G20 should take bold action to combat corruption

Campaigns and Advocacy, Media Releases, Mining, News article written on the 15 Jun 2012

Australia can urge the G20 to play a positive role in combating corruption around the world by taking action to increase revenue transparency in the mining sector, Oxfam Australia said today.

The G20 meets in Mexico on Monday 18 June and Tuesday 19 June.

Announced in 2010, the G20 Anti-Corruption Action Plan aims to prevent and tackle corruption and establish legal and policy frameworks that promote a clean business environment and to continue to assist G20 countries in their efforts to combat corruption.

Oxfam Australia’s Director of Policy James Ensor said that while Oxfam welcomed the work of the G20’s Anti-Corruption Working Group, its mandate should be extended beyond 2012 and go further to include the extractive industries sector.  With Australia set to host the G20 in 2014, it has a golden opportunity to highlight the importance of this issue.

“Australia, as a mining giant, has a role to play in increasing revenue transparency in the mining sector, to ensure that communities benefit from the huge wealth of the resources being extracted from under their feet,” Mr Ensor said.

“Two –thirds of the world’s poorest people live in resource-rich countries that are too often characterised by poverty, conflict and corruption.

”Revenue transparency can contribute to poverty reduction and mitigate the risks of mining company complicity in corruption and human rights violations, particularly when doing business in high-risk countries.”

Mr Ensor urged the Australian Government to adopt legislation that requires mining, oil and gas companies to publish payments made to governments of all countries in which they operate, consistent with the US and proposed EU legislation.

Oxfam also is calling on the G20 to support a financial transaction tax (FTT, known in many countries as a Robin Hood Tax) to help poor people hit by the economic crisis by allocating FTT revenues to development and climate change adaptation.

The European Commission has proposed a Europe-wide FTT that would raise $71bn a year. The G20 also needs to take urgent action to curb financial speculation on food commodities, reverse biofuels policies that transform food into fuel and improve land rights.

“The Eurocrisis is a grave threat to poor countries already reeling from hunger and aid cuts,” Mr Ensor said.  “G20 leaders have an obligation to protect those that have reached the limits of their ability to defend themselves against the crisis.

“We need a concerted effort to protect poor people from economic and food crises that have left one in seven people in the world hungry. The financial sector should work in the interests of society not the other way around: that means curbing food speculation and insisting the sector which bears responsibility for the economic crisis helps poor people trapped by it.”

Three years ago, the G20 launched a framework for “strong, sustainable and balanced growth”. They will meet in Los Cabos having delivered little for people most at risk of losing their livelihoods and most likely to be pushed into poverty.

Gross capital flows to developing countries plunged to $170.8 bn last year compared with $310bn in 2010 and aid to developing countries fell by $3.4bn last year.

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Oxfam also is calling on the G20 to:

  • Take action to fix the broken food system. The G20 persists in failing to address the most important drivers of the food price crisis: increased demand for biofuels, financial speculation on commodities, and climate change. Most urgently, 18 million people in the Sahel now face a severe food shortage. This is on top of the nearly billion worldwide who already go hungry.
  • Clamp down on tax dodging and improving tax transparency. Developing countries are losing billions every year that would provide a vital boost to their economies and could be spent on reducing poverty. So far the G20’s promise to crack down on tax havens has largely failed to materialise.
  • Raise money for increased public spending and support to the poorest introducing a carbon price on international shipping, which would help to cut emissions and in the process raise $25bn a year.
  • Concentrate on ensuring that growth is fair and boosts equality, so that its benefits reach people living in poverty. As a first step, G20 countries must publicly and annually report progress on reducing inequality and make inequality reduction a measure of progress alongside GDP growth. They should task the IMF with doing this.
  • Support increased investment in high-quality public health and education services.  These are crucial safety nets for the poorest and those falling on hard times, as well as crucial investments in future productivity and a fairer society.