This forum has been called in response to the state of crisis in which our country finds itself today. I do not have the expertise to discuss many of the elements of that crisis. There is one, however, in which I have had experience over the past two decades – grand corruption.
In our country, on our continent, and in the wider world, corruption lies at the heart of untold misery and especially for the poor; it magnifies the inequality that undermines their dignity and deprives them of hope for a better future for themselves and their families. Successful eradication of corruption can go a long way to remove many of the evils that bedevil our society in South Africa and beyond. Corruption is very much a human rights issue.
In 2004, I was teaching at New York Law School. I received an unexpected call from the then Secretary-General of the United Nations, Kofi Annan. He requested me to join a committee of three persons, under the leadership of Paul Volcker, to investigate the then notorious scandal surrounding the UN/Iraq Oil for Food Program. That program followed the Security Council forbidding Iraq from selling its oil save through a bank account controlled by the UN and using the proceeds only for the purchase of humanitarian goods. It emerged from our investigations that almost all countries who dealt with Iraq, paid bribes for the opportunity of reaping a profit from the Program. The largest bribe paid to the Saddam Hussein government came from the Australian Wheat Board. It paid bribes amounting to $240 million and in return received contracts to supply wheat to the value of $1.2 billion – that was in the late 1990s.
South Africa also featured in our investigations. In 2000, the Government sent a friendship mission to meet with Saddam Hussein and his senior ministers. A young businessman, who was associated with the ANC, was a member of the mission and, inexplicably, he received an oil contract which he immediately sold at a profit of just under half a million dollars. That profit was paid to the ANC – a clear confusion of the Government with the ruling party. Judge Michael Donen was appointed to investigate the findings of our inquiry. He did so and his report, confirming our findings, was kept under wraps for over 10 years. This was an early illustration of a confusion between the government, the executive, and the ruling party.
Corruption on the scale of state capture would not be possible without the nefarious and complicit role of private business. Criminal co-conspirators around the world in banks, law firms, real estate agencies, and other financial service providers, provide essential aid to, and abet, kleptocrats in the transnational crime of money laundering.
Kleptocracy is not a consequence of the lack of laws. To facilitate their criminal activities, kleptocrats have gutted their domestic criminal justice systems – they have taken control of the prosecuting authorities, the police and frequently the courts. The laws are not enforced.
A prime example is provided by former President Jacob Zuma who, with his crony capitalist partners, the Gupta brothers, enabled the state to be looted on an industrial scale. The prosecution authority and the police authority were effectively disabled. Our country was estimated to have lost fully a fifth of GDP during the Zuma ‘state capture’ decade. The detail can be found in the lengthy report by our Chief Justice, Raymond Zondo. And, as the Chief Justice complained some months ago, our Executive and Legislature still fail to act robustly in carrying out urgent recommendation made in the Zondo Report. There is currently an unfortunate and unnecessary debate on whether the Constitutional Court has ordered the establishment of a completely independent corruption investigating body. It did so in clear terms. The Government refuses to set such an institution that is independent of a simple majority in Parliament. Whether constitutionally required or not, the Government has failed to provide any reason, let alone a convincing one, for not establishing such a body under Chapter 9 of the Constitution and in that way to ensure its independence from a simple majority vote in our Parliament.
I would like to spend the remainder of my time presenting a complementary idea that can help with the accountability part of the anti-corruption equation and that may be less well known or understood.
As Vice Chair of Integrity Initiatives International (or Triple I), I am an ardent advocate for the creation of an International Anti-Corruption Court (the IACC) that will hold both kleptocrats and their co-conspirators, those so-called professional enablers, accountable when national authorities are unable or unwilling to do so.
In addition to the AU Convention, there is near universal agreement that several forms of corruption must be criminalised by the 189 parties to the United Nations Convention Against Corruption (UNCAC). There is a long way to go to fully implement UNCAC, but most members have complied with their obligations under the Convention to have domestic anti-corruption laws on the books.
The envisioned Court would have jurisdiction over the UNCAC crimes committed by nationals of an IACC member state, and crimes committed in the territory of an IACC member state. It would enforce the criminal laws already required by UNCAC – the bribery of public officials, embezzlement and other misappropriation of public funds, money laundering, and obstruction of justice in relation to those offences. The IACC would be a court of last resort, meaning it would acquire jurisdiction only in cases in which the appropriate domestic authorities are unable or unwilling to investigate or prosecute the corruption. Member states would also be able to refer cases to the IACC.
Few kleptocrats keep their ill-gotten gains at home. Billions of dollars of stolen assets are laundered in a number of countries – they include Canada, the Netherlands, Singapore, the United Arab Emirates, Switzerland, the United States, and the United Kingdom and its Overseas Territories.
Of course, kleptocrats will not allow their countries to join an International Anti-Corruption Court and they will do everything in their power to hamper investigations into their criminality.
However, if some of the countries where laundered funds are held would join an International Anti-Corruption Court – and several are considering doing so – then illicit assets could be identified and frozen by the Court. Through orders of restitution, those funds could be repatriated to the countries from which they were stolen.
If there is a high risk of those funds being misused if returned to a corrupted state, they could be repurposed for refugee and humanitarian purposes or repatriated only at a time when they would reach the real victims – the millions in need in those countries and their forced diasporas.
The IACC would also be an institution that would be able to offer what could be crucial assistance. The IACC’s expert investigators and prosecutors could be called upon for assistance by leaders in countries such as Moldova – which has endorsed the idea – who are willing but do not have the resources to counter corruption on their own.
The newly launched IACC model treaty drafting project, which I chair, will be guided by lessons learned from the experiences of the ICC, as well as other previous and existing international and hybrid courts. We are confident that we can design a new IACC that is more efficient and more effective.
There are a variety of ways in which an IACC can be more cost effective than the ICC, including only employing a small number of permanent judges, with other vetted and approved judges called upon only when the caseload requires their services. Furthermore, there should be no need for pre-trial chambers, which have greatly prolonged the life cycle, and therefore costs, of situations before the ICC.
Regardless, the operational cost of the IACC would constitute a small fraction of the amount of illicit assets that it could seize and return to their originally intended purpose – the public good. In addition to orders of restitution, it could levy fines on those found guilty and these could be used to defray some of its costs.
At the end of August, Triple I organised the first in-person expert group meeting for the IACC model treaty drafting project hosted by The New Institute in Hamburg. The jurists, lawyers, scholars, and anti-corruption experts in attendance came from Trinidad and Tobago, Nigeria, Brazil, Cameroon, Bangladesh, and Mexico, as well as the United States, Canada, Australia, and New Zealand.
Our discussions in Hamburg focused on drawing lessons from the experiences of the International Criminal Court (ICC) and other international and hybrid tribunals. We emphasised the critical need for extensive involvement of Global South stakeholders in the drafting process, alongside experts from the Global North, to ensure the court’s effectiveness.
None of the IACC’s supporters see the Court as a panacea that will end kleptocracy, any more than the International Criminal Court has ended atrocity crimes by political leaders. But it would be one of the many tools, domestic and international, that are absolutely essential to combat and hopefully ultimately to defeat kleptocracy. It would be the only international mechanism to have jurisdiction over kleptocrats and/or their illicit funds.
By establishing a credible threat of criminal prosecution for both kleptocrats and their enablers – the bribe givers and the money launderers – the IACC would deter others who may be tempted to emulate their example.
There are now over 300 leading figures from across the world including more than 50 former Presidents and Prime Ministers and 32 Nobel Laureates, who have signed a Declaration calling for the creation of the IACC.
Colombia was the first country to call for an IACC back in 2016. More recently, the Netherlands, Canada, Nigeria, Moldova, and Ecuador have committed to working towards the creation of the Court. In January this year, the European Parliament passed a resolution calling for the IACC. Additional countries from each region of the world have also expressed their interest in the idea.
The UK Labour party, which has a good chance to win the elections next year, announced last month that it will champion the IACC idea and there is further cross-party support for the Court in the UK. Lord Peter Hain, in particular, has become an articulate and keen supporter of the IACC.
The effort to create the IACC will take time, but the momentum generated in the past two years suggests that it may be possible sooner than even its strongest proponents think. The time is now to therefore strengthen the proposal so that the eventual Court can provide as meaningful as possible a check on corruption.
South Africa played a leading role in establishing the ICC. I am happy that its support fort an IACC has gained momentum here in the past year. It is my hope that South Africa will join other nations that are supporting the establishment of the IACC. I have no doubt that this would be, and be seen to be, a positive development in our international relations. It would be a meaningful step away from the events that have led to the significant downgrading of South Africa in international money markets.
Progress on both short and longer term anti-corruption solutions can knit together a powerful anti-corruption tapestry that strips kleptocrats of their impunity and thereby helps Africa and the world reach for a better tomorrow.
The support of this assembly for the IACC project would significantly encourage our government to play a leading role in pushing for the IACC and garnering further support for it from our continent.
– Justice Richard Goldstone