Today, one cannot read a newspaper, watch television or surf social media, without hearing of corruption, state capture, looting of state assets and dysfunctional state owned enterprises.
How many students could have gained entry into university with the amount of money lost or stolen? How many houses built? How many thousands of people fed and kept safe?
You do not need a degree in rocket science to realise that corruption has a direct impact on the human rights of people.
Corruption is a worldwide scourge and should be addressed globally, regionally and nationally. I have said, as UN high commissioner for human rights: “Let us be clear. Corruption kills. The money stolen through corruption every year is enough to feed the world’s hungry 80 times over. Nearly 870 million people go to bed hungry every night, many of them children; corruption denies them their right to food, and in some cases, their right to life. A human rights based approach to anti-corruption responds to the people’s resounding call for a social, political and economic order that delivers on the promise of freedom from fear and freedom from want.”
Every UN member state, including South Africa, has undertaken international legal obligations for the promotion and protection of human rights.
Human rights involve the shared perceptions of individuals regarding basic questions of right and wrong, fairness and equity.
Ethics relates to our sense of what is right and what is wrong. It is a moral compass to our conscience.
For individuals, ethical standards enable them to differentiate between what should and should not be done. It is unethical to spread falsehood, to plagiarise the writings of others, to be an internet bully, jump queues, or give and accept bribes. These are a few examples where the act may not constitute a crime but is not ethical behaviour.
For associations and businesses, ethics are a guide to corporate responsibility to respect human rights, practise honesty, transparency, competency and accountability.
The various professions have codes of ethics –lawyers, judges, doctors, accountants, journalists and so on. Breach of ethics by them lead to diminishing trust in these professions.
When KPMG in Johannesburg, approved, then after exposure, withdrew their report on the South African Revenu Service as being factually unsubstantiated – that would be unethical conduct for the profession of auditors. The public rely on their audits. Similarly journalists are accountable to their readers/listeners/viewers, and must adhere to the truth and not publish false or harmful propaganda.
For public officials good governance should be the ethos. Good governance must be participatory, transparent, accountable and responsive to people’s needs. Public officials are bound to act with integrity in carrying out the trust and responsibility entrusted to them in the public interest. It is unethical for public officials to use their office for self-interest or for the interest of their families and friends.
Public interest trumps their personal interest and they must ensure that they are accountable for clean public administration and proper service delivery.
A 2010 report on state-owned enterprises commissioned by president Zuma recorded cases of corruption involving tenders and procurement for that year alone in Transnet, Eskom and South African Airways, that implicated members of the executive.
The Public Protector’s investigation of Prasa found evidence of improper conduct in awarding tenders, revealing “a culture of systematic failure to comply with supply chain management policy”.
Since then, the situation continues to worsen as allegations of improper influence by politicians and associated businesses in the allocation of mining rights and contracts with state-owned enterprises such as Eskom. Corruption Watch in 2015, revealed from a survey, that there has been “too little investigation into transgressions of laws regulating governance in state-owned enterprises”.
Corruption is defined by Transparency International as “the abuse of entrusted power for private gain.” Corruption is a serious problem throughout the world community, in every economy, every political system, developed and developing country.
The corruption ratings shown on our television scales places South Africa in the category of 150s, Botswana is in the 30s and Russia features as one of the worst.
While we watched grimly, the removal of a suspect president in our country: the former president of South Korea is in prison on trial for embezzlement, the president of Brazil was convicted of corrupt practices, the Malaysian president was accused of stealing billions of dollars of public funds, the prime minister of Japan is accused of aiding his close friend by defrauding documents, to secure land at one tenth its value and the prime minister of Israel was questioned for tender irregularities and fraud.
It is no comfort to us that other countries are worse off in the corruption ladder. What should concern us is the impact of global corruption, illicit trade and illicit financial flows, on all of us.
Illicit trade is cross-border activity that is not authorised by receiving or sending states. Illicit trade involves, for example, illegal trade in money, drugs, arms, human trafficking, counterfeit medicines, environment crime, intellectual property infringements and smuggling of people.
Illicit fund flows refers to money earned, transferred and used. Africa suffers a loss of $50 billion (nearly R600 billion) in illicit fund flows each year. Africa needs $30 billion to $50 billion for social services and infrastructure.
Repatriation of stolen assets is difficult. Only 2% of estimated funds of illicit origin leaving developing countries per annum are returned to countries of origin. The Asset Recovery Watch database reveals that in 97% of cases, requests for repatriation of these funds come from developing countries to developed countries. A lack of will to cooperate especially by financial centres and banking secrecy practices act as a bar to us getting looted assets back.
The High Level Panel on Illicit Financial Flows and transnational organised crime, jointly convened by the African Union and the UN Economic Commission for Africa chaired by former president Thabo Mbeki reports that large commercial corporations are by far the biggest culprits of illicit outflows, followed by organised crime. The report acknowledges that corrupt practices are facilitating these outflows and lack of technical capacity is hindering recovery of stolen wealth but the critical ingredient remains the lack of political will of governments. Successfully combating illicit financial flows will generate positive impacts for the governance landscape of Africa, and help to address the challenge of ending poverty and underdevelopment.
Cost and impact
The World Health Organisation estimates that every year some 100 000 people in Africa die from fake drugs as pharmaceuticals are freely sold on the streets. Fake medicines, says the organisation, constitute 30% to 60% of the African pharmaceutical markets. It is estimated that up to 80% of all
malaria drugs on the Kenyan market are counterfeits. The items include baby food formula, cigarettes, medical instruments, vehicle parts, aircraft parts, motor oil and condoms. According to the AU-Mbeki report, the East African region alone loses $500 million in tax revenue each year because of the counterfeit trade.
I and other judges and staff of the UN Rwanda Tribunal were often victims.
In the early years we were paid in cash because there was no bank in Arusha, Tanzania, where the Tribunal was based. We sometimes found counterfeit hundred dollar bills in our wage envelopes but had to carry the loss ourselves. Even the UN had no remedies. The illicit economy deviates vital resources from development and public services, weakens the democratic process, destabilises states and compromises their long-term advancement to stable democracies.
A study by Global Financial Integrity highlights the correlation between illicit financial flows and lower levels of development. Between 2008 and 2012, 31 developing countries had illicit financial flows greater than their public spending on health; and in 35 developing countries illicit financial flows exceeded public spending on education.
South Africa joined the Convention on Economic Social Cultural Rights in 2016. States have specific obligations to respect, protect and fulfil human rights. This involves both a positive and negative duty to do no harm.
When corruption is rampant, those in public positions fail to take decisions with the best interests of the public in mind. As a result, corruption damages the legitimacy of governments leading to a loss of public support and trust for state institutions. Corruption in the rule of law system weakens the very accountability structures which are responsible for protecting human rights and contributes to a culture of impunity, since illegal actions are not punished and laws are not consistently upheld.
Illicit fund flows also lead to a build up of unsustainable debt as governments lacking revenue may resort to external borrowing. Developing countries are especially hard hit by illicit funds held abroad.
Between 20% and 30% of developing countries tend to have much smaller tax revenues, thus magnifying the loss. Tax abuse not only deprives governments of resources required to realise human rights progressively, but undermines the rule of law when tax evasion is allowed to function with impunity.
Regressive tax structures limit the redistributive impact of social programmes since they end up effectively being funded by the very people they are supposed to benefit, that is, the poor. Increasing VAT on basic produce, suggested by the former Minister of Finance, is anti-poor and anti-human rights. The stark gap between rich and poor, in the world is unacceptable and an affront to human rights principles of equality: 85-90% of wealth in the world belongs to fewer than 10 million people and at least one third of this belongs to the world’s top 100 000 families. In South Africa close to 20% of the population live in extreme poverty. When economic inequality results in such discriminatory outcomes, it becomes an ethical issue.
Human Rights principles and our Constitutional principles require that resources in a society are distributed such that individuals are guaranteed equal enjoyment of their civil, political, economic and social rights, without such unequal outcomes.
What can we do to restore ethics and end corruption?
1. While we are deeply concerned with corruption and disregard for ethics in our country right now, because of the immediate impact on us daily, we must view the issue in
context of global corruption that has macro impact on us. We need to seek international, regional and national solutions. Anti-corruption efforts are more likely to be successful if they approach corruption as a systemic problem rather than a problem of individuals. At the international level, the need is for cooperation in transnational and international efforts to combat corruption, illicit trade and illicit outflows and ensure repatriation of funds to the country of origin. I support the call for reducing the banking secrecy regulations in Europe.
2. Combining the strategies for fighting corruption and promoting human rights can serve both objectives. As a preventive measure, promoting and strengthening human rights may in the long term contribute to a well-informed and emancipated civil society, that is able to reject bribery and corruption in all circumstances, building a society based on respect for human rights and values.
3. An efficient anti-corruption strategy must be underpinned by key human rights principles: clean governance, independent judiciary, freedom of the press, freedom of expression, access to information, transparency and accountability in political and administrative systems.
4. Protection of human rights victims and human rights defenders is equally important. States have a duty to protect them as well as journalists, researchers and whistle blowers inside institutions and civil society actors against reprisals, violence, threats, retaliation and arbitrary
action for their legitimate activity of exposing corruption and wrong-doing. In turn, the due process protections must also extend towards protecting persons from false allegations, fake propaganda, removal from office, confiscation of documents and equipment and arbitrary
A good example is the resolution adopted by the Council of Europe on 30 April 2014 to the effect that member states have in place An engaged civil society and media that value and demand accountability and transparency are vital to addressing corruption.
6. We lack technical capacity to track and expose corruption and investigate the allegations of whistle blowers. For this we need your research and recommendations. UKZN prides itself on being the foremost research based University in our country. The issue of ethics, corruption, illicit trade and illicit financial flows, that I have covered in this lecture are urgent societal challenges that need your attention.
• Judge Navi Pillay, is a former UN high commissioner for human rights. This is an extract from a human rights lecture she delivered at the University of KwaZulu-Natal on Friday.