The many-headed hydra: how grand corruption robs us of a sustainable future

The result is often devastating. Education, health and other development priorities remain underfunded; the natural environment is destroyed; and fundamental human rights are violated. Those who suffer the consequences are ordinary citizens, particularly the most vulnerable individuals and communities.

We’ve highlighted this problem before but, as the Sustainable Development Goals come towards the end of their fifth year, we want to expose the serious threat to the 2030 Agenda for Sustainable Development from grand corruption (also known as “corruption involving vast quantities of assets”).

Grand corruption has three main features. It is a scheme with a systematic or well-organised plan of action; it involves high-level public officials; and it causes serious harm, such as the large-scale misappropriation of public resources or gross human rights violations.[1] Typically, the perpetrators get away with their crimes by thwarting their national justice systems, so that special measures are needed in other jurisdictions to hold them accountable.

Case studies from Guatemala, the Maldives and Mozambique indicate that the impact of grand corruption on the Sustainable Development Goals (SDGs) is far more destructive than from other forms of corruption. At the same time, less is being done about it.

According to the evidence from our early findings, the impact of grand corruption on the SDGs is most apparent across three main types of scheme:

• Where large-scale misappropriation of public funds severely reduces the overall budget available for sustainable development efforts;
• Where corrupt schemes in government ministries and departments directly responsible for delivering specific SDGs seriously compromise these agencies’ ability to uphold their commitments;
• Where undue influence over government policy results in the gross privileging of private gain over the public interest to the detriment of SDG implementation.

We found cases of high-level officials directly embezzling funds from infrastructure and health budgets. In others, the scale of looting at the highest levels of government is so vast that it has led to negative macroeconomic consequences, with severe ramifications for the provision of basic services.

There are also examples where the influence of private interests over public policy is so disproportionate that it frustrates action in critical areas, such as measures to combat climate change.

Our analysis of these individual cases reveals several common themes:

• Difficulties in bringing corrupt high-level officials and those with whom they collaborate to justice;
• Dangers for investigators, judges, prosecutors and whistleblowers in bringing these cases out into the open;
• Reliance on an extensive network of private sector enablers, including international banks, law firms and anonymous companies that facilitate the laundering of the proceeds of corruption, often in high-income countries;
• Poor track-record of the international community in returning funds lost to corruption to the victims of these schemes.

These issues can affect all countries, whether as sites for grand corruption schemes, and/or as hosts for a network of enablers facilitating corruption in other countries.

In recent years, we’ve witnessed some progress on the part of states and international organisations towards recognising grand corruption as the seminal governance issue of our times. We need now to build on this consensus by consolidating an internationally recognised definition of grand corruption as a first step to designing effective measures to tackle it.

At Transparency International, we are developing a legal definition of grand corruption that could provide the basis for special measures at national level, as well as for potential international structures to deal with the issue. In addition, we are campaigning for full transparency related to the beneficial owners of private companies, which are typically used to stash the ill-gotten gains of grand corruption abroad.

Our work is intended to complement the valuable recommendations emanating from the Expert Group Meetings in Lima and Oslo, which directly address the kinds of problems highlighted by our case studies. These recommendations include:

• Increasing sanctions for those implicated in grand corruption;
• Providing enhanced protections for investigators, judges and prosecutors of corruption cases and whistleblowers;
• Targeting intermediaries by strengthening the supervision of banks;
• Improving international cooperation, including around the return of assets.

We want to see specific commitments from governments as they gather in Abu Dhabi this week for the Eighth Conference of State Parties to the United Nations Convention against Corruption (UNCAC). This includes:

1. Explicitly recognising grand corruption as a threat to the 2030 Agenda for Sustainable Development;
2. Prioritising the prevention of and responses to grand corruption;
3. Initiating discussions on a definition of grand corruption and an Optional Protocol to the UNCAC on Grand Corruption;
4. Committing to further research on the impact of grand corruption on sustainable development to identify effective counter-strategies, and convene an Expert Group Meeting on this subject;
5. Developing specific strategies targeting grand corruption in corruption-prone sectors at the heart of the sustainable development agenda, including education, energy, foreign aid, infrastructure and health.

To ensure continued momentum to tackle impunity, we also call on states to put the issue of grand corruption and the SDGs firmly on the agenda of the UN General Assembly Special Session on Corruption, due to take place in 2021.

In all cases where funds are illicitly diverted away from sustainable development efforts and into private pockets, citizens are deprived of fundamental human rights such as the rights to education, health, an adequate standard of living and, in some cases, the right to life.

The insights our case studies offer on the pernicious direct and indirect effects of grand corruption should catalyse and guide global action to clamp down on such schemes. With ten years to go until 2030, we need serious and urgent efforts to tackle grand corruption if we are to have any hope of achieving the 2030 targets. Without it, any progress towards the sustainable development goals is likely to be fragmentary, short-lived and volatile.