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Will Brexit Britain lose its lead in the fight against corruption?
Not too long ago, the UK was talking a pretty good game on anti-corruption. And playing a pretty good game, too. But that is now at risk as the country stumbles its way towards an exit from the European Union.
The previous prime minister, David Cameron, had made good progress. He talked up the UK’s anti-corruption ambitions and regularly gave speeches stressing the need to tackle bribery and other wrongdoing. He published a detailed anti-corruption plan, and the UK held a high-profile international anti-corruption summit in May last year.
Britain still remains a solid performer in Transparency International’s annual league table of the most and least corrupt countries in the world. It came in tenth (again) on the Corruption Perceptions Index out of 176 countries. This, however, shouldn’t be seen as grounds for complacency. The UK’s impending departure from the EU brings with it a real risk that its eye will slip decisively off the ball.
Post-Cameron there are only questions where there was once ambition and progress. Both Corruption Watch UK (CWUK) and Transparency International UK (TIUK) – two widely respected NGOs – have been quick to express doubts about whether Theresa May’s government would be able to manufacture the time or possess the inclination to carry on the good work.
The challenge, so these organisations argue, is how to deal with the potentially all-encompassing Brexit negotiations without anti-corruption slipping down the government’s priority list. Corruption Watch and Transparency International also wonder whether any future economic downturn would put renewed pressure on the resources allocated to the Serious Fraud Office and other corruption-fighting institutions.
It is easy to see why they are worried. With Brexit, and the need to hunt out new business in developing markets, a process of benign neglect may set in. Politicians could quite plausibly assume that the pursuit of economic competitiveness would be far simpler with a lighter touch when regulating business activities.
Much of the post-referendum rhetoric from those who supported a Brexit vote has been that the UK economy will now open up to business from around the globe. If Britain aims to expand trade links with countries such as Brazil, India and China then UK companies will clearly have to deal with environments where corruption is at least perceived to be more prevalent than it is in the UK. If we take the Transparency International rankings as an indicator, then all three of those major emerging countries score considerably worse than Britain, bunched together in joint 79th place.
The types of corruption that UK business is likely to encounter in these emerging markets is wide and varied. If, however, we take a closer look at what tends to characterise low corruption countries, then UK policy-makers have plenty to ponder. Transparency International chairman José Ugaz noted three things that help states genuinely root out corrupt practices: freedom of expression, transparency in all political processes and strong democratic institutions. He might well have added judicial independence to that list.
Only with these things in place will civil society and the media be able to hold those in power to account and only then will the building blocks for a successful anti-corruption fight be in place.
China, one of the key markets in UK policy-makers’ line of vision, displays precisely none of these core traits. India and Brazil are certainly democracies, but a regular stream of scandals (see here and here for examples) indicates that corruption pops up in plenty of places. It is possible to do business without indulging in corrupt practices. But it is not always easy.
It is very plausible that post-Brexit there will be strong lobbying from business particularly exposed to these markets for key parts of the UK’s anti-corruption legal framework to be watered down. This is even more likely when it is remembered that the UK has the most powerful and widely respected piece of anti-bribery legislation in the world.
The 2011 UK Bribery Act (UKBA) is a case in point. Any sort of bribery by UK citizens or by citizens working for UK firms could potentially be prosecuted. It is also an offence under the UKBA to receive a bribe; most anti-corruption legislation in other countries simply criminalises the act of giving the bribe.
The UKBA also prohibits facilitation payments, sometimes called “speed money”. Anti-bribery legislation elsewhere generally does allow a defence of these if the payments are made to simply make an official do something quicker (but not differently from what he/she would have done anyway). So if, for example, you need to get perishable goods off a ship in a harbour then most legislation turns a blind eye if you help “facilitate” the process by paying extra. The UKBA doesn’t.
Most notably, the UKBA also creates an offence of failing to prevent a bribe. No company can now hang employees out to dry unless they can show that they properly educated the employee concerned about what was acceptable in that setting. This provision is genuinely unique. The number of convictions has been small, but the message is clear; if you indulge in bribery, or allow it to happen on your watch, don’t be surprised if we come after you.
Brexit and the new focus of UK trade and mercantile diplomacy throws UK anti-corruption thinking in to a state of flux. On the one hand there is the danger of (more or less deliberate) neglect of the UK’s previously high profile anti-corruption thinking and on the other there are worries that a future economic downturn may bring pressure to review parts of the UK Bribery Act that are perceived to constrain UK business activities abroad. Opponents of the act will feel this is the time to begin mobilising, and Britain’s admirable progress may be undermined by the back door.
Daniel Hough receives research funding from the British Academy to investigate 'Corruption, Dirty Capital and the London Property Market' (March 2017-March 2018)