Thursday, November 26, 2009

The Commonwealth: a jamboree of corruption

In a Guardian article titled A jamboree of repression, Tom Porteous, director of Human Rights Watch, raises concerns about the failure amongst Commonwealth countries to "muster the collective political will to uphold its core values of political freedom and respect for human rights" and concludes that the Commonwealth has become a 'haven for human rights abusers.'

Porteous supports his case by highlighting recent actions by governments in Sri Lanka, Pakistan, Bangladesh, Kenya, Cameroon, Uganda and Gambia, all of which have engaged in repressive actions against their citizens without any sign of disapproval or action by the Commonwealth. As the article notes:

"Its secretariat fails to push or fund its human rights unit as a viable mechanism to encourage its members to comply with international standards; neither the secretary-general nor the diplomats of leading member states make a serious effort to get the Commonwealth to act collectively at the UN and elsewhere to champion human rights."

This is important and Porteous argues his case robustly but with the appropriate degree of diplomacy. Tax Justice Network would like to come at this issue from another angle: the Commonwealth is also a haven for the majority of the world's secrecy jurisdictions (generally known as tax havens).

Far from taking action to curtail their harmful practices (and let's not forget that many of the victims of secrecy jurisdictions are the ordinary people of Commonwealth member states) the Commonwealth secretariat actively participates in organisations lobbying on their behalf. This includes the International Trade and Investment Organisation, the latter having been created specifically to counter the efforts by the OECD to counter harmful tax competition. The Commonwealth's involvement in this organisation, and its lobbying efforts on behalf of secrecy jurisdictions more generally, is nothing short of scandalous.

Time after time, TJN's observers at UN events have witnessed Commonwealth member states actively engaged in blocking international efforts to strengthen cooperation in tackling corrupt tax practices. Such behaviour is wholly inconsistent with the idea, recently expressed by Lord Howell, former chair of the British parliament's foreign affairs committe, that the Commonwealth has a role to play as an "ideal soft power network" for the 21st Century.

Britain and the collection of states and dependencies formerly known as the British Empire, are collectively responsible for around one-third of the global market in cross-border financial services. A significant part of this cross-border trade involves illicit flows, largely routed through structures created in secrecy jurisdictions. These illicits flows devastate the efforts of countries aiming to achieve self-reliance and tackle poverty. There is a direct link between the corrupt practices of secrecy jurisdictions and the human rights abuses in the countries of origin of the illicit funds. In this respect the Commonwealth has a major role to play in engaging constructively with its members to address their shortcomings and take action to diversify their economies away from dependence on secretive offshore financial services.

Secrecy has no useful role in the modern world of globalised financial markets. The activities of secrecy jurisdictions are harmful to the vast majority of countries and people. They encourage and facilitate corrupt practices. They support the kleptocrats and business elites who abuse human rights and undermine undermine respect for democracy and the rule of law. Their activities are incompatible with the core values of the human rights agenda. The Commonwealth must urgently get its own house into order.


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