is something unusual that happens in certain countries that are highly dysfunctional, and the normal state of the world is clean government. This is just completely ahistorical. I would say that most governments through most of human history have actually been in the business of holding power in order to extract rents. It's actually a kind of modern phenomenon that you get governments that actually think that they're operating in public interest. This was true in the United States. Beginning, especially in the 1820s, virtually every official appointed to a federal agency in the United States was there as a payoff from a politician. This is a problem that lasted in the United States for nearly 100 years. I'm going to come back to this because the way that the US dealt with this problem may be a model for other developing countries today. But if you're suffering from this kind of rent seeking coalition or this kind of clientelism, you have to recognize that this in a way is a normal way of doing business and you have to take special efforts to combat it. I had a little section on the bad economic effects of corruption, but that's been dealt with already in the introduction. I would just say that in addition to the regressive tax that corruption constitutes, taking money from the poor and giving to the rich, it also has very deleterious political effects. It fuels a layer of elite oligarchs, it affects the outcomes of elections. Corruption often spreads from stealing state resources to other forms of criminality. Finally, in line with the overall theme of this workshop, it breeds a generalized distrust, a feeling that all politicians are in it for themselves, and that there's really no trustworthy institution to which they can return. That in turn is a breeding ground for populism and for various other forms of very counterproductive politics. In terms of dealing with corruption, I think the solutions depend very much on what type of corruption you're dealing with, and there are different fixes. If you look at petty corruption up through procurement, some of the kinds of issues that have already been mentioned, I think that there are effective solutions. The one that has been the most prevalent, I think, over the last let's say 15 years, is some form of transparency plus accountability. This can be based on technology. In Ukraine for example, they had this very successful procurement platform called ProZorro that helped in exposing a lot of corruption there. I think that one of the lessons if you look at the overall literature on the impact of transparency is that, by itself, it's not sufficient to actually beat back corruption if it is not tied to concrete accountability mechanisms. People can find out about corruption, but if they don't actually have a political means of holding the officials that are corrupt accountable, that information isn't going to do any good, and therefore, you need to think about the politics of accountability as well. If the corruption is a result of a power-sharing deal that has settled a conflict, that in a way is much harder to deal with, because if you undo the political settlement and the rent seeking coalition, you're threatening to go back into the same conflict that got you into that situation in the first place. One of the dangers of that kind of situation is that it's not transitory. It hardens into a kind of permanent power-sharing. I think that Lebanon is the classic example of this, where in order to solve the sectarian divisions in that country, there's a consociational division of power that nobody can do anything about at the present. You can have corruption countered by modernization, because as a society modernizes, you get civil society groups, you get a business sector, you get different actors in the society that actually want effective government. They don't want to have to pay bribes. That was very critical in the American story beginning in the 1880s, when you had a big civil society movement arise led by the business community that actually wanted to have clean government. That was the basis of the progressive era coalition that did things like pass the Pendleton Act that put the American Civil Service on a merit basis rather than a patronage basis. The final point I'd like to make is one I've been thinking a lot about, which is that ultimately, I think the solution to corruption is state building. That is the creation of a modern impersonal, high-capacity state. Now, state capacity and anti-corruption are related, but they are not the same thing. Obviously, if you have a highly corrupt state, it's not going to effectively deliver services to the population, but it's possible to have, for example, a relatively strong state that has a high degree of corruption. That was China, particularly before Xi Jinping's anti-corruption drive where the state was actually producing good outcomes, but there was a lot of corruption. You can also have an uncorrupt state, in which the state is kind of feckless and weak. I would say that Moldova under Maia Sandu right now has got a very good, uncorrupt top leadership, but it's an extremely weak state that has a lot of trouble dealing with the kinds of challenges that it's faced. I think if you look at the history of modern states that have managed to grapple with the issue of corruption, a lot of it really has depended on state building. Where did the incentives for state building occur? I think that a lot of it actually has to do with things like military competition. This was true in ancient China. It was true in early modern Europe. It's true in Ukraine today. If you think about what's going on in Ukraine, given that they're in an existential fight for their lives, if you steal resources at a moment when you and your family could get killed as a result, you're going to turn to public interest rather than to private gain. I think that one of the other alternatives is the one that I just mentioned, which is as a result of effective leadership of a civil society political coalition, you can push for reform of your political institutions. But the state capacity is still really important because people care about outcomes. They don't simply care about procedures. If the state actually delivers outcomes, then it's going to have more trust and it's going to be seen as more legitimate by citizens. I guess the final point I'll end with is the question of political power. That explains in many respects why a lot of efforts by development institutions have had rather disappointing results over the past, let's say 20 years. Corruption exists because it is in the benefit of very powerful political actors to be corrupt. If you don't dislodge those political actors, you're not going to really deal with the problem. Generally speaking, the outsiders don't have enough leverage just on their own, let's say through loan conditionality, to really push these people out. All you do is push corruption into a different part of the government, but it really stays the same. That means that the fundamental political power that will actually defeat corruption has to be generated internally. It has to come about through a coalition of internal actors that really want an uncorrupt political system, and that requires leadership, organization. The outsiders can help, they can provide technology, they can provide advice, but fundamentally that political coalition has to be driven internally. Therefore, I think the development institutions have to look for opportunities that are being generated by the domestic politics in all of these different countries. If you don't solve the problem of corruption, I think you've got a really big problem. We've seen this general erosion of trust. There are many polls and indicators that have shown that across the world, trust in governments has been falling very dramatically over the last 40, 50 years. That includes rich countries. It includes the United States, where social trust and certainly trust in government is at historic lows. This is really what breeds populism, because what populists say is that there is an elite conspiracy that doesn't take the interest of ordinary citizens into account, and we are being manipulated. Indeed, if there's a high level of corruption, they are being manipulated. Therefore, I think that for a healthy democratic politics, if you don't solve and address both of the issues of corruption and of building state capacity, you're going to end up in a very dysfunctional form of politics. With that, I look forward to our conversation.

[audience applauds]

[Martin Raiser]

Thank you very much, Frank, for these opening remarks, which set the scene, I think very well. I should have corrected myself. The questions that you don't dare to ask, you should dare to ask because I will only ask a few and then I'll open up to Q&A. I feel a little intimidated, frankly, sitting on stage next to you because I'm a great admirer of your work, particularly the long historical analysis of how effective states were built in the west. Applying that knowledge to development and trying to think about how can effective states be built, but also trying to reflect on why in the west we're starting to see an erosion of effective state institutions, I think is a really fascinating topic. I'd like to perhaps ask you three broad questions before we open it up to the audience. The first question relates to this idea of corruption as part of a political settlement, and the question of how do you envisage positive transitions out of such a settlement and what can be done about it? I think I know more examples of negative transitions. I'm thinking in my region in Afghanistan, clearly the transition was in the wrong direction. All attempts to build an effective state failed, and one could argue were ultimately undermined by the inability to build a political settlement that was not reliant on corruption. But I'm curious, do you know from your experience a good example of a political settlement that developed in a positive direction?

[Francis Fukuyama]

Well, in a certain sense, all modern governments came out of political settlements. Like I said, rent seeking coalitions are not something new that just happens in a few selected developing countries. This was really the situation of most politics in most European countries at an earlier stage in their history. I think that what tends to happen is that the society is put under stress, and the kind of rent seeking coalition that produced stability in an earlier period is no longer adequate. Just to give you current example, again, I don't want to constantly refer to Ukraine, but Ukraine's big problem before the war started last year was that its economy was controlled by a group of about six or seven oligarchs, who had made their money as a result of the dysfunctional privatizations that occurred at the time of the collapse of the former Soviet Union. And really, that was the driving source of corruption in that society. Today, those oligarchs are really on thin ice in many respects, because if they continue that kind of activity... Rinat Akhmetov has actually seen his net worth fall by three quarters because his steel plant in Mariupol was bombed by the Russians. It provides this big opportunity actually for a shift out of that rent seeking coalition into something better. If the Ukrainians are smart, they will take advantage of it. Now in other places, you can't wait for a war and the physical destruction of assets for this to happen. That's I think where the kind of modernization coalition comes in, but I'm having a little bit of trouble thinking about a recent example where that has happened, because as I was saying, the problem is that once you create that kind of coalition, it tends to harden over time. As the society develops, it becomes more and more dysfunctional and it actually creates its own dysfunctions that could then lead to a further relapse.

[Martin Raiser]

I guess one tentative conclusion in the search of still positive transition examples is that one ought to be very careful in negotiating political settlements to make settlements that are built around corruption. Would you say that we should not accept it? Because we are constantly in fragile and conflict states facing the need for us to decide, is this acceptable enough? Or does it create the risk of creating these negative transition parts further on?

[Francis Fukuyama]

Well, look, as I said, a lot of times the reason that you develop these settlements is because the alternative is violence. You want to stop the violence, and that's an urgent priority and the rent seeking coalition is an alternative to war, but it takes a long time really for that then to evolve into something like a more public facing state. I think that people's expectations for how rapidly that transition can happen are sometimes a little bit elevated.

[Martin Raiser]

I want to turn to another point that comes out of your work, particularly the historical work, which is the question of sequencing. I think you say in one of your contributions or perhaps in several, that there is a risk of prematurely opening the franchise before an effective state has been built. That that can be a source of clientelism. So effectively, the push for stronger democratization, for electoral processes in countries with weak states may lead to political strategies for winning votes that are based around the distribution of rents and favors. Could you elaborate on this? Do we need to put democracy on the back burner until effective states have been built if we want to avoid that risk?

[Francis Fukuyama]

Well, the short answer is no, but it's important to keep in mind the history of this. Many modern effective states have been built by authoritarian regimes. China is a clear present-day example, but you look at the current German bureaucracy. Where did that come from? It was inherited from the Prussians, who established a modern bureaucracy a couple of centuries ago. And then they give it as a gift to the Democratic Germany that appears in 1949, and the traditions of that professional bureaucracy remain in the Democratic period. Now, I don't want to cast aspersions on any particular countries, but if you look around Europe, both Greece and Italy actually democratized before they had an opportunity to consolidate a modern bureaucracy. This is an argument that the political scientist Martin Shefter made many years ago. Under those circumstances, there's a huge amount of pressure to basically use clientelism as a way of gaining votes. This is exactly what happened in the United States. America has never had a Prussian style modern professional bureaucracy. It still doesn't in many ways, but certainly it didn't have that in the 1820s when the franchise was open to all white males without property qualifications. You had millions of new voters coming in, and what did Andrew Jackson and his successors figure out? The easiest way to get people to vote for them was to bribe them, give them a bottle of bourbon or a Christmas turkey or job in the post office. This was the practice in American government for much of the succeeding 100 years. I think that you see a lot of those problems occurring in Southern Europe again because both Greece and Italy opened up the franchise before they had really consolidated this kind of modern professional bureaucracy. That doesn't mean you can't get there. The United States got there and actually, both Italy and Greece have made certain strides in that direction, but it is a problem. Now, the reason I say it's completely irrelevant to the present is that there's nobody in the world who's in a position to say, "Oh, okay. We're going to delay democracy for 20, 30 years. We're going to build a powerful modern bureaucracy and then we're going to open up the franchise." It's ridiculous. Nobody can do that. Nobody's in a position to, because the expectations of people are for democratic participation and their right in demanding that. Therefore, sequencing whatever its role may have been historically it is not relevant to our current practice and we have to try to do everything simultaneously.

[Martin Raiser]

Sounds like a challenge. Maybe the third question that I would ask you is picking up a debate that I think amongst development economists has been quite prominent recently, which is this question of effective leadership show. Stefan Dercon, for example, has argued that development only happens when the ruling elites want to develop, when they have a vision of development. But others have argued that waiting for that effective leadership may be a bit of a fool's errand. I mean, you may not always have in your country's elites with the necessary power and the necessary coherence and a development vision. In the absence of that, can coalitions for development be built? Could we think of islands of excellence from which better practices spread, and that can generate a shift in expectations that a deed a better way of governing is possible? What is your sense of that? Because if the first one for us in the development community is often difficult to control, the second one, we may have some agency over. Can you give us some hope?

[Francis Fukuyama]

Sure. Well look, the question of leadership and that underlying capacity and grassroots support are completely interactive. Oftentimes, if a leader sees that anti-corruption is actually the root to power, that may actually make the leader forthcoming with an agenda that will actually be positive for the society as a whole. But I do think the leadership is ultimately necessary, because it's not just kind of citizens deciding to participate in an election or something. If you really don't have an organized coalition, you're not going to really going to generate sufficient political power to overcome all of the entrenched actors that are keeping the society corrupt. That usually requires really three things. It requires leadership at the top to organize the coalition, it requires grassroots support from the bottom, and it requires an idea. It requires a concrete vision of what an uncorrupt high-capacity government looks like. If you don't have the three of those interacting, I think it doesn't mean that you shouldn't build the grassroots support, it doesn't mean that you shouldn't push the models that you want, but it may not come together at any given moment, but at some point, it will. That's why you need to work in all of those areas.

[Martin Raiser]

Great, thank you so much, Frank, for these elaborations. Let's open it up. I can see hands up, so I'm going to go first to the gentleman over there with the blue shirt and the glasses. Yes, it's you. You're looking around, it's you.

[Simon Fowler]

Please use the microphones on the tables. Thank you.

[Peter Evans]

Sorry, I was looking for a showbiz mic, but my name's Peter Evans. I'm the director of the U4 Anti-Corruption Resource Center. Firstly to say, a great session and it's brilliant for us political economy animals that the politics is here in the first session. I guess for those of us who largely work on corruption issues in other people's countries, could we all be a bit more overtly political when talking about corruption challenges and what to do about it? Because I was kind of expecting the politics to come up in day two, in terms of talking about the political economy reality. It's great that we're front and center in the first session, but is there behavior that we could do differently? Are there other things that we could do differently, to make sure we don't lose this focus on politics? Thank you.

[Martin Raiser]

I don't know if you want to answer?

[Francis Fukuyama]

Well, okay, let me just respond to that. Another phenomenon that I haven't talked about is something that I labeled with a very long word in my Political Order books, which is re-patrimonialization. That is to say, because rewarding friends and family is a natural form of human sociability, even if you get to a modern state that has a professional bureaucracy and is supposedly operating in public interest, that doesn't mean that you can't go backwards and that there won't be powerful incentives for players to re-patrimonialize the state and re-corrupt it. I think that we're seeing examples of that in the United States. If you look at some of the things our past president was doing, it was basically clientelism. You only do emergency disaster relief for states that voted for you, this sort of thing. I think that first of all, it should make people that live in developed countries a little bit less arrogant about their own systems, and recognize that they are also subject to backsliding and dysfunctional government. But it means that can't ever relax, because the moment that you think you've defeated corrupt forces in one sector, they're going to reappear because I do think that there's a sort of natural tendency. In a way, a modern state is a little bit unnatural, the idea that you should hire somebody on the basis of their qualifications rather than hiring your cousin or your son-in-law. That is something that we see all around us today.

[Martin Raiser]

Yes, please.

[Mark Robinson]

Thank you very much. Mark Robinson, Extractive Industries Transparency Initiative. This is a question for Martin and Frank. Over 25 years ago, the late president of The World Bank, Jim Wolfensohn, gave a landmark speech, The Cancer of Corruption. 1997, I think it was. In the quarter-century that's passed since, the question on my mind and I'm sure others in the room is, what has been learned since within The Bank? What has worked and what has not worked and what lessons do we take away from that to inform our conversations today and tomorrow? Thank you

[Francis Fukuyama]

One up.

[Martin Raiser]

It's a good one. I can only really speak with confidence on countries that I know. I worked in Uzbekistan, Ukraine, Turkey, Brazil and China, and now I work on South Asia, but it's a region I don't know very well. I do think we have a lot of positive examples in the areas that Pablo mentioned in his introduction. I think we've gotten much better at using technologies. We've gotten much better at tracing the money. We can analyze value chains of public procurement and we can look at the weak links. I think we have less positive experiences, but some in building up bottom-up accountability. The citizen engagement plays a much stronger role in a lot of our operations, and in many cases, in a very positive way. I don't think we have fundamentally learned how to build effective leadership or how to build coalitions for change. I think Peter Evans asked us to be more overtly political. It's very hard for The Bank to become an explicit political actor, and so that makes it difficult for us. Very often, I think we should be honest that we don't fully understand the local politics sufficiently, to be able to even be an actor if we wanted. My own experience in the five countries that I mentioned is, I felt much more confident about reading the local politics in the countries where I spoke the language. In Ukraine, I was able to move around the local language. The same in Brazil. I was not able to do this in Turkey and China. You can argue that Turkey and China are much more complicated places, but as Debbie will confirm, even Brazil is not for amateurs. I do think that local knowledge makes a big difference for our understanding of the local politics and our ability to navigate within them, perhaps to use them for our advantage to build coalitions in support of reform. There's a very interesting book on procurement reform in the Philippines by someone called Edgardo Campos, that describes in some detail how The World Bank together with USAID built a coalition for a very controversial reform. I think it would be great to have more such examples. They do exist, but they're rarer than I would like.

[Francis Fukuyama]

Yeah, if I could say, so one of the organizers of this conference, Francesca Recanatini and I wrote an article together 20 years after the Cancer of Corruption Speech, what was the impact? We noted that it was disappointing in many respects. And again, the reason it had to do with what I just mentioned, which is that there was insufficient political power to really overcome deeply entrenched corrupt actors in many parts of the world. However, I would say that there are areas where things have gotten a lot better. I mean just in terms of state capacity, central banks and finance ministries are simply miles ahead of where they were 30, 40 years ago. The time of the debt crisis in the 1980s, you had a bunch of incompetent central fiscal institutions and that tends to be much less the case. Procurement is another area, where there are certain technical fixes that can be very useful. The other really important area I think is in tracing illicit money, because the focus on money laundering and the complicity of western financial institutions in helping to launder corrupt money was scandalous in the first place. But that's actually an area where western countries, if they really politically want to do this, can make some contributions. I think you've seen some gains in that area.

[Martin Raiser]

Let me just see a show of hands, maybe we accumulate three... Oh my goodness. We have five minutes and six questions. I think I may have to choose. So you're first, then we're going to go to you. I'm sorry?

[Simon Fowler]

Choose some ladies.

[Martin Raiser]

Yes, we go to you first and then to the lady with the glasses, and then we go to Debbie and we finish with you over there at the back. I'm sorry that the rest will have to wait. Please.

[Haykuhi Harutyunyan]

Thank you so much. Haykuhi Harutyunyan, Armenia Corruption Prevention Commission, institution newly established after 2018 change in the government. My question is for Professor Fukuyama, because he knows how I was inspired being at the Stanford University, and actually that was a driver. I took position at a public institution and I applied all the knowledge. Now I'm hearing kind of new things for myself, like countering corruption through state building. But I want really to ask to elaborate more on that, what actually it means in practice when your country where you, exactly as you mentioned, have a strong leadership but weak institution, you have a fragile environment and ongoing war. Where should we start with building the state? Thank you.

[Martin Raiser]

Are you happy taking three?

[Francis Fukuyama]

We should collect [inaudible].

[Martin Raiser]

Yes, let's take three. We have actually until a quarter past, so I think I can take all of you if the questions are short. So we go to the lady with the glasses over there.

[Alina]

Yes. Hello. My question really is about this change of environment, because we are discussing like we are still in this big corruption against development paradigm, which we were part of it for the past 30 years. But the world has been changing radically in the last year. So now, we have corruption declared by the Biden administration as an instrument of foreign policy of hostile powers like China and Russia. In response, we are going to weaponize anti-corruption, in order to defend the world. But I mean, do you think that this salience these days of anti-corruption as an international policy tool where the number of sanctions is higher than it's ever been and all these new tools coming in, are actually helping solving our old problem of corruption as an obstacle to development? Or in fact, as I thought you alluded earlier, it's actually risks increasing instability. Thank you.

[Martin Raiser]

Can we take one third one, Debbie?

[Debbie Wetzel]

Thank you. I'm Debbie Wetzel, Former Senior Director of Governance here at The Bank, and now an independent consultant. Frank, you talked a lot about the importance of high state capacity. But this term, state capacity, it would be useful if you could unpack that a little bit for us. Thanks so much. What does it mean?

[Francis Fukuyama]

Right, sure. To Haykuhi's question, unfortunately Armenia is in a really tough situation. I think that the most important obstacle to really making institutional progress is really geopolitical. The fact that Armenia has been dependent on Russia for its security, but it's not a very good patron and certainly is not one that's going to encourage institutional reform, makes things very, very hard. I would say that what you've got to do is just keep working to build that domestic capacity. Not only in your own anti-corruption organization, but in terms of that basic state capacity, to deliver services and over time, train enough people. That gets to the question of what is state capacity? State capacity is just people. It's really just people. It's having people with the right education and skills to actually run the government effectively. If you look at the major instances of state building, I covered a lot of this in the second volume of my book in Britain, in Prussia, in France, in the United States, all of the big state building initiatives were connected to a reform of higher educational institutions. In Prussia, for example, the Humboldt reforms and education were critical to their state modernization. The reform of Oxford and Cambridge in the middle of the 19th century was important in feeding the British Trevelyan Northcote. The French created these ENA and a whole series of major educational institutions. That's one of the things that I've actually wondered about The Bank's education policy, because for understandable reasons, they have focused on basic K-12 education. But actually, if you look at a lot of these development success stories, it came about as a result of actually developing an elite that could actually run the government effectively. Now, to Alina's question about sanctions, well, there's sanctions and there's sanctions. Some sanctions have actually been pretty effective. I think against South Africa, against Libya, they both worked, but the overuse of sanctions, I think in the long run is going to lead to diminishing returns, and particularly when they're used to deal with an issue like corruption, because it's so central to the well-being of a lot of the local political actors, individually important. It's not something that is necessarily going to be terribly effective. Then there are all sorts of knock-on effects of the overuse of sanctions, what it does to the dollar and what it does to the legitimacy of the United States and other developed country actors that try to employ it.

[Martin Raiser]

Great. Let's go for another round. Are you still interested, gentleman over there? Yes. Yes, you. Yeah, the one waving at me. Yes, absolutely.

[Dr. Ahmad Anwar]

[Speaking in foreign language]. Good morning. [Speaking in foreign language]

[Martin Raiser]

If you're going to speak in Arabic, I think Mr. Fukuyama and I will perhaps need translation [inaudible] those people. Are we able to do translation?

[Simon Fowler]

We are not, no.

[Martin Raiser]

Okay, so I'm sorry sir, but maybe one of your colleagues, you could explain your question to one of your colleagues who can say it in English and translate it back to you. In the meantime, let's go to you, sir.

[Dr. Ahmad Anwar]

[Speaking in foreign language]. Good morning for all.

[Martin Raiser]

Okay. Good.

[Dr. Ahmad Anwar]

[Speaking in foreign language].

[Simon Fowler]

We won't be able to ...

[Dr. Ahmad Anwar]

Yeah.

[Simon Fowler]

We have translation [inaudible]. We can translate.

[Translator]

Dr. Ahmad from Kurdistan region of Iraq.

[Martin Raiser]

Perfect.

[Translator]

Commission of Integrity.

[Dr. Ahmad Anwar]

[Speaking in foreign language]

[Translator]

I want to just ask a question.

[Dr. Ahmad Anwar]

[Speaking in foreign language]

[Translator]

The problem of corruption is actually something important here in our region.

[Dr. Ahmad Anwar]

[Speaking in foreign language]

[Translator]

The problem is the governor actually looks like he suppose everybody and the citizen is included to him.

[Dr. Ahmad Anwar]

[Speaking in foreign language]

[Translator]

And corruption crimes is actually considered as the desire for collecting money in illegal way.

[Dr. Ahmad Anwar]

[Speaking in foreign language]

[Translator]

And our path in that concern is considered so long, in order to rebuild the state and the law.

[Dr. Ahmad Anwar]

[Speaking in foreign language].

[Translator]

And I think that even in the developed countries, the sovereignty of law is also a matter that is taken into consideration.

[Dr. Ahmad Anwar]

[Speaking in foreign language].

[Translator]

The question here is, how can in our developing countries, can we rebuild and find a radical solution for that problem to rebuild our state and fight corruption and end these crimes of corruption?

[Dr. Ahmad Anwar]

Thank you.

[Translator]

Thank you.

[Martin Raiser]

Thank you very much. Let's go to here and then I can take I think two more. We'll go here and over there and now, and then we close. Please, go ahead.

[Ravi Prasad]

Thank you. I'm Ravi Prasad From Transparency International. I have a question for Professor Fukuyama. You mentioned about a coalition between civil society and leaders that can be effective in countering corruption. Unfortunately, in our movement, which is spread around the world, what we see is the civic space is shrinking. Anti-corruption activists are constantly under attack. In terms of leaders, we see every election in this world is contested on the plan of anti-corruption. The moment they come to power, it's forgotten. Any solutions, sir?

[Irene Charalambides]

Thank you. Well, I heard you talking before about…

[Martin Raiser]

Introduce yourself briefly, if you…

[Irene Charalambides]

Yeah, sorry. My name is Irene Charalambides. I'm Vice President of Organization for Security and Safety in Europe. You talked a lot about fighting corruption, but what about political will? Can you really fight corruption when there is absolute non-political will, and there is a huge gap between policies and implementation? And what do you do when the institutions are undermined because there are people there appointed by one man, a president of a republic? And then instead of serving the people, they are trying to serve the person who appointed them. Especially in small countries, when it comes to media who are quite responsible for checking on government policies, then the media, it's easy to be controlled by governments. We are going round and round in circles, and we cannot do good practices. We cannot implement good practices because of the political will not being existent. Thank you.

[Martin Raiser]

You want to take these three.

[Francis Fukuyama]

Okay, yeah.

Martin Raiser:

And then take one final.

[Francis Fukuyama]

Okay. The gentleman from Kurdistan, there's no generic answer to your question that will apply to Kurdistan and other countries, because your situation in Kurdistan is very context specific. I've been there a couple of times. I know something about the internal dynamics of the two big political parties, and that creates a problem for building a kind of centralized state institution. Maybe we could talk about this individually, but it's not something that I can... I'm not sure I can give very useful advice. The question about the shrinking space for civil society, so my activities over the past two decades have actually focused less on economic development and more on democracy promotion and human rights promotion. I was a board member of the National Endowment for Democracy for 18 years. I'm now on the board of Freedom House, and there's been a declining democratic space for 17 years in a row since about 2008, which is documented in Freedom House's Freedom In The World Reports annually. Yes, we need to push back, not just on the issue of corruption, we need to talk about human rights and human freedoms in general. How do you do that? It's very complex. Part of it is geopolitical, because you've got these two big actors, authoritarian great powers that are pushing an anti-democratic agenda. You've got a lot of ambitious actors in individual countries that want to use corruption as a tool for themselves. And you've got this weakness, I think, in a lot of developed countries. So the United States, because of its internal political problems, has not been the kind of model that it would've been 20 years ago for other countries. I think a lot of people outside the United States say, "Well, maybe you Americans should go solve your own problems before you lecture us about democracy." So there's many different elements to this about how you push back, but I agree with you that the struggle against corruption is one important part of a broader set of issues. Now, on the question of political will, I don't like the term political will because it kind of makes it seem like it's an individual issue for some leader to get up and just say, "Okay, I'm going to do the right thing today because I've had a good breakfast and I feel really strong." Political will is about coalitions. It is about building an alliance of actors that want the same objective that you do. If you have a small country with a president that doesn't want to do things and that office is very powerful, it's going to be really hard to do that. I don't have a particular suggestion for that, but generically, this is why we actually need to start a discussion at the World Bank on corruption, talking about the political economy of corruption, because if you don't deal with the politics in the first instance, you're never going to make any headway in this. What you need to do is think about where do I get allies? How do I mobilize civil society, citizens, other people? Where do we find the leadership? What organizational form, what kind of external support can we get? That's what constitutes political will, and that I think really needs to be the focus of all of the actors that really want to deal with corruption.

[Martin Raiser]

Great. I think we have time for one final really quick question. I'm going to go to the front table there. Sorry for the others, apologies.

[Arkan]

Yes, it's working. Thank you for the opportunity. My name is Arkan. I'm representing the United Nations Development Program, UNDP. My main area of work is in the Middle East and North Africa, so I'm responsible for the anti-corruption programs there. Of course, there are standards, evolving standards on anti-corruption, good practices, lessons learned, but as you rightly said, supporting anti-corruption is highly dependent on also understanding the context. In highly complex and highly volatile situations, what role can really international organizations or organizations that are by nature risk averse, short-term projectized and mainly concerned about delivering grants, loans and smaller type of more concrete development assistance? What role can they really play in actually tackling this problem, that by nature requires some risk taking, some longer-term vision, and also the ability to think in terms of trade-offs between delivering and actually supporting reform? And then putting that in the context of the return of geopolitics, which has been raised beyond sanctions. Also, do you see now this kind of polarization, more opportunities for expanding the anti-corruption global movement, or actually risks that it can be shrinking because of this kind of polarization in terms of geopolitics? Thank you.

[Francis Fukuyama]

Well, as you yourself noted, there's no generic answer to your question about what development organizations can do. It really depends on the country. I would simply note that you shouldn't look back at the past 20, 30 years as a failure because as I said, there are specific areas in which help from The World Bank, from UNDP, from other organizations actually did succeed in building state capacity. As I said, central banks, finance ministries, they're very technocratic agencies, but a lot of work has been done there and there are other areas where that can happen. I think that what's important to recognize is, as I was saying, the fundamental driver of improved institutional performance has got to come from within the country. The external partners have to really see themselves as partners to work with those domestic actors, because they're really the ones that are going to both not only address the problem, but they're the ones that can actually define the problem best. That's where the fundamental action, I think, is going to have to come from.

[Martin Raiser]

Thank you very much, Professor Fukuyama. I think this was a discussion that probably could continue, as the hands of participants that wanted to ask questions and didn't get a chance suggests. But I take away a strong plea from you for us to take politics seriously. That's something that I very much agree with. We have to move beyond the fiduciary, beyond the PFM, beyond the technical assistance to engage in the politics of state building and development, if we're going to overcome the problem of corruption. Many issues we didn't touch upon, such as the reason for the deterioration of trust in western societies, even those where corruption ostensibly is still quite low. It's not, in my view, just directly correlated, but we'll leave that discussion for another day. Thank you for giving me the chance to moderate. It was a real pleasure to have you here, Professor Fukuyama, and to all of you, a nice forum. Thank you.

[audience applauds]

[Simon Fowler]

We are going to start our next session and Corinne Woods, the director of corporate communications at the World Bank, herself, an expert in the role of media, I believe is going to be our moderator. So please, Corinne? [inaudible]

[Corinne Woods]

Thank you very much. Good afternoon to everybody. Good afternoon to everybody in the room. Good afternoon to everybody not in the room who is listening to this livestreamed or various other ways. We have here a really quite extraordinary panel. We had a conversation on Friday and the conversation started and we felt like we couldn't finish the conversation, it was so interesting. As no doubt you've seen, this conversation is about the role of the media. It's going to be about the role the media plays in raising public awareness about corruption…

[audience member]

[inaudible]

[Corinne Woods]

It's going to be the consequences, the role of investigative journalism and how investigative journalists shine light on allegations and the importance of access to information and free media in controlling corruption, so really interesting panel. All of whom know each other in various ways, I'm the only person that doesn't know any of them. I think that's a fantastic thing and says something about the interconnectedness. We are going to be talking for about 35, 40 minutes and then the last 20 minutes will be dedicated to answering questions from the audience. Let me just start with you, Fergus. This is going to be me trying to understand some of the acronyms. Fergus, you are the managing editor of the ICIJ. Does everybody know what the ICIJ is?

[Audience]

Yes.

[Corinne Woods]

Yes. Okay, I'm the only person that doesn't know what the IC… You clearly have done a very good job of explaining your acronym, Fergus. You've overseen many projects, Pandora Papers, FinCEN Files, Luanda Leaks, so you've done really amazing work. It's garnered national and international awards for your organization. Can you share with the audience what it was like to manage global investigations of this magnitude and how did that feel?

[Fergus Shiel]

Sure. Thanks very much. This must be the only room in the world that knows who we are en masse, so congratulations. I feel very comfortable here. Our name is quite a hurdle for not only news readers but the general public. ICIJ is a small but remarkable organization. There's not very many of us, there's about 40 of us. But we achieve huge impact through collaborating with journalists all around the world. On Pandora Papers, it was 600 journalists in about 170 countries. On FinCEN Files, I think it was 118 countries and about 400 journalists and it was my happy task to oversee those projects. As well as doing that, ICIJ achieves one another thing, which is equally remarkable, we are one of the biggest platforms for information about companies in the world and we've done this all on a shoestring. If you go to the Offshore Leaks Database, which we control, there's 810,000 company details there. I was at a session only moments ago about ultimate beneficial ownership, where country after country is trying to tackle this issue and is struggling to do so and trying to get their heads around how to do so. One easy way to do it is to look at what ICIJ has done and to follow our lead because what we have done is what multiple countries have not done, and we've done it with hardly any money and hardly any staff. I think you can follow our lead and I think you can do a lot better. ICIJ's projects have achieved huge impact, so we have brought down four or five governments. We have seen people arrested, charged and jailed. We have encouraged governments across Europe, America, the rest of the world to introduce meaningful reforms that have tackled money laundering. In relation to... I'll talk briefly about two projects and then I'm just going to move on. Pandora Papers was remarkable for one particular reason. One was showing the nexus between power and financial corruption. What we demonstrated was sadly, tragically, was that politicians all around the world are up to their elbows in financial corruption. Politicians around the world are involved in the offshore industry, benefiting from it. The same people that we rely upon to fix the problem are benefiting from the problem, are behind the problem, are looking the other way. We found more than 330 international figures, including 35 world leaders with offshore companies. We were able to demonstrate that, for instance, the Czech prime minister had a palatial mansion in France that he had hidden the details of ownership of through offshore companies, he subsequently lost election. We showed... I don't know, name a country, Kenya, Ecuador, Chile, Brazil. We showed politicians involved in the offshore world, the Blairs in the UK. It wasn't simply a Latin American issue, wasn't simply an African issue, it was a European and an American issue. We were able to show that America through South Dakota and other offshore entities, offshore havens here in America was equally culpable and involved. I think from that we... Through having a big impact through that project, we were able to dispel some of the hopelessness that I fear people feel around the issues of money laundering and corruption. I feel that the biggest challenge that we face is that sense of despondency. One of the great gifts that ICIJ gives is a sense of impetus, a sense of control over the issue, a sense that you can do something about it, that transparency is possible, that opaqueness can be dispelled through journalism, through the work of advocates as well, such as Transparency International, who I can see are doing fantastic work through registries that have been achieved by countries and through organizations like [inaudible] and FinCEN, and other organizations that sadly, tragically are far too poorly funded. If I would make one more call here it is for you all to try and get behind funding the banks to look at this issue because when we did the FinCEN Files, we saw trillions of dollars moving, dark money moving around the world and overwhelmed money laundering, anti-money laundering figures within the banks, just completely swamped by this. I think my message here is that we can do things, I'll just briefly move to the Luanda Leaks, which was another of our projects where we've got 700,000 documents. Pandora Papers was 11.9 million documents, which we sifted through for two years, 600 journalists, night and day. Luanda Leaks was quite different, there was only 700,000 documents, but they were all related to Isabel dos Santos, who was that point, the richest woman in Africa. As consequence of our work, she's had a billion dollars in assets frozen. She's facing criminal and civil charges across the world and the people of Angola can celebrate because the single biggest spigot for the siphoning of money from that poorer country has been closed. Some of that money we hope will be returned to Angola. That is my other final shout out to you all, please. There are so many DPAs, deferred prosecution agreements, which bring companies and other corrupt figures to their knees in... Not to their knees, but they nobble them financially, but the money does not go back to the victims. If there's some way that you can get money through the World Bank and others, if you can see it, that the money from corruption can return to the victims, that will be a huge advance.

[Corinne Woods]

Thank you, Fergus. I'm going to ask you one additional question before I move to the next speaker. International Consortium of Investigative Journalists, but with 400, 700 journalists who are, if I understand correctly, working at the national level. How do you see the international, national playing and what's the role of being international to be able to facilitate, help, support, or indeed play a specific role?

[Fergus Shiel]

Thanks. Yeah. The way ICIJ works is really simple, so what we do is we have a core team. It's about 40 of us, and that team, we've got IT people that maintain our servers that hold the hundreds of thousands of documents about corporate companies. Then we have a team of about 10 people that are data and research specialists, and then we have reporters and editors. It's really tiny, a really tiny organization. What we are really good at though is involving others in our projects, so we conceive of projects. For instance, we say Isabel dos Santos, did she really get the money all through hard work as she said, or maybe she didn't? Then we set out to answer the question, Pandora Papers, is it a bad apple or is it a bad barrel? Question. Then we set out to answer that question. What we do is, I literally, and it's not metaphorical, I ring all these reporters, I ring them. Many of them are my friends, lots and lots of them are friends. Yesterday, a friend of mine was in Greece, so I asked two investigative reporters... If you ever want to get restaurants in Greece, investigative reporters are the best people in the world. Within seconds, they sent me back hundreds of restaurants that I was able to tell my friend about. I ring newsrooms around the world, I ask them, "Will you join us? If you do, will you agree to publish at the same time and not tell anyone what you're doing?" That's what we do. The agreement is really simple, we agree to investigate the same topic at the same time in multiple countries. We agreed not to tell anyone else what we're doing for up to two years, which is hard, and finally we agree to publish at the same time. Through that method, we achieve what otherwise would be completely impossible. We match the corrupt ecosystem, which is international, which is tireless, which is relentless. We match it by having hundreds of reporters working tirelessly, relentlessly across countries at the same time to look at the problems that are behind poverty, that are behind criminality, that are behind narco trafficking and Ponzi schemes and global corruption.

[Corinne Woods]

Thank you, that was a brilliant end answer. Relentless. Brian, relentless, you work for an organization OCCRP. Does everybody know what the OCCRP is?

[Audience]

Yes.

[Corinne Woods]

Yes. I'm getting lots of... But there's lots of people at the back that are not nodding.

 

[Brian Fitzpatrick]

Okay, well I can maybe explain a bit.

[Corinne Woods]

Okay. Now you've worked with Fergus and his team, you are part of the relentless group, which is fantastic. How do you complement each other's work, and what impact has the coverage you've had on fighting corruption, and how is it working with these guys?

 

[Brian Fitzpatrick]

Fantastic. It's all great. Everybody gets along swimmingly. No, as you can imagine these types of investigations, there's an awful lot of pressure and a lot of stress. I think the way we complement each other is we're all part of organizations that have realized that the way to uncover things, the types of things that we're looking at, is not by living in these individual silos and succumbing to your own ego and thinking that the newspaper up the road might do better than you. It's actually by having the humbleness to go and say, "Look, we have this massive trove of data, we don't think it's enough for us. We would all be better piling our resources together." Taking the two years, as Fergus would say, or sometimes even longer to... Some of these projects, by the time they start, you barely remember how they started by the time you get to the end of them. But taking the time to do them properly, pulling in as many good reporters as we can, pooling our resources so that you end up with a much more rich product at the end, it comes out with one big bang and hopefully has as much of an impact as you possibly can at publication time. It's a lot of everybody agreeing to do the same thing at the same time, as Fergus said. I think that's it, we're part of this new wave that realizes that collaboration and almost radical sharing of information is much better than the previous approach that we're used to, where the media outlets would fight cats and dogs. Now you see them, previous rivals, actively working together to the same end.

[Corinne Woods]

It's radical partnerships and as a way of moving forward as journalists to cover corruption investigations. Talk about something that's worked for you.

 

[Brian Fitzpatrick]

Well, I suppose two of the bigger projects I've been involved at since I started at OCCRP were Suisse Secrets, which was the huge Swiss banking leak last year from Credit Suisse, an 18,000-account leak that showed the world basically I suppose that Credit Suisse, despite its numerous promises over the years and years and years had actually been banking seriously suspect individuals, facilitating them and in instances it seemed actively seeking them out as part of their client base. We spent an awful long time going through that information and we discovered they were banking spies, they were banking accused torturers, they were banking drug traffickers. When we went to them at the end it was like, "Well, all of this data is historic, we've cleaned up our act." But if you looked through the accounts at the times that these people had them and the activities those people were up to at the time, there was absolutely no reason that they should have been providing services to these people. We exposed that for the world to see, and I think we were proven right in the end basically. It’s an awareness impact as much as any proposal at the European Parliament. Actually I should say it was interesting to note that in the wake of that, Credit Suisse actually and the Swiss authorities went after the whistleblower rather than holding their hands up. That was extremely disheartening to see, our Swiss media partners couldn't even become involved in the project because of the secrecy laws there. But I think people are... When they saw the types of people they were dealing with, they sat up and took notice. Lastly, the other project that I've most recently been involved in was the Russian Asset Tracker, which recently won the European Press Prize for innovation. That was in the aftermath of the full-scale invasion of Ukraine. We went after, started with a list of I think 35 oligarchs tied to the Kremlin and it expanded and we just found billions of billions of assets with various partners around the world, so those have been the two.

[Corinne Woods]

Do you want to come in, Fergus? I see you.

[Fergus Shiel]

Yeah. Just on whistleblowers, that's another thing. I mean Brian is absolutely right. It's really tragic, the treatment of whistleblowers. The on Luanda Leaks, the whistleblower is currently... Rui Pinto is name, he's a remarkable guy. He should be getting the Legion of Honor, but instead he's facing court in France, and having previously been in jail in Portugal and with the FinCEN Files, which uncovered whole scale corruption and criminology, the whistleblower there went to jail for six months. The treatment of whistleblowers is scandalous, internationally scandalous. It seems to be ubiquitous and continuous and unless the world gets to grip with the concept of honorable transparency, the corruption will continue.

[Corinne Woods]

Thank you. Let me just now move on to Simon. Simon, you are on the front line, as it were. Do you think that's fair to say? You've investigated, you've taken forward, you've filed stories. Do you want to just talk from your perspective what it is to work in this arena?

[Simon Lock]

Yeah, sure. I work at the Bureau of Investigative Journalism, which is a UK based organization. We're probably one of the biggest independent investigative reporting teams in the UK, based inside of the UK. We work on cross-national investigations with multiple publications across the globe on dozens of investigative stories. We particularly target sectors like pharmaceuticals, the environment. I particularly work on the finance team. I work on our project called The Enablers, and the focus behind that is that you have your kleptocrat, but actually, they're an individual but they have an entire entourage around them. Many of the leaks we've referred to are the framework behind them, trust advisory companies that might work for them, lawyers, accountants, et cetera. Our focus is on their role in facilitating corruption. I think broadly being on the front line in terms of reporting, I guess the problems one faces are split into the front end and the back end. On the front end, you have as the problems we've referred to with whistleblowers, a lot of people coming forward with information that is both incredibly in the public interest but very dangerous for them to be passing on. The damage they can face in trying to convince them to provide this information or working with them to make sure that it has the full impact it should. I guess the other thing as well is really on transparency and accountability, it does not take long in the world of financial reporting to hit brick walls, opaque data sets. Anyone who's chased UBOs across multiple countries will know this already. Corruption is not... Even if it involves politicians in a particular nation and moving of assets in that nation, it's never limited or extremely rarely limited to just that country. They often use entities all over the world and moving up that chain, following the money is incredibly difficult. To put a most recent example, we worked with a number of parties including The Guardian in the UK on Roman Abramovich's finances. We were looking at how he'd actually secretly been bankrolling another football team in the Netherlands called Vitesse Arnhem whilst owning Chelsea. This had already always been denied and the Dutch Football Association had not been given the insurance as they should about it. In that case, Abramovich had a separate trust, which was making capital contributions into a BVI firm, which was loaning the money to another BVI firm, that was loaning the money to a Lichtenstein company, that was then loaning the money to a Belizean company, that was then loaning the money to a BVI company, that was then making capital contributions into a Netherlands company, which was then funding the football team. You can see from that network that is eight corporate layers that you'd have to follow and no one had ever got past three. These are really, really difficult things to chase, so that's on the front end. Then on the back end, I'd say is firstly the cost of investigative journalism. We have alluded to the fact that these projects are taking up to two, three years often. The project that I've been working on the longest is probably just over a year. These are really expensive to maintain and to fund and investigative journalism is just by its nature very expensive. The second is the threats mean, particularly in the UK, the legal threat of doing these sorts of stories, I'm sure we'll talk about it more. But the bar is very high to stop this information entering the public domain, especially in the case of certain individuals that it's their livelihoods at stake. Even if they are corrupt livelihoods, it's their livelihoods and they will fight tooth and nail to stop you. The level of intimidation and legal threat that comes from that is extensive.

[Corinne Woods]

Can I just ask... Irene, I'm going to turn to you for the last opening comments. Are you seeing a shift in the media environment in terms of willingness to publish? I'm interested in anybody's comment on this. Willingness to publish for any length of time? Are you seeing that shift and are you seeing a shift with whistleblowers, a greater fear because of exactly what Fergus has been describing? I don't know if any of you want to comment on either of those. Down that end, both of you want to, so whichever one wants to go first.

[Simon Lock]

I'll let you go first.

[Brian Fitzpatrick]

No, I would say, and the guys can definitely vouch for this, is what we call strategic lawsuits against public participation, really rolls off the tongue. SLAPP suits are just rampant and it's clear that, shall we say, the bad guys have cottoned on to this as a strategy. It is very disheartening to see that almost every story of note that you bring out, you're faced with this or at least the threat of this. We are trying to fight back extremely hard against that. We at OCCRP have recently become part of a project called Reporters Shield with the Van Center to try and combat this exact thing. We've also a project called OCCRP SLAPPs Back, I think. Among our network at the moment, we have 54 odd member centers. It's probably more by now, but we have 42 at least SLAPP suits outstanding. It's just, you can almost expect it when you're hitting publish on one of these things and in the buildup to these stories. They know what they're doing because all the time you're spending working against or trying to combat something frivolous like this is time you're not spending going after the things you should be going after. It's a real, real problem area in the industry at the moment and we're all trying to fight back against it.

[Corinne Woods]

Thank you.

[Fergus Shiel]

Yeah, just Isabel dos Santos and her husband I think had six law firms working for them, all pursued us. At one point, I had Elton John, Bernie Ecclestone, Shakira, about half a dozen oligarchs and most memorably, the guy behind the Mumbai bombing, his lawyer, all sending me letters. It's quite an involved business, publishing. I'll just say one other thing, Brian's point by SLAPP suits is absolutely correct, they're hideous and they're endemic. There's another thing which is not quite same, but it's going to present real problems and that's the GDPR. The GDPR is going to cause mayhem for people who hold data and the GDPR is already being used I think mischievously by bad actors to try and have their information scrubbed. I don't think it was the intention of the GDPR, but Europe faces a real problem in relation to opacity because of it.

[Corinne Woods]

Thank you. I'm going to move on to Irene. I know, Simon, you did have your microphone up, but we'll come back to you. Irene, you've been a journalist, now you're a member of Parliament, which puts you in a very unique position. When you think about these two roles, which one or how do they interface to provide a platform for fighting corruption? And trust, trust building in institutions, trust building is also something. It’d be very interested to have your quite unique perspective within this panel.

[Irene Charalambides]

Excellent question, but let me first thank the organizers for this amazing event. Also, I want to express the respect to the other three panelists for all the hard job they're doing. Many times we rely on the info they reveal in order to table bills or change things in a legislation form. Now I want to, if I may, say that I used to be an investigative journalist myself. It was quite hard, but I had the public opinion on my side. Then because of the lack of trust to the politicians, people decided to elect me in the parliament. I could never behave as a politician. The journalists, they find the information, they focus on it, they document and they reveal. The politicians, they just speak, they never care about documenting, they never support what they say with documents. In my heart, in my mind, I'm always a journalist. I've never become a politician even if I’ve served for 15 years now at the National Parliament. Here I represent the Organization for Security and Cooperation in Europe, we are 57 parliaments and we are trying to exchange good practices. I heard about whistleblowing in my country, I tabled the bill for the whistleblowers. I heard about Shell companies, my Slovakian friends in OSCPA, they've got a fantastic bill on Shell companies and revealing the owner's... Sorry, I'm the only one not English speaking here, so you will excuse any mistakes. We are trying to exchange good practices. When it comes to the media, I have this strong feeling that all governments and all parliamentarians should guard them and should table bills in order to prevent the multimillion companies of turning against them when they reveal information that might damage them. But this is the only way to do the job. These people, they take huge risks. Some of them, they had to deal with the financial crisis, they need support. The governments are not willing to support them because sometimes governments is their target. If we want to have the real information, then we have really to consider how we guard the job they do in order to continue freely to work and deliver the information. In OSC, we observe elections, as you know, also the media in different countries. Many times, we find huge violations on free expression. The journalists, they cannot do their job, they do not allow them to do their job. Some of them, they become targets. In Malta, we had to grieve for a woman journalist when she was shot dead because of her investigative work she was doing. Unfortunately, OSCPA is a consensus-based organization, so we cannot implement, but we work closely with ODIHR for human rights and other international organizations in order to find ways and support all these people who are doing such hard work. Many times under circumstances and governments that they do not allow them to work. The politicians have lots of work to do, but unfortunately, they're not willing to do it. That's the truth.

[Corinne Woods]

Apart from you.

[Irene Charalambides]

Yeah. Well, in many different parliaments, I find colleagues that are willing to fight and do it. But if we want to be honest, governments and parties, they only care about sharing power. They don't share about serving people. Though they get votes from people and they should serve the people. Most of the times, they get the power and then they serve themselves. We have to encourage free voices and we have to work together. I have to tell you that in 2020, we organized a web dialogue, journalists and politicians, partners against corruption. But there are times, and I think you will agree, that there are journalists that are partners in corruption with politicians. The financial crisis is not helping them out because governments many times provide funds for the media. They take use of this funding of the media in order to implement the governmental point of view instead of the right one.

[Corinne Woods]

Thank you.

[Irene Charalambides]

Thank you.

[Corinne Woods]

I think that's very interesting. We are in an area that people talk about disinformation, fake news and a spiraling of trust. How is that affecting each of your work and how are you playing into that environment and what role can you play? What role can governments play in that arena? I'm looking at you, Fergus, because you're nodding, so…

[Fergus Shiel]

Sure, yeah.

[Corinne Woods]

I'm interested in what you have to say about this.

[Fergus Shiel]

There's always been skepticism of the media. If you go back a hundred years, Walter Lippmann wrote about it, so he's famous American. There's constant skepticism about the media and most of it is well-founded. Okay, so there's the first thing, I'm not going to defend it to the hilt, there are problems in the media. However, this is what I will say, so firstly, the media has changed exponentially in the last 30 years. The media today is not the media of 30 years ago. It's not even the media of five years ago, the media of 10 years ago. Today you've got the internet, you've got talk radio, talk TV, you've got cable channels, there's a multiplicity of sources for information. That's the first thing. 30 years ago when man went to the moon, there was AP, the New York Times, local newspapers and one TV station or a couple of TV stations. You cannot say the same today as you could 30 years ago. With that growth in the media, that exponential growth, that tsunami of change in media, what has come effectively two different approaches to it. One is news-gathering, which is what we do, and truth-telling, which is vitally important, which is important to... It underpins every democracy. You cannot have democracies without truth, you can't have democracies without journalism, you just can't do it. This is why what we do is so important. I'm not just blowing my own trumpet, you can just look at the alternative, the antithesis. Look at countries that don't have the media, don't have democracy, and the price that they pay. But there is a second strand of the media, which is attention seeking, and it's not news-gathering and it's not fact-producing, it's quite different. What it is is it’s about commercializing attention. That part of the media has expanded at a rate of knots that the rest of us can't catch up on. That is where you have the problems and that is where it doesn't matter how you catch people's or capture people's attention. It used to be fairly harmless, it used to be just a reporter jumping out of a helicopter, even though he didn't need to jump out of a helicopter or a reporter standing outside the White House in the snow, even though they didn't have to stand outside the White House in the snow. But now, it's much more malign. Now you have entire organizations that their only purpose is to grab your attention and their only reason for grabbing your attention is to make money. This is a serious problem for the media. The corollary of that is that it makes what we do so important because it is absolutely vital. Even though it is hard, it is vital that you continue to pursue the truth because without the truth the bad guys get away with it.

[Corinne Woods]

Simon, you picked up your microphone.

[Simon Lock]

Yeah. I was just going to add to that, I guess more to complement it in that the media as a whole is not homogenous and neither are people's attitudes towards it. As well as diversification of news sources, it's also been a diversification of how people consume news. As was alluded to before, when you had a very small number of outlets and maybe one TV channel, they had the stranglehold monopoly on your attention. Now people tend to get their news from different areas, and even within one outlet, I might choose to focus on a publication's financial output and ignore its celebrity news. There is such a diversification, and I think as well, journalists always do incredibly poorly on trust indexes, indices, across the world, so do politicians. But if you actually break that down, how do people value investigative journalism? How do people value news, actual truth? There is always value for that and people will always appreciate it. It's just providing that in a package for them and delivering it to them, really.

[Corinne Woods]

Thank you. Irene?

[Irene Charalambides]

Yeah. I would like to ask the other panelists something as a politician, not as a journalist. You have revealed quite important stories, Panama Papers, Swiss Bank. How did the governments act on this information? All this info came out. Do we have any results? Do we have prosecutions? Do we have people going after those who tax evaded or those who covered funds? Honestly, do we have any actual results or you just go through all this trouble, danger, you put yourselves on the front line and then the information is out, we have the head titles for a couple of days and then nothing. What's your experience on that?

[Fergus Shiel]

Yeah. We have huge impact. Panama Papers, I think it's around 1.4, 1.5 billion dollars has been returned to tax offices as a result of that alone. Yesterday or the day before yesterday, the UK government said that it was looking at Pandora Papers. I anticipate that Pandora Papers will return much more than 1.5 billion. Today, the German government said that it had bought the Pandora Papers, so I think that they are going to pursue money. We've seen in the US alone, the Enablers Act and the Transparency Act. The Transparency Act, which is looking at ultimate beneficial ownership registries. I heard earlier today that there are multiple countries that have those and the Enablers Act is looking at lawyers and accountants and their involvement in international corruption and trying to tackle them. There definitely has been a response and this response, it…

[Corinne Woods]

Hello? We're back.

[Fergus Shiel]

We're back. However, it's…

[Corinne Woods]

Who was that?

[unknown male speaker]

It was a sensor.

[Fergus Shiel]

Yeah. The lawyers and accountants. However, there's not nearly enough of a response, and often the response is grudging and often it comes with a huge announcement at the outset and then backpedaling. That is what's happening, we to say the Transparency Act and the Enablers Act where there's great enthusiasm, there's great promises of advance, there's legislation and then it gets thwarted. Only yesterday or the day before in the UK House of Lords, but was backing policy [inaudible] political donations. It was great excitement that the Lords is behind it, and then the home office in the UK said that he wasn't going to act on it. This is the way of the push against corruption. It's a seesaw, and unfortunately there's a lot of weight on the wrong end of the seesaw.

[Corinne Woods]

Brian?

[Brian Fitzpatrick]

Yeah. I was just going to say exactly what Fergus said, too. Sometimes there can be a big splashy announcement and they're almost waiting for the, “Oh God, will these guys ever go away we can keep this back under the rug again?” But at OCCRP, we track impact like this. I think the number we're using at the moment is that our investigations have led to 10 billion, either in assets seized or fines levied, either indirectly or directly as a consequence of our work, hundreds of arrests and indictments. We do actually track it, but these things move super slowly. The Suisse Secrets project, there was a furore at the European Parliament very quickly, as you can imagine after it. We're still waiting for the full impact of that. We still have more stories actually coming out from that project still coming up because it was so massive that we're still actually digging through it. These things move quite slowly, but we do monitor it really intently.

[Corinne Woods]

We're hearing results, but relentless persistence can potentially... Sometimes that's not good in enough. I'm wondering whether we have questions either in the room or on the line. I'm sure we have a [inaudible] on that. We have about 20 minutes in the classic. Can I take a couple of questions in the room, a couple of questions online if we have online questions, I'm not sure how we're doing online, and then we'll go back to the panel, then we'll see how much time we have. You, sir, can you say who you are and…

[Aidan Eyakuze]

Yes.

[Corinne Woods]

What you represent.

[Aidan Eyakuze]

Thank you.

[Corinne Woods]

If that's possible?

[Aidan Eyakuze]

Aidan Eyakuze from Twaweza in Tanzania in East Africa. Just a quick couple of comments and just to get your sense. First, great admiration for the work that you do, bravo. How safe do you feel, you sitting up there, the work that you're doing physically, your personal safety? The second question is there a silver lining in the dark cloud of whistleblowers getting arrested and the silver lining being that it might actually build trust in the stories for which they're getting arrested? Are the audiences reading them saying, "They're arrested or they're persecuted because what they're saying is true," is that true? Is that something you can use or is that just wishful thinking? Thank you.

[Corinne Woods]

Thank you. Back right-hand corner somewhere, I saw someone... Yes, you sir. Then the woman there, so we'll go one, two. If that's possible?

[Daniel Eriksson]

Yeah. Thank you. Thanks for the panelist, you're doing an absolutely amazing job. Daniel Eriksson of Transparency International. I think Fergus mentioned it, that the work that you do, and Irene's question to the rest of you highlighted that as well, that there's a need of translating these findings into action and a lot, but the Transparency Act and Enablers Act and all the confiscations of money. But my question would be to you, all panelists, what more can we do in order to ensure even maybe from design of these investigations that we actually achieve something that can be translated into advocacy and change? Then a second question, actually to Corinne, because Corinne, you're the new face to most of us in this audience, I believe. I would wonder from a World Bank perspective, what do you think the perception is in the global south of citizens? Is the World Bank a force against corruption or for corruption?

[Corinne Woods]

Thank you for that question.

[audience laughs]

[Daniel Eriksson]

I can't hold myself back in having some tough questions.

[Corinne Woods]

I really appreciate you, thank you.

[Uzma Barton]

I'm Uzma Barton from Cadmus Group. I have two questions. One, you mentioned about the BOT registries and Nigeria is one country which has actually made the registry published. I'm wondering if you have your army of journalists getting ready to use that information and make it more and translate it for the general public to consume and then for other agencies to take some action on that. I'm also wondering if you are providing any training to the journalist on skills? How to follow finance, for example. Because all of these... Especially when we are talking about developing countries and journalists do not have those trainings or opportunities to have those trainings. Are you or donors from the World Bank side as well, the donors are providing any training for such people who want to do these things? Thank you.

[Corinne Woods]

Thank you. Did someone just put his hand up over there? Did you put your hand up? We'll take one more question and then we'll go to the panel.

 

[Roby Senderowitsch]

All right, thank you. I'm Roby Senderowitsch, I work here at the World Bank. There is this guy who goes to buy the newspaper. He says, "How much is it?" They say, "$3." He says, "I give you $1." He says, "No, I tell you it's $3." He says, "How do I know? Look, it's printed here, it says it's $3." He says, "Are you going to believe everything that they print there?" This was a joke, but this is about the…

 

[audience laughs]

[Corinne Woods]

Is that the World Bank joke?

 

[Roby Senderowitsch]

This is maybe an Argentine joke. This is about the lack of trust in society about everything today. People don't trust their politicians, their institutions, they don't trust the media either. Unfortunately, they trust many times the bad leaders in society. As journalists yourselves, how do you deal with this lack of trust or the perception of lack of trust or this allegation of fake news in your daily jobs?

[Corinne Woods]

Thank you very much. I'm not going to take any more questions, I'm also aware that we have about 10 minutes. What we'll do is run through everybody with answers to questions and also closing comments. You can pass the question on to the next person if you like. Let's start right down at the end with Simon and we'll work our way through. Simon, pick up any question you like.

[Simon Lock]

Yeah. I was trying to follow them as we were going along. I think I can combine two of them about how we can facilitate change and improve the environment for journalism and also about relative safety. I'm fortunate in many ways, very privileged to be in the UK where actually physical safety of journalism is very high. That is certainly not the case in many countries in the world. That said, and it's not in any way comparative, the other side of the risk, the legal risks from it. They're not going to shoot me, but they might try and financially ruin me through lawsuits. I'm protected by my organization and other mechanisms, but for individual journalists in the UK, that is the biggest threat. I think in terms of trying to bring about change, it's not just about following up on the journalism. That is very important, we've heard huge impact that these investigations have caused, reluctantly or otherwise. We also need to focus on the framework by which journalists can undertake their roles and focus on the public interest in allowing them to pursue their inquiries without fear or favor. There are certain judgements, there are certain movements that should make us encouraged. In the UK for instance, they're talking about laws against SLAPPs and how we can protect public interest journalism, however, there've also been downsides in terms of the way we work. There's been law cases like ZXC versus Bloomberg, which has limited the scope by which we can follow up on people that are being, say, investigated by the police and their rights to privacy as a result of that. Also, much comment has been made on, say, in Luxembourg where the Court of Justice for the European Union has essentially struck down public access to UBO registries. It's not linear progress and that's where we need to focus so we can keep uncovering more scandals. [inaudible].

[Corinne Woods]

Thank you very much. I'm going to quickly touch on the question to me. I would go to the AidData monitor, which is I like to have independent data. Let's go to that AidData monitor and look at how the World Bank is perceived against other organizations. I won't give you the chart because I can only think of the chart in terms of level of influence and trust, plus the country opinion surveys. Those are two pieces of research that you can take a look at and look at country by country, also that overall independent monitor. Let me turn back to Brian. You might want to point to which questions you are answering.

[Brian Fitzpatrick]

Like Simon, I might have a stab at a two for one maybe.

[Corinne Woods]

An amalgam question.

[Brian Fitzpatrick]

Yeah. Similar as the gentleman said about safety, I live up in Canada at the moment, so I don't have too much to worry about. But we do at OCCRP, we focus heavily on the safety of the reporters at our member centers and our partners, and emphasis on training them to do investigations in regions that are a lot more hazardous than those that some of us are operating in. That might be how to sequence an investigation so that you're getting to the end point with the maximum safety possible. How to put a project together, how to write a story, how to chase financial records, all of that. We do have a heavy emphasis on that, safety being a big one, and actual practice training being another. The gentleman from Argentina, when he asked again about fake news, I'll put it back on fake news. Fake news is almost being used against us now. We're being accused of it, but we're also trying to combat it. We recently had a story about a reputation management firm based out of Spain that was working on behalf of clients who wanted to cleanse their own reputations online. They were using literal fake news stories that they were writing themselves about their clients to seed these everywhere and using that as one technique and then also issuing fake copyright infringement requests as well to have stories taken down. We did a project on that called Story Killers recently. In one sense, we are being labeled... The post-2016 era is this fake news, but we're also working to combat it in real time because people have cottoned on to that it is a tool that they can use to their own ends because nobody believes anything anymore in many instances. They know how to muddy the waters and that's another frightening element.

[Corinne Woods]

Yeah. Irene, I don't know whether you want to answer the safety question or some of the others?

[Irene Charalambides]

Well, I would like to answer to Roby’s question. He's absolutely right, people do not trust the system anymore. They do not trust institutions, they do not trust the politicians, they do not even trust the journalists. We have to act on it because all this behavior undermines democracy. As a politician, I had a lot of support from ex-journalist colleagues because as I said before, I continued working as a journalist and I had sometimes to take things outside my own country. I had accused the judges of my country to GRECO and GRECO came to Cyprus and confirmed all my accusations. I had journalists supporting me in doing that, otherwise I couldn't have done it. Then I accused the deputy attorney general of corruption, I was on my own. He was threatening me, I had journalists supporting me, otherwise I wouldn't have done it and many other cases. We need strong journalists, we need decent people working for media, people who will not be bought off from anybody, from multimillion companies, from governments. We have to support what they're doing, believe in them and try to act on the info they deliver. Also, when it comes to whistleblowers, people were coming to my office and they entrusted me with information. They were panicking because we're a small country and if their name would come out then they might lose their jobs or end up in jail. That's how I thought to table the Whistleblowers Bill. What happened? You know that it took the parliament six years to vote on this bill because they didn't want people to come forward. Even when we voted the bill, a year after, because we voted for it May 2022, people hesitate to trust the system and give information either to politicians or to the press. We have a lot of work to do, but I think united, we can do it.

[Corinne Woods]

Thank you. Fergus?

[Fergus Shiel]

I'd finish with optimism, you've got to be optimistic if you're doing this job. Don't give up. In relation to can you do anything? Of course you can, you can do lots of things you. Because there's so little you have done already, if you do something, it'll improve. Just get up every morning and try and do something and it'll get better. The answer is transparency, fund your anti-money laundering initiatives. Train journalists. We've trained thousands of journalists at ICIJ alone. You've got the internet, the internet's the most powerful thing in humanity. You can move data between your countries within seconds, it used to take you weeks to get a news story across from London, they'd come on a boat. If you put your mind to it, if you exchange data, if you fund your anti-money laundering initiatives, if you tackle the lawyers and the accountants who enable this stuff, you can change the world. We've changed the world, there's no excuse for you. You can do it.

 

[audience applauds]

[Corinne Woods]

I'm going to ask you each to close, you've spent the last hour sharing your time, your insights, your experience with this audience and the online audience. In the best of all possible worlds, what would the change that you have made by spending your time doing and what would people who've been listening to you do as the result of having heard from each of you? I'll start with Brian. The best result of you spending an hour sitting up here answering questions?

[Brian Fitzpatrick]

I think the best result I could hope for is that people are more actively curious in their day-to-day lives about what's going on around them. There is so much dark money and it's infiltrated in everything we do, and a lot of it is sitting there in plain sight. I think we all need to make a conscious effort to realize this, that corruption and criminality, it feeds global inequality, it is worth chasing down and rooting out. It's killing all of us on both sides of the world, and it's not just certain regions. What's happening in Eastern Europe is impacting money being siphoned off and being put into property in North America, that's killing people that are trying to buy a mortgage or whatever it might be. London is infested with dirty money. Just for me, it's realizing what's going on around you, realizing the people that are behind it and asking questions on a daily basis.

[Corinne Woods]

This audience that's interested in these subjects, really picking up on that, and if one or two people pick up in that relentless, persistent investigations, that will be helpful?

[Brian Fitzpatrick]

Yeah. I think there is…

[Corinne Woods]

Or listening harder to what you guys are then…

[Brian Fitzpatrick]

There is a growing awareness, like the Panama Papers for example. Everybody knows about the Panama Papers, there's been a movie. I think before that happened even, people's jaws hit the floor when that came out. There is a growing awareness. All of our readerships are growing, there is a huge appetite for this type of work. Sometimes it can be called inside baseball, but it's inside baseball by necessity. You're getting down into the nitty-gritty, so it's going to be slightly complicated, but give the work a bit of patience that it deserves. I think you'll find it rewarding.

[Corinne Woods]

Thank you. Irene?

[Irene Charalambides]

I think that we all share same experiences more or less. By listening to one another, we realize that something like that happened to my country as well. By sharing experience, by knowing that there is someone out there ready to listen and help. I have to tell you, honestly, sometimes I was desperate and I had to turn to other actors outside my own country. If in Cyprus, wouldn't listen, BaFin in Germany listen to me. I don't know if we have any German bankers here, but I was behind the case of Commerce Bank and they were fined for over a million for structured bonds working with someone who manipulated banks in my own country. In Cyprus, they didn't want to listen. I went to Germany and BaFin listened, so BaFin called Cyprus and said, "Guys, what the hell are you doing there? You should start investigating." I think we are coming from many different countries, there is somebody out there who will listen, who will help us for transparency. It's a war for transparency. We fight for transparency.

[Corinne Woods]

Thank you. Simon?

[Simon Lock]

Thank you. I'll be quite quick, just to reinforce the point that supporting investigative journalism is supporting freedom and it's some more supporting democracy. That support can take many forms, it can be financial donating, funding or just buying a newspaper, frankly. It can be political support, putting these in front of parliaments or leveraging this for politicians. It can be technological, I've spoken to numerous people just here about the products that they're creating to enhance transparency. Giving those tools to journalism, that is of huge importance and it can be legal. These are all incredibly important to supporting our work and making the world less corrupt.

[Corinne Woods]

Thank you, Simon. Fergus, you have the final word.

[Fergus Shiel]

Thanks. Simon's really clever, he's a really clever guy. I've seen him in action, he can do stuff that's just amazing. I worked with another guy who's super clever called Spencer Woodman, he's just a genius. He's unbelievable, a young guy from North Carolina. He can look at documents and find stuff that I could spend years doing and I'd never find. One of the things he discovered was in this Jersey trust, [inaudible] trust in 11.9 million documents, he found a Jersey trust. That in itself is amazing. In that Jersey trust, he found a whole lot of Cambodian artifacts, the heritage of Cambodia, the antiquities of Cambodia, the thing that the Cambodian people treasure most. They were looted after the Khmer Rouge ran through the country of killing millions. One of the principle guy who stole it was a guy called Dynamite Doug Latchford. Dynamite Doug pinched a whole lot of artifacts, and lo and behold, they ended up in institutions around the world, including the Met. This week, only yesterday, the Latchford family reached a deal with prosecutors that they would pay 12 million bucks and give back some of the looted artifacts. The Met in the recent weeks has appointed four people to go through its entire catalog because of Spencer Woodman and Malia Politzer, another reporter we work with and others, reporters in Nepal and India. Because of them in the last nine months, more has happened on antiquities and looting than had happened in decades. This is because of journalism, because the sharing of data, because of advocates. This is just a tiny example of what you can achieve in the space of two years if you put your mind it. You can change the way that international institutions look at the holding of antiquities, you can re-gift to the people of Cambodia, their heritage. You can change the world if you share data, if you take it seriously and you work together and you fund it. This is why I think it's nice to be here at the World Bank because you can fund it.

[Corinne Woods]

I'm with that. Thank you, Fergus. Thank you, this has been a fantastic panel, really insightful. Thank you very much and thank you for your time. Thank you.

 

[audience applauds]

 

[Lisa Miller]

Thank you very much. I actually had the Integrity Compliance Office here at the World Bank Group, and the bulk of our work is actually with entities that have been found to have engaged in fraud and corruption in World Bank Group-financed activities, have been sanctioned and have conditions imposed for their release from that sanction. We work very closely with private sector companies. This topic is really a passion of mine, and I'm very excited to be here with some excellent colleagues and speakers. Joining us are Martin Benderson, who is the Associate Director for Collective Action and Partnerships at the Maritime Anti-Corruption Network, also commonly known as MACN, Cristina Ritter, who is the Head of Anti-Corruption and Governance at the UN Global Compact. She previously was with UNODC. We have Frank Brown, who is the Director of Anti-Corruption and Governance Center at the Center for International Private Enterprise. Finally, we have Jeff Sallett, who is a partner at Ernst & Young, working in their Investigations and Forensic Group. Good mix of speakers representing different types of stakeholders in the anti-corruption fight. This panel, we really want to focus on the role of private sector companies, the role that they can play in setting good examples, in fostering collective action, in promoting integrity compliance principles and good business practices. With that, we're going to jump right in with some questions. We would like to start with Frank. So, Frank, one of the biggest challenges on the horizon…

[Simon Fowler]

[inaudible]

[Lisa Miller]

Oh, we are going to run a poll. Absolutely. Okay. So…

[Simon Fowler]

Same procedure as yesterday. Take out your phones, take pictures of your neighbor, and you'll [inaudible].

[Lisa Miller]

So should we go ahead and start with the questions, or do you want to hold for the poll? Yeah.

[Simon Fowler]

We'll start with [inaudible].

[Lisa Miller]

We'll start with... Okay. All right.

[Simon Fowler]

Everybody ready?

[audience member]

Yes.

[Simon Fowler]

Okay. Let's go, please, Mark.

[Lisa Miller]

I don't think we have our phone. Oh yeah, one of us. Jeff has his phone. So Jeff can participate. So...

[audience member]

There we go again.

[Lisa Miller]

Yeah. Nothing's coming up.

[Simon Fowler]

While we're just waiting for the poll to come up here, don't forget, we have interpretation headsets at the back for the three languages as well.

[Lisa Miller]

Okay. So as the results start coming in, “what do you believe the private sector contributes to the anti-corruption discussion?” The first response, “the private sector is a net positive force”, 43%, “the private sector is a net negative force”, 21%, and 36 respondents have come in as neutral on that question. So hopefully by the end of this hour, we're going to have a lot more people answering A. My personal view is the private sector is a net positive force. You cannot fight corruption with only one side of the equation. I believe, and I believe the fellow panelists here believe, that the private sector has a key role to play in this discussion and in these efforts. We already converted one, we're up to 44%. There we go. With that, we'll jump into the questions. 45, we keep going. I'm very convincing, apparently. So, Frank, first question for you. One of the biggest challenges that folks see on the horizon in the global anti-corruption community is likely to be the reconstruction of Ukraine. Estimates say that it may cost upwards of one trillion US dollars to engage in that reconstruction effort. From your perspective, what is the role that private sector can play in that reconstruction effort and in helping to ensure that the monies are used with integrity and are not subject to corruption? You're an NGO working with the business community in Ukraine. What are you seeing and what are your thoughts? Thanks.

[Frank Brown]

Thanks, Lisa. It's great to be here and see lots of familiar faces. This, I think, is a good question for me to start the presentation, answering both because the war is very topical, especially as we saw over the weekend with the developments in Russia and also because the role of the private sector in Ukraine has helped shape my NGO's approach to anti-corruption in the private sector globally. I'll give a little background on that so that this makes more sense than it might otherwise. Then I'll get to the results of a survey that we have in the field in Ukraine right now with small and medium-sized enterprises. My NGO, the Center for International Private Enterprise has been in Ukraine for about 30 years. We opened an office there maybe 12 years ago. We were on the ground and quite involved back in 2014, when you had a series of street protests and some violence that led to the overthrow of President Viktor Yanukovych. This was especially interesting to us as an NGO that focuses on the private sector and corruption because of the role that SMEs played in those protests, both because small business owners were taking part in the protests on the streets, but more significantly because they were bankrolling them. They were paying to support the students and pensioners and other folks out there who camped out and took part in what eventually led to a whole series of reforms in Ukraine and two subsequent governments that pushed forward in fits and starts an anti-corruption agenda, to the point now where in Ukraine, you have an impressive anti-corruption architecture, partially to the credit of the IMF, which put in place a series of contingencies that require the Ukrainian government to stand up these institutions, sometimes quite reluctantly but they did it. Whave a situation now where Ukraine again is the focus of interest for my NGO, both because of the war and because it's a chance to see if, again, the small and medium-sized enterprises can step up and play a positive role as we look towards a reconstruction. The reconstruction, as Lisa mentioned, could cost up to one trillion dollars. It has tremendous potential for corruption, for the kleptocratic and oligarchic structures that are still in place in Ukraine benefiting more from the reconstruction than other entities, and for undermining the west's attitude towards that process, which in the end would be profoundly destructive. Tetting the corruption piece of the reconstruction is quite important. The other reason it's quite important is from a democracy point of view. My NGO has an emphasis on strengthening democratic institutions, not just fighting corruption. I'll talk a little bit about the results of a poll we have out, a survey we have out. We've got about 250 respondents so far, SMEs all over Ukraine, and the results are interesting, in part because they show the degree to which these smaller businesses want to take part in the reconstruction. They want to team up with western businesses, mostly EU businesses, in getting these big procurements that are going to come down to do all the work necessary to restore the country. That's significant because those western companies, as you hear, I think, from other speakers, are subject to pretty rigorous anti-corruption compliance laws and face reputational risk, face criminal risk if they violate those laws. The Ukrainian companies are poised to take part in this overall approach, 88%. The other aspect that was interesting from this survey is that there's a remarkable degree of sophistication by these SMEs when it comes to anti-corruption architecture in Ukraine where they can turn to report wrongdoing, what sources of redress there are. That even extends to global anti-corruption trends, which I think you'll hear from other panelists about. But, for example, one of the best ways to motivate the private sector to refrain from corruption is something called positive defense. The UK Bribery Act is the best example of this, but it's a clause in an anti-corruption law that holds that if a company can show, as it's being investigated, that it has in place adequate procedures for combating corruption, that's a mitigating factor in the investigatory and prosecution and enforcement process. So 31% of Ukrainian companies know about this even though it doesn't exist in Ukraine, so quite sophisticated. Then, finally, I'll give you one more figure that comes out of this Ukrainian survey that's perhaps a little disconcerting, and that is that the main reason... 66% of people say the main reason for upholding anti-corruption measures within a company are moral reasons. They're social norms. They're not fear of enforcement, it's just doing the right thing. That's how they're articulating their main reason. The second reason is reputational risk, 40%. What that says is that small and medium-sized businesses don't fear getting caught. They fear being shamed, and they want to do the right thing for patriotic or other reasons. Again, presenting this snapshot in a fairly narrow window of the anti-corruption landscape globally, because it has ramifications, I believe, for the work that we, the anti-corruption community globally do everywhere, because it points to a segment of the business community that typically is highly motivated to press for political change that's necessary to put in place anti-corruption reform. They're not happy with the status quo, they want to grow their businesses, and they're ready to take risks to do that, sometimes political risks. Multinationals, big, big companies often aren't. They're often happy with the status quo. They're ready to comply, do what's necessary, but they're not looking for radical change. I hope that wasn't too long-winded and gave you some insight as to what we see as the bright spots for the private sector engagement.

[Lisa Miller]

Thank you, Frank. Frank talked about laws and social norms and motivators for companies to potentially not engage in fraud and corruption activities. I'd like to turn to you, Cristina, because the UN Global Compact takes a similar but slightly different approach in that it commits member companies to standards of behavior. It's not a law, it's not a social norm, but it's a standard of behavior to which these companies commit in various areas, human rights, environment, labor, and anti-corruption. So, Cristina, how does the UN Global Compact disseminate good practices in a way that firms are really encouraged to take them on and to make these commitments? Thanks.

[Cristina Ritter]

Thank you. Thank you for the question and thank you for your attention and for inviting me to this event. Maybe I'll start by explaining what the UN Global Compact is in case some people don't know. It's basically the UN office that works with the private sector. We are the largest corporate sustainability initiative in the world with over 22,000 participant companies in 162 countries. Like you said, the companies that become members of the UN Global Compact, they commit to higher standards in those four areas, including anti-corruption and other cross-cutting issues such as governance and gender. The way we make sure that good practices are identified, are also disseminated is through our value proposition, which translates into four engagement opportunities. The first one would be to connect, then to lead, learn, and communicate. Let me explain a little bit of each of these four pillars. Connect, the first one, through this, we want companies to learn from each other, to work together, but also to work with other stakeholders because, as you said in the beginning and also as established by the UN Convention Against Corruption, we need a multisectoral approach to effectively tackle corruption. First we want companies to work together, to learn from each other, and we do this through our local networks. Our local networks are established around the world. Basically when the participant companies of one country, they come together, they organize, and establish a sort of association there. From headquarters, we work through our local networks to, for example, convene companies to events or to roll out a training. Also, vice-versa, when local networks want to engage in some sort of anti-corruption initiative on the ground, they would ask for our guidance, our expertise. We meet with those local networks twice... No, like every two months, regularly through our working group on governance and anti-corruption. Our communication with companies goes mainly through that approach. But also, like I said, we connect companies with other stakeholders. We do that by participating in these important conferences, trying to amplify the voice of the private sector in the global anti-corruption arena. We have regional hubs also. These national local networks and the regional hubs, they help us to have a sense of what's going on on the ground so we can also produce guidelines at the global level that makes sense and that respond to the local challenges. We also have two major events this year. Our annual flagship event is a Leaders Summit. It will take place in September, and there is going to be a session on business integrity. We are also working with the UN Office on Drugs and Crime to co-host a private sector forum at the 10th session of the Conference of the State Parties to the UN Convention Against Corruption in December. Those events, that connection leads to the second engagement opportunity, which is to lead, because once we know what the priorities are at the national, regional, and global level, when we've identified that and we create an agenda of, like, these are the three topics we need to address this year, then we can create a think lab. That's another one of our mechanisms where we convene companies to discuss about innovative ways to address those priorities. This leads to, normally, guidelines or tools that we could apply at the global level, and then adapt through our local networks to the realities on the ground. That and we also want our companies to lead by participating or amplifying their voices in policy advocacy. So, again, by participating in these global events, but also at the national level through collective action. Once those guidelines and tools are ready, we will disseminate them through our learn engagement opportunities. The learn would be to translate those guidelines into capacity-building activities, trainings, webinars that we call deep dives or e-learning modules or accelerators, which are the trainers' programs, basically. That is our way to, I guess, train or help our companies to translate that into practice. Finally, the last pillar is communicate. That is a way to hold them accountable, because companies that are participants of the UN Global Compact, they have the obligation to report every year on their progress. It's called the CoP, Communication on Progress. What we are currently working on is to turn that mechanism into a digital one. Companies have to respond to an online questionnaire, and that will enable us to collect data that we could then use to make evidence-based decisions on our programming. Then we come full circle because, once again, we know which priorities to address. I would say, in short, maybe we need to connect companies, connect with other stakeholders. We need to find priorities, to find an agenda because resources are not unlimited. We need to be innovative, produce those solutions maybe at the global level, but also translate them into the realities on the ground. And we need to hold companies accountable, I would say. Thank you.

[Lisa Miller]

Thanks so much, Cristina. Listening to Cristina about companies connecting, companies involving other stakeholders, companies pursuing an agenda, companies being held to account and holding others accountable leads very nicely into what the Maritime Anti-Corruption Network does. So, Martin, MACN has a very interesting background and is a strong example, in my view, where an industry has really taken the initiative to work collectively to address head on anti-corruption issues that were being faced by that industry, and in this case, of course, the maritime industry. If you could tell us a little bit about MACN, its origins and the working model, and perhaps some examples, Nigeria, Argentina, or others, please. Thank you.

[Martin Benderson]

Yeah, thank you for that, Lisa. I was quite excited yesterday when there was a call out during one of the panels for more multi-stakeholder partnerships to collaborate collectively to address corruption. I'm glad to be here on stage with a number of examples of those kind of platforms, including my own initiative, the Maritime Anti-Corruption Network. Let me start by telling you the story of why we actually exist and what we do. The Maritime Anti-Corruption Network, it's an industry-led initiative where the maritime and shipping industry collaborates with governments and also the civil society to eliminate corruption in maritime trade. This was an initiative that was established about 10 years ago by a small group of shipping companies who wanted to take collective action against corruption challenges in their industry and the maritime sector more broadly. Why did this come about? Well, I think part of the answer is that there was a tightening anti-bribery laws entering into force at this time. You had the UK Bribery Act making facilitation payments illegal. You also had the UK Bribery Act encouraging companies to take collective action as one of their adequate procedures. I think what also matters here was that these companies who wanted to do something collectively, they realized that we can't solve this on our own, even if we are some of the largest shipping companies. There was very much an ingrained culture and expectation to give out cigarettes, boxes of scotch, and even money as you pass through ports worldwide and pass inspections with your ship. This was a shared expectation from both government inspectors, but also captains in the industry at large. Changing this culture is not something you can do overnight, and it involves a dialogue with your suppliers and peers and so on. That's why the need for a collective action platform came about. Over the years, we have grown quite rapidly. We now have close to 200 companies from the shipping industry as members to this initiative. As a collective, we represent more than 50% of global trade being transported at sea. These numbers matter because they give us a certain leverage. When we enter into dialogue with governments and port authorities and other stakeholders in the port, they listen to us. We have many ships going in and out of a specific port when we act collectively, and fairly quickly, we can actually have an impact on these ports if we collectively coordinate an anti-corruption campaign by starting to reject and say no to corruption and coordinate our messaging and policies, so to speak. This is something we used in places like the Suez Canal and other countries with really good results. Let me speak about how we actually are eliminating maritime corruption. We do this by looking at the supply and demand side of corruption, and the supply side being here, business, and the shipping industry who may give in to give out gifts and bribes as they go through port inspections. When you join MACN, there is an expectation that you need to improve how you address compliance and anti-corruption internally. Our members are being supported with certain anti-corruption tools such as training, risk assessment modules, due diligence tools that is targeting the captain, senior management, and so on, to really make sure that they can anchor anti-corruption across their operations and across their organization, including also the frontline, meaning that the captains and the people on board the ships who are actually the ones usually facing corruptions in the port. So this is really important. Membership comes with an expectation to also improve on your compliance journey. We measure performance of these members on an annual basis and if they do not improve, there's actually the option to actually kick them out of the membership. This is a way for us to really raise the bar on compliance across the industry because our membership is fairly large. By improving compliance in a company, it also has knock-on effects in their supply chain. Also, local players are being affected by this and so forth. We're trying to prevent companies from giving in to giving bribes just out of old habits or lack of internal policies and support and so forth. This is really important to work with the industry, but obviously we can't just have fantastic compliance programs in companies to address corruption. We also need to work in the countries and ports where corruption is a real challenge. This is why we have implemented what we call collective action initiatives in places like Nigeria, Ukraine, Bangladesh, India, and a number of countries where we are in collaboration with the government, with the port authority, custom, immigration, and so forth, as well as the local supply chain and also civil society partners who are facilitating and leading the dialogue with the public and the private sector on anti-corruption and how we can actually improve the situation in that country and in a specific port. These initiatives is something we worked on for the past 10 years, and they result in things like improved regulation or more transparency around the regulation, improved accountability mechanism, where the companies can actually appeal against decisions, and also awareness training and so forth to really try and strengthen the accountability of the whole sector, so to speak. None of this that we have achieved today would've been possible before without the backing of the industry, of course, but also that we've been welcomed by many governments, also very competent and excellent civil society partners who lead the work on the ground, and also international funders and donors who support many of these initiatives and allow us to have more long-term engagement and work with regulatory reform in certain parts of the world. All this is very important. By doing this, we try to also address what we call the demand side, where you have bribery demands coming from the public sector. The final thing we do is also to work on policy advocacy. Here we have an engagement at the International Maritime Organization, which is the regulatory body of shipping. We've been working there with a number of member state to have IMO start discussing anti-corruption, which hasn't really been discussed before. Last year, we had, for the first time, the IMO and all the member states of IMO, they approved a guidance document saying what governments and also companies should do to actually address and be successful in fighting corruption in ports. These are some good practices of policies, procedures, and systems that governments and also companies can put in place to eliminate opportunities for corruption. Having this IMO document is, of course, a very good conversation starter and door opener for us as we go into new countries and new ports and try to get their attention to this quite important topic. I can also say a few words about our work in Nigeria, just to give you some examples of how we actually work in practice. Unfortunately, our local partner from civil society, Soji Apampa, couldn't be here today. He's really the hero who had been driving this initiative, so I really hope I can do justice to what he has achieved here. But we started in Nigeria about 10 years ago, as we saw it as a very challenging country to operate in as a shipping company. One of the findings, as we entered Nigeria together with the UNDP, was to realize that the governance around the port sector was not good enough. There was no codify procedures on paper. Inspectors didn't actually know what they should be doing during inspection. There was no handbook, there was no standard operating procedures, and there was also a lack of accountability mechanism to appeal against decisions, ethics standards, and so on within various government agencies. Together with our partners from the industry and civil society, we sat down with customs, immigrations, port authority to develop these documents, to develop the procedures, develop the code of ethics, and put in place a grievance mechanism. Obviously this is something that was owned by the Nigerian government, but we were there to support that process. After a few years, we saw great progress. We saw that our initiative was endorsed by the Vice President Office in Nigeria and things really picked up. We had a fairly well-functioning governance framework with procedures in place, transparent procedures, we have appeal mechanism, and so forth. But the challenge we had now was the industry wasn't changing, because the industry was just doing business as usual and they didn't even know that things had changed in Nigeria, because their perception was Nigeria is still very corrupt. We realized we need to do something. This was in 2019. With some funding from the Danish government, we started to elaborate on a new concept. We called it an anti-corruption help desk, because now the government had an excellent grievance mechanism where you could actually call in and say, "I have a problem here. Can you do something?" But no one wanted to do that. Basically they just laughed at us and said, "Why would I report to the government if I have a corruption challenge?" I will be penalized. Again, I think this comes back to the topic of this session or the whole event is it's trust. There's a lack of trust here with having private sector report into government. We realized we need to bridge that deficit in trust and be like a messenger and the go-between here. We established a help desk where companies can report into us when they have a corruption challenge. We can then be the messenger and go with that to government and have government resolve those issues. How this works in practice is that when the ship arrives in Nigeria, they send us a notification saying, "I'm on my way to Nigeria. Stay alert." If there is a challenge, challenge being if there is an inspector coming on board asking for money or anything else, they can pick up the phone or WhatsApp us and say, "This is the situation. What should I do?" When that happens, we do three things. Firstly, we say, "You should stand your ground and reject this." Secondly, and this is important, we say, "You're not alone on this," because being alone, that's when you're vulnerable to corruption, especially when you're in a foreign country very far away from your headquarter. That is when you give in and just give that money because you would like to get out of that port. That's what's really driving you here. We say that we are backing you on this. Then, thirdly, we escalate. We call the government body in Nigeria in charge of oversight of the port and compliance in the port and say, "This is the situation. What can you do?" This was launched in 2020, and we have until date over 800 ships who've been using this mechanism. Out of this, we have about 120 incidents, incidents meaning a request for a bribe. 99% of those have been prevented. They have been resolved, meaning that no corruption was made. There was no transaction being made because we escalated and the inspector actually withdrew and said, "This is not something I want to do." We have two incidents that hasn't been resolved, but overall we see a very good success rate. Before we started, it took seven to 10 days to resolve a case like this in Nigeria. Now we have an average resolution rate time of one to eight hours. Time is money in shipping, so now we give an option to the captain not just to do the right thing, to say no and report corruption, but you're actually saving money, because you can actually get out of that port faster. In monetary terms, it's a saving of between $20,000 up to $150,000 per port call, so for each ship going in and out of port. There's clearly also an economic incentive for reporting. We're now at the stage, this is three years' work, where the trust has been so solidified that the companies are calling the government directly. They're picking up the phone and they're calling the Nigerian government and saying, "I have a situation here. Can you call us?" We're still there monitoring and we're still there supporting, but we really have been able to bridge that trust challenge and have the direct dialogue with government. Secondly, government is really taking this to their heart. They're using our data to understand what are our challenges, how can we learn from the private sector? None of this would've been possible if the government wouldn't have invested, of course, heavily in compliance and oversight, because this is just a help desk. This is just us providing and messaging oversight mechanism. The real work is done by the government. We're there just to call, monitor and convey the message, so to speak. This is a mechanism that we started in Nigeria. We have now replicated this in the Suez Canal, in Ukraine, and also in India on a similar model, working with civil society, working with government, and working with the private sector, and we see great opportunities also using this in other parts of the world.

[Lisa Miller]

Thank you so much. In my mind, that net positive response is ticking upward, hearing these stories and these different initiatives from the panelists. Martin said something that resonated with me. “Being alone is a challenge.” I think that when we talk about the role of the private sector, when we talk about collective action, I think that's something I will keep in my mind, because if you are the one guy standing there saying no and everyone else is saying yes, that is a very difficult place to be. That's where these types of initiatives, the standards to which companies commit, such as UNGC, the organizations such as MACN that are taking a stand collectively, I think that is a takeaway that I hope we all take with us after this session. Martin also talked about the efforts MACN has made with the government, so the impact that the private sector can have in trying to promote change at the governmental level. With that, I'd like to turn to Jeff, because, Jeff, you come at this from a unique perspective among the panelists because you spent many years at the Federal Bureau of Investigation here in the US, working on corruption issues. You are now with Ernst & Young, EY, so a private sector company, but also a private sector company working with other private sector companies. In addition to learning a bit about your work in those capacities, super-duper easy question for you, what is corporate responsibility for the anti-corruption fight? Thanks.

[Jeffrey Sallett]

Good morning and thank you very much. Listening to my fellow panelists here is really to me, as somebody who spent 25 years on the enforcement side of this, incredibly encouraging. I say that because anti-corruption is a team sport. Not only is it a team sport, but it is critical to global national security and human rights. When you talk about what corporate responsibility is and what our collective responsibility is, a line I used when I was in the FBI was “corruption leads to lack of competence in governments, lack of competence in governments lead to failed states, failed states lead to human rights abuses and national security issues.” When people ask what's my responsibility, and I can say the United States can be very United States-centric, so I'll say that as an American. What's your global responsibility? The answer is to lead from the front. A question I would ask folks, and really, I think important when you hear what my fellow panelists have said, is... and Nigeria was brought up a couple of times by, I believe, Martin and Frank. I would ask somebody in the United States, “would you be offended if a United States senator took a million-dollar bribe for business?” The answer is of course I would be. My line would be, “would you be any less offended by the fact that a US company paid $10 million to bribe a Nigerian senator?” Of course, the response can be different depending on the people. We have the positive aspect, which is the global anti-corruption fight and the team sport and the effort, but right now national security, and really the whole civil world order, is dependent on the team, meaning private sector, meaning NGOs, meaning governments, to be looking at this across the board. Something Martin said, which I think is critically important, is this whole idea of supply side and demand side. From an enforcement perspective, the way that the US government used to enforce FCPA, was really going after the supply side. The method that the United States government uses now is to partner with other governments, again, much like is being talked about from the panelists, to attack the demand side so that it's not just a supply side issue. Wwhen you're talking about corporate responsibility, corporate responsibility is really from both sides. It's from the supply side and the demand side. Something troubling that Frank said, to me it's both happy and troubling, is that there was no consequence worry out of the folks in Ukraine when we have a potential one trillion-dollar rebuild coming. That's something that I think people will do things for the right reasons, which is great, but then we also need the idea of holding people accountable when they do not do the right thing. To me, corporate America can do that from a positive perspective by having great compliance programs, by supporting NGOs that are fighting corruption, and then to be a bigger player on the world stage, that they can also be the negative. That corruption is the cost of doing business in the area where we are. That's something that we all constantly need to be attuned to and making sure that people are working together to hold those folks accountable when they do not do the right thing. I think something President Biden early in the administration actually came up with public corruption and corruption as a national security priority for the United States. I think people often miss the beat when it comes to corporate America because people can be very... and I say this, corporate world, can be very profit-driven versus actually the social side to it and the results of failure to be part of the corporate society. When we talk about national security, national security itself is a team sport. If people think that we can police our way out of things, you need to make sure that you're really focused as a world community and a corporate community on being part of that anti-corruption fight. The United States also, and I think this is important for people to understand the idea of leading from the front, the United States is targeting the supply side and the demand side from an enforcement perspective now in the US. Before, it was very demand-based, going after the public officials that were taking bribes. The United States is now going after major corporations for paying those bribes. I think that's significant because companies have been in a position where they're willing to pay the fines, but the line that I used when I was the FBI's national chief of corruption and civil rights was, “I don't want your money, I want your freedom.” I say that because that's the deterrent, and I do believe that we need deterrent in addition to the idea of responsibility. I'm now at EY. Our practice is named Forensic and Integrity Services. We are out there working with companies across the world globally to put in anti-corruption programs, anti-corruption analytics and ways that we can actually help companies track it. Responsible companies are doing this because they want to. People that are actually fearing consequences do it because they have to. There's been a couple of very recent announcements which I actually think is important. Lisa Monaco, who is the deputy attorney general, released something called the Monaco Memo. In that Monaco Memo, there's something about if you have proactive data analytics and you are looking at your fraud and anti-corruption programs from a proactive standpoint, your company will get credit for actually doing that. The idea is not to just have a program and to have it in name only, it's to make sure that you are being threat-driven versus event-driven, which I think is a huge change globally. I get very passionate about this, and seeing a world audience in this room that is fighting corruption is incredibly inspiring to me, and being up here with people that have dedicated their lives to this fight. To me, the call to action always is what more can we do to be better? Because with the Ukraine situation, we were involved in a kleptocracy investigation in 2014 in Ukraine, and it's really important when we have a one trillion-dollar potential rebuild that that culture has changed, because a culture of corruption leads to continued corruption.

[Lisa Miller]

Thanks so much. [inaudible]

[translator]

[Speaking in foreign language].

[Lisa Miller]

…to really focus on developing its own internal compliance structure, culture of integrity, or do you think that they, really in the first instance, can do more trying to work collectively to promote those principles more broadly? Thanks.

[Cristina Ritter]

Thank you for the question. It's like the chicken and the egg question. But from the UN Global Compact, we ask companies to fight corruption internally, externally, and collectively. The three approaches are very important. Of course, corruption challenges, they vary a lot from region to region and country to country. Collective action normally is more useful or powerful, I would say, in countries where companies face those consequences of corruption in their day-to-day operations, or cases that were mentioned previously where they have to pay a bribe or they're required to pay a bribe to get their license or to clear merchandise from customs or to get paid by the government. In those situations where being alone, like Martin said, wouldn't make any difference, there's not, I guess, another option but to work collectively. Internally, companies, of course, they have to implement an anti-corruption program of ethics and compliance. Basically we require them to conduct a risk assessment and then adopt a program or at least some measures, control to mitigate those risks. Of course, to have a strong tone from the top, culture of integrity with a code of ethics and trainings, incentives, communication, but also reporting channels, whistleblower protection measures to identify wrongdoing. And, of course, consequences for those wrongdoing or corruption actions. Externally, we require companies to extend that program through the supply chain, to business partners, and who else? Through the supply chain. That help us or strategically help us in reaching and involving more SMEs in the fight against corruption. Collectively, it has been mentioned here. It's important for companies to join forces among them or work with other stakeholders such as a government, civil society, academia, international organizations. The UN Global Compact also has 10 years of experience in fostering collective action. Recently, we launched a playbook on anti-corruption collective action, an e-learning module. If you're interested in that, in implementing in your country, that's a first step to read about this methodology. We're currently working with our local networks in 10 target countries through a program also funded by Siemens, the Siemens Integrity Initiative. We're tackling specific corruption challenges that have been identified by our local networks in those countries. For example, Brazil, Indonesia are working in the agro-business or energy and infrastructure sectors. In countries like Kenya and Malaysia, the private sector has been working with the government to regulate the recent legislation on the liability of legal persons with incentives for corporate compliance as, for example, mitigation for potential sanctions. We're working on public procurement in Bangladesh, in the health sector in India. In Ukraine, our local network is also leading the business integrity efforts for the reconstruction, recently the established public-private partnerships working group against corruption. We're working on those different topics. Another thing that we're doing in this regard is with the UN Office on Drugs and Crime, guardian of the Convention, we are developing guidelines for state to adopt measures to promote business integrity. We discussed this back in January with UNODC and we thought companies should be involved in this process, like we should consult with them and hear from them, so what are the type of incentives that you want to see, but also the sanctions, what are the sanctions you believe are fair for wrongdoing and for those companies that deviate? Not only consult with them to see what they want, I guess, to those incentives and sanctions to be, but also for governments and private sector to work together in developing those measures and in promoting them once they're adopted and implementing them. There's going to be a chapter also on collective action to achieve this. Well, that's publication that we're also working with the OECD, will be soft launched at COSP this year in December, and eventually launch next year at the OECD forum. We believe that in implicating companies in the process also gives it more ownership, which is critical for effective implementation.

[Lisa Miller]

Thank you so much. Just on an administrative note, Simon promised me that if we start late, we can run late, so I'm going to take advantage of that and we'll run about an extra five minutes because we started a few minutes late, so thank you. Thank you, Cristina. We've heard talk about the supply chain and our work in the Integrity Compliance Office here at the World Bank Group, I think that is critically important when we see multinationals flowing their integrity requirements down their supply chains. That to me is a form of collective action in itself, and I think that's something that people don't often think of, but I think that can be a very powerful tool for getting these messages to SMEs as well. Turning to that buzzword, collective action, that we're all throwing around, Frank, I'd like to ask you, in your view, what relevance does collective action approach have for the private sector? Thanks.

[Frank Brown]

Thanks, Lisa. To be very honest, it's a mixed bag. We have collective action efforts that we've embarked on that have been extraordinarily successful, in part because of the companies involved, but in part because of luck, in part because they were in highly corrupt environments where collective action made sense. I'm talking about there are best cases in Thailand. A bunch of companies get together 13 years ago. They pledge to uphold the standard that's consistent with the FCPA, then the key to this is that they subject themselves to an audit every year on whether they're upholding or not this pledge. If they don't uphold it, as Martin noted with MACN, then they're kicked out. This has been highly successful in part because Thailand is so corrupt, the private sector itself needed to do what the government couldn't do. Now there are over a thousand companies who've made the pledge, over 500 subjected themselves to audit. The big success story. In another country, a former Soviet country, quite small, the opposite is true. We embarked on a collective action effort that has not been so successful, in part because the folks who are taking part in it, the companies are not so big. They're not the big players in that economy. No offense to all the lawyers in the room, but you have way too many lawyers and accountants trying to drum up new business, and so they're part of this collective action thing because they're looking for customers. So you get a bunch of people who gather every quarter to talk about collective action and business integrity, but not much happens, and so that breeds a sense of cynicism, which does, to my mind, more harm than good. I think we need to be really careful with throwing around the word collective action, embarking on it, especially among SMEs that may not have the capacity to put in place meaningful compliance programs, because we can end up doing more harm than could.

[Lisa Miller]

Thanks so much. So, Martin, that leads me back to you. How can collective action initiatives such as MACN, how can we put in place those types of initiatives that are replicable across different industries, across different company sizes, across different geographies, and also put them in place in a way that's sustainable? So what do you see as the enabling conditions for those types of initiatives such as MACN to succeed? Thanks.

[Martin Benderson]

Yeah, thanks for that question. I think, firstly, our initiatives are industry-led. We wouldn't engage in a country or a port if it wasn't backed by the industry because companies are part of the problem to some extent, but they're really part of the solution as well. You need them to drive change, and driving change in anti-corruption comes with a certain cost. They need to be prepared to do things differently, to train their internal staff, get senior-level buy-in, and eventually also face certain delays and other costs and resistance that comes with anti-corruption initiatives. This is really what we see in more or less all initiatives. Without that kind of buy-in, we will get nowhere. I think that speaks to all private sector initiatives that would address corruption, that there has to be an expectation that you walk the talk, but you're also prepared to take the eventual cost that will come in the short term. Then the gains will come in the more long term. What we also see as important in our work is to have more of a, let's say, bottom-up and more practical approach. We try to focus on very specific challenges in the port. We're talking about procedures or processes that are not working. We don't go in and say, "Let's do a completely reform of the whole sector." Business doesn't really... That doesn't speak to business. You need to be able to speak to a captain and say, "I want to make your job easier by working with you," and that appeals to them. "You can do the right thing and I also want to help you do your job in a more effective and quicker way." I think also in collective action, of course the footprint and the leverage you get is important When you engage, you need a number of players on board. You need some of the large players, you need supply chain partners, and all that has to be in place. I think that, therefore, I would recommend a sector initiative that makes a lot of sense, where you have business partners in the same room collectively acting together. That's something that we have seen works really well. Then, of course, as I said, this is a long-term game. It takes a few years to have an impact. Companies have to be prepared to invest over time, two, three, four years in an initiative if this should work. Then, finally, of course the local context matters. Political commitment in the country from government on anti-corruption is really critical. Can you tag along on the current anti-corruption agenda? Are there civil society who actually can voice this? I think what this also comes down to is what was discussed yesterday, civic space. Is it available? Can civil society talk openly about corruption and be successful in addressing this? This has also an implication on companies. We work with some of the largest multinationals in shipping, and they come to us that, "Well, we can't really speak up about corruption in this country because there is a real risk of being de-licensed." There's also cases of business people being abducted by the government. This is actually a real risk. We're there with our staff. We have a local office. We need to act collectively. I think my response to the shrinking civic space is that we need more collective action, especially from the private sector side, because this is how we protect companies from being penalized and targeted by government or others for speaking up. We need collective action platforms where we can speak as a collective and show that this is more of a systemic general issue, and slowly but surely we can have progress also in countries where this is a very sensitive topic to address, I would say.

[Lisa Miller]

Thank you so much. So, Jeff, briefly, working at EY and advising companies in their integrity compliance efforts, what do you see are some of the greatest challenges in that work and how have you overcome them with these companies, with the clients? Thanks.

[Jeffrey Sallett]

I think ... I'm exceptionally loud, so I usually don't use a mic, except I'm up here with a group and we're using them, so my apologies. I'm really going to keep this extremely focused. The answer is we are in a down economy globally, meaning that people are spending money on what they determine are needs, not wants. Unfortunately, compliance programs when it's called from a proactive standpoint, are wants, not needs. I always say to people, you're better off investing on the front end in your insurance than having to pay the claim at the end. People are making risk-based decisions that we have a compliance program, the compliance program's been in place for the past 15 years. Have you spent any time updating that compliance program? The answer is maybe not. Is your compliance program a box check versus something that is actually going to result in action? The answer is people need to be constantly looking at those compliance programs and evolving them. When you are in corporate America, and I'm going in and I don't know which one of you said this about the accountants and the lawyers, that they're looking for business. What I try to do when I go to clients is share thought leadership and not push on them that you should or should not do. Everything in your company is a risk-based decision based on what you have for money. The big challenge right now is I think a lot of companies are more worried about their threats from cyber actors and malicious actors and spending money on anti-compliance programs. But when you're looking at the compliance fight right now, the US government said that the new FCPA, they've actually given two versions of it. One is sanctions and two is export control. If you're looking at those two areas, what we're advising clients is even if you're not going to reevaluate the entire program, you might want to look at and start evaluating your program related to sanctions and export control, because at least getting them to evolve from a piece because, again, I mean, at the end of the day, the corporate world is in business to make money. To me, coming out of government where my job was to keep people safe, it's an evolution, but remembering that corporate America, it's the incentives. What can we do to actually monetarily incentivize people, as well as doing the right things for the right reason?

[Lisa Miller]

Thank you all so much. Thanks, Jeff. I really appreciate the insights that have been shared by the panelists today, and I hope you found them as helpful as I did. To wrap up briefly, I think the mic drop moment I heard from Jeff earlier is anti-corruption is a team sport. When we ask about what is the private sector's role, it is there because no one side can do this alone. Working together, private sector, public sector, CSO, NGO, all of these stakeholders have a role to play, and it's finding how to incentivize them to work together collectively to try to make these changes, to try to make this difference in the anti-corruption fight, that I think is critically important for all of us to take forward and to hopefully try to implement in our own environments. We consciously decided not to leave room for questions during this session, but all of our contact information is available to participants, and we'll be here for a bit after the panel. Please feel free to come up and ask us any questions that you may have or to reach out after the event. I also want to thank Jim Anderson because he was a focal point for this session, my colleague in the Governance Practice here at the World Bank Group. Thank you, Jim, for putting us all together. Thank you all for joining and thank you to the panelists.

[audience applauds]