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Peter Maurer on new priorities in addressing corruption, environment and climate challenges
Environmental destruction and corruption are two of the greatest global challenges of our time. Both are closely interrelated… This was the starting point of a high-level meeting hosted by the Principality of Liechtenstein. Dominique Hasler and Panagiotis Potolidis of the Ministry of Foreign Affairs led the discussions together with Peter Maurer, President of the Basel Institute on Governance, and Juhani Grossmann, Head of our Green Corruption Programme. The participants took a fresh look at the interconnected threats posed by corruption, environmental degradation and climate change, and at our Green Corruption programme's renewed focus on climate and the energy transition. In his address, Peter Maurer also reflected on the need for bold collective action across borders to tackle these key global challenges. Our Green Corruption programme – made possible through core funding from Liechtenstein – is a powerful example of how international partnerships and innovative solutions can make a real difference. An edited excerpt of Peter Maurer’s speech follows: Building on 20 years of global and national experience in the fight against corruption, we at the Basel Institute have had the opportunity over the last seven years to look more closely at the interfaces between corruption and the environment. In our Green Corruption programme we are working with partners across four continents, supporting both enforcement and corruption prevention. While the political focus on environmental issues and the protection of natural resources in the past has brought many positive results, we have also seen how corruption and financial crime have become drivers of environmental problems: Standards are not adhered to. Illegal trade and financial activities lead to new forms of exploitation of nature. Regulatory authorities can be influenced, supervisory and enforcement authorities bribed into inaction. Climate legislation is manipulated. And wherever a lot of new funds flow in – like climate finance or renewable energy projects – there are direct and indirect risks of abuse. Integrity and anti-corruption are crucial in effectively tackling the climate and environmental crisis. But the relevant authorities, such as law enforcement and environmental protection agencies, cooperate very little, either with each other or with other stakeholders. The good news is: There are encouraging examples. Our broad geographical focus allows us to take stock and make concrete suggestions for the future. Where corruption and environmental issues converge Our Green Corruption team is intensifying efforts in key areas where we see corruption undermining our collective ability to tackle the climate crisis: the energy transition and climate finance. Energy transition Renewable energy is essential to address climate change. The renewables sector comes with new regulations, financial flows, processes, actors. The new settings also mean new integrity risks to address. In addition, renewable energies depend on the mining of critical raw materials. Lithium or nickel, for example, are used in the production of batteries or renewable power generation in turbines or solar modules. There is growing long-term demand for the mining of these minerals. The increasing competition for these resources invites new players, such as technology companies and commodity traders. And this new rush is accompanied by numerous corruption scandals. Despite the high risks, very few safeguards are put in place to prevent corruption from undermining the effective, consensual and sustainable extraction of critical materials. In the next phase of our Green Corruption programme, we are starting detailed investigations into corruption risks, including with regard to lithium in Ukraine and nickel in Indonesia. These studies will also help us to support government authorities in strengthening their internal controls and risk mitigation measures. Climate finance We all know today that tackling the effects of climate change will require enormous investments. These are necessary to a slow down climate change, and b prepare and adapt to the unavoidable effects of the changing climate. Despite these two strategies being subject to political volatility, the basic facts make this an even stronger growth area in the medium to long term. The UN puts the cost of tackling climate change at USD 5.5 trillion a year. This is more than the combined GDP of Germany and Switzerland. Very substantial financial resources are already being invested in mitigating and adapting to climate change. As money is tight and climate change compete with other financial priorities like defence and migration, we need to get more out of existing funds. That means ensuring that they are not lost to corruption. Unfortunately, our partners at Transparency International are documenting a growing number of corruption incidents in climate initiatives: Bribery to secure land for carbon capture; permits and licences for infrastructure that can only be obtained through corruption; bribes for environmental impact assessments; corruption in the certification and sale of carbon credits. There are multiple, complex reasons for corruption being present in the responses to climate change. These range from weak internal controls and excessive decision-making powers at environmental regulatory authorities to poorly designed and safeguarded carbon offsetting projects. Overall, our efforts aim to boost cooperation between different actors to help integrity standards and better practice to take hold. There is a need for greater understanding of systemic issues, more effective training and better legal, political and institutional guidance. Seeking answers The international community is faced with a number of pertinent questions: How can we use the money we have to make an impact on important problems relating to the environment, climate change, biodiversity, water and food? How can we build on market forces and support competitive companies that contribute to the necessary energy and economic policy changes? How can we make access to critical materials transparent so that we can better utilise them to bring about environmental and energy policy change globally? How can we better harmonise regulatory measures and our own initiatives? Finding and implementing answers to these questions is challenging, not least in the face of geopolitical volatility and transactional politics. But it also presents opportunities for players of all sizes, including small and medium-sized countries, to show leadership, push for innovative solutions and get involved in tangible ways. The Principality of Liechtenstein is doing just that. Its support of initiatives at the intersection of corruption and the environment such as our Green Corruption programme goes a long way.
Combating corruption to protect the environment attracts high-level support
Have we reached a turning point in the fight against corruption that impacts the environment? For the first time in its 20-year history, the Conference of the States Parties to the UNCAC CoSP10 hosted a series of special events on corruption that impacts the environment. The 25 co-organisers included states, international organisations and non-profit organisations, including the Basel Institute on Governance through our Green Corruption programme. The packed rooms showed the explosion of attention to corruption and the environment since the 8th CoSP in 2019, when Resolution 8/12 on Preventing and combating corruption as it relates to crimes that have an impact on the environment was passed. Some of the positive actions that states and non-state actors have taken in the last four years are set out in our report Seedlings of hope , which UNODC Executive Director Ghada Waly highlighted during the event. Moderated by our Managing Director Gretta Fenner, the discussion featured high-level speakers representing Angola, Kiribati, Namibia, the United States, the UN Office on Drugs and Crime and the UN Development Programme. See the full playlist of special events on environmental corruption, including the high-level event summarised below and panel discussions on the links between corruption and environmental crime, forest loss and corruption, how corruption threatens critical minerals supply chains, and the Basel Institute-led session on good practices and opportunities in tackling corruption that harms our environment. Impacts of corruption on the environment Awareness is growing of how corruption facilitates environmental crimes – nature crimes such as illegal logging, mining, fishing and wildlife trade, as well as waste trafficking. But speakers highlighted the systemic, long-term negative impacts of environmental corruption as well. “\ Nature\ crimes harm ecosystems. They deprive local economies of a way of life, they can reduce development opportunities, and they can degrade the efforts to conserve.” - Maggie Nardi, Acting Deputy Assistant Secretary, INL Bureau, U.S. Department of State Some of the worst effects are suffered by the world’s most vulnerable people. Small island states like Kiribati suffer not only the effects of climate change, but the destruction of biodiverse fishing areas crucial to local livelihoods. “Our exclusive economic zone EEZ ... faces significant corruption risks that threaten sustainable development and worsen the impacts of climate change. The fisheries value chain is particularly vulnerable, with potential consequences including illegal fishing, over-fishing, habitat destruction and mislabelling of fish." – Taneti Maamau, President of Kiribati Meanwhile, desperately needed resources to tackle climate change are being diverted. “We need to spend at least USD 3.4 billion a year by 2030 to prevent wide-scale climate catastrophe... so we cannot lose any resources to corruption, and we must ensure that funds reach their intended targets.” – Ghada Waly, Executive Director, UNODC We’re all in it together Each state and non-state actor can play a different and complementary role in tackling corruption that impacts the environment, depending on their context and resources. The panel’s broad geographical scope provided a variety of examples. Anti-corruption tools that help protect the environment With a population of just over 130,000, Kiribati has become a leading global voice on climate change and on the need to connect anti-corruption policies with environmental goals for more effective governance of natural resources. The state includes environmental and climate change topics in the country’s anti-corruption strategy and conducts corruption risk assessments with the support of UNODC. “Corruption risk assessments aim to systematically analyse corruption vulnerabilities \ and\ facilitate the identification of key areas susceptible to corruption, such as licensing, processing, monitoring, enforcement activities and revenue. By understanding these risks, Kiribati and other small island states can develop targeted anti-corruption measures tailored to the specific needs of the governance of exclusive economic zones.” – Taneti Maamau, President of Kiribati Cutting off environmental criminals from international financial markets With its large financial centre, Liechtenstein is acting strongly to cut off its financial system to environmental criminals and to support financial investigations into criminal networks. The country is strengthening its domestic laws in line with international standards and has established, for example, a beneficial ownership register and an anonymous whistleblowing system. "\ Environmental\ criminals and their networks grow stronger every day and we as a community have to grow stronger too… This is a whole of society effort. What we are facing are crimes that are transnational and that transcend the formal and informal sectors… People are more and more aware of how interconnected we are. We are all part of global supply chains. Financial flows, licit and illicit, are also global. This comes with responsibilities and opportunities to be part of the solution.” – Dominique Hasler, Minister of Foreign Affairs, Education and Sport, Liechtenstein Ensuring effective enforcement Namibia’s experience with the Fishrot case described in brief in the Seedlings of hope report shows how a country with limited resources can investigate, prosecute and sanction corruption at the highest levels of government. According to Namibia’s Minister of Justice Yvonne Dausab, important factors in the successful investigation and prosecution of the case were: The independence of the prosecution team as guaranteed by the constitution; A strong role for civil society and the media, which has created a “heightened sense of consciousness on the part of Namibians \ and\ created almost ‘hawk eyes’ on those in positions of power”. The multistakeholder system, including a “task force consisting of various institutions and law enforcement agencies.” Minister Dausab also highlighted the efficiency of our teams, the streamlined approach and the excellent international cooperation throughout the investigation and asset confiscation/preservation stages. It is a sterling example to the international community in how such cases should be dealt with. Political will and international cooperation The technical side of countering corruption that impacts the environment is one thing. But nothing happens without the kind of high-level political will demonstrated by the panel’s distinguished speakers. That’s why we need to encourage and celebrate leadership that ensures laws and regulations are implemented in reality and that strategies are applied with full transparency and accountability. Political will was key to Namibia’s Fishrot investigation, said Minister Dausab. Our President leads from the front....the political will \ to combat corruption and protect natural resources\ is there. According to a recorded statement by Paula Francisco Coelho, Angola’s Secretary of State for Climate Change and Sustainable Development. Angola’s Government: strongly reaffirms its unwavering commitment to combating corruption, particularly within the environmental sector and particularly as it relates to wildlife crime. More political will is necessary to strengthen international cooperation and to address climate change comprehensively by tackling corruption. The speakers expressed hope that corruption would be very much on the agenda at the climate Conference of Parties or COP29 in Baku, Azerbaijan in November 2024. Francine Pickup, Deputy Assistant Administrator, UNDP, summed up the feeling of speakers and participants about the possibilities for tackling corruption that impacts the environment and thereby fostering sustainable and equitable development for all: We can tackle corruption and successfully protect our environment. But we have to act now and we have to act together. Learn more View the full playlist of special events on environmental corruption at the CoSP10. Read Working Paper 50 by Sophie Lemaître: Seedlings of hope: Addressing corruption linked to crimes that impact the environment in line with UNCAC Resolution 8/12 . The report covers the efforts of states and non-state actors to address corruption that impacts the environment in the last four years. Working at the intersection of corruption and the environment or climate change? Deepen your knowledge and partnerships by joining over 600 members of the Countering Environmental Corruption Practitioners Forum, a joint initiative of the Basel Institute on Governance, WWF, Transparency International and TRAFFIC. The Basel Institute will be present at the forthcoming UN Environment Assembly to speak about the convergence between nature crime and other serious crimes, including corruption. Delegates can attend the side event on Thursday 29 February 2024 at 18:30 local time.
Progress in fighting green corruption – and the path ahead
“Fighting climate change and the degradation of our planet is hard enough. We cannot allow poor governance and corruption to undermine our hard-fought progress.” – Ambassador Georg Sparber, Ambassador of Liechtenstein to the United States Speakers at a high-level event at the Wilson Center in Washington, D.C. noted substantial strides in addressing “green corruption” in recent years. Though awareness, understanding and action on corruption and illicit financial flows linked to environmental degradation are growing, further progress is needed. That will entail the active cooperation of governments, the private sector and civil society across the world. That is no small challenge, but the tone of the event on 19 September 2023 was optimistic and forward looking. Organised by the Embassy of Liechtenstein to the U.S., the U.S. Department of State, the Wilson Center and the Basel Institute on Governance, the event featured: Richard Nephew, Coordinator on Global Anti-Corruption, U.S. Department of State Oleksandra Azarkhina, Deputy Minister for Communities, Territories and Infrastructure Development of Ukraine Andrea Gacki, Director of FinCEN Himamauli Das, Former Acting Director of FinCEN Roberto Troya, Senior Vice President for WWF U.S. country offices and Regional Director for Latin America and the Caribbean, WWF Juhani Grossmann, Team Leader for the Green Corruption programme, Basel Institute on Governance Lauren Herzer Risi, Director of the Environmental Change and Security Program at the Wilson Center moderator The high level of attendance in person and online was a positive sign that stakeholders in all sectors of society are starting to take the issue seriously. Growing attention As Coordinator Nephew stated in a keynote speech, green corruption links three key priorities of the U.S. Government: the green economy, nature crimes and fighting corruption. Addressing it will remain a prime concern across U.S. institutions, he said. Other countries are also joining the dots between corruption, transparency and environmental sustainability. The Basel Institute’s Green Corruption programme has noted a growing openness among governments and their environmental agencies to address the topic. This is a welcome development, even if getting under-resourced environmental agencies to focus on internal corruption risks remains a challenge. In Ukraine recent crimes that could amount to ecocide, such as the blowing up of the Kakhovka Dam, have drawn attention to how kleptocratic regimes can deliberately destroy nature to achieve their military and geopolitical goals. On the other side, as Deputy Minister Azarkhina explained in her presentation, the Ukrainian Government’s restoration plans are based on a powerful recognition that environmental considerations, transparency, accountability and citizen participation are all vital to their success. Environmental crime is also rising up the priority list of financial institutions and government financial intelligence units, such as the U.S. Financial Crimes Enforcement Network FinCEN . As Andrea Gacki pointed out, FinCEN’s 2021 report on illicit finance threats involving wildlife trafficking joins other milestone reports such as those of the Financial Action Task Force in drawing attention to the issue of illicit financial flows linked to environmental crimes. The increased attention has led to a paradigm shift, as moderator Lauren Herzer Risi said, from focusing on the middlemen to targeting the transnational criminal organisations masterminding nature crimes – and to the public officials that abuse their power to facilitate these crimes for personal gain. Leaps in understanding The USAID-funded Targeting Natural Resource Corruption project has added meat to the concept of green corruption with its deep, detailed and actionable research on the links between corruption and natural resource-related crimes. Favouring ground-level, practical information and aimed at a broad audience of conservation and anti-corruption practitioners, the project has helped to connect individuals and organisations targeting nature crimes from both conservation and anti-corruption angles. This shared knowledge will keep growing with the Countering Environmental Corruption Practitioners Forum, a joint initiative of WWF, TRAFFIC, Transparency International and the Basel Institute on Governance. With funding support from USAID and Liechtenstein, the Forum is already serving as a powerful platform for practitioners at all levels to share knowledge and experiences on tackling green corruption. A similar swell of understanding is taking place in the anti-money laundering/counter financing of terrorism AML/CFT sphere. A 2021 FinCEN Exchange brought together representatives from U.S. financial institutions, law enforcement and Federal Government agencies to discuss environmental crimes and related financial activity. Other information-sharing initiatives include the new U.S.–South Africa Task Force to Combat the Financing of Wildlife Trafficking as well as the international Egmont Group of Financial Intelligence Units. Actions and coalitions So, what is being done as a result of this groundswell in attention and understanding? On the enforcement side, prosecutions and sanctions for corrupt officials linked to environmental crimes send a clear message. Both suspicious transaction reports and whistleblowing reports can be useful in triggering law enforcement actions targeting corruption or illicit financial flows linked to nature crimes, while the dangers for whistleblowers and environmental activists need to be taken very seriously. For prevention, countries should systematically build anti-corruption elements into green economy and climate-related projects, as Coordinator Nephew said the U.S. is doing. In this, countries could take inspiration from Ukraine’s reconstruction planning, which makes the most of digital technologies like ProZorro and the DREAM platform to enhance transparency and engage citizens in ensuring accountability. Other promising ideas are set to emerge shortly from the U.S.-led Powering a Just Energy Transition Green Minerals Challenge. Ultimately, as Ambassador Sparber said, countering green corruption is a whole-of-society effort. That is why partnerships and coalitions will play a key role in keeping up momentum on awareness, understanding and action. In addition to the Countering Environmental Corruption Practitioners Forum, powerful coalitions include the Extractive Industries Transparency Initiative, the Minerals Security Partnership and the Nature Crime Alliance. We welcome these partnerships and the continued support of forward-looking donors and institutions seeking to safeguard our planet’s future from corruption. Together, we will continue to keep pushing the issue of Green Corruption to the top of the agenda of global policymakers and practitioners – including at the forthcoming intergovernmental Conference of the States Parties to the UN Convention Against Corruption in December in the U.S. city of Atlanta. Learn more Watch the full event recording and see key quotes from speakers or view the individual speeches and panels Sign up to be notified of future events and publications on Green Corruption
Liechtenstein provides vital core funding to our Green Corruption programme for a second year
We are grateful to the Principality of Liechtenstein for its decision to continue and substantially increase its core contribution to our Green Corruption programme. The programme has gained significant momentum in 2021, responding to a clear need to address the “green corruption” that makes environmental crimes both possible and lucrative. In the last year, the team has provided financial investigations support in dozens of environmental crime cases in East Africa and expanded the programme to new partner countries in Africa, Latin America and Southeast Asia. New research, as part of joint projects with our Public Governance team, is illuminating the links between environmental crime and corruption. The programme’s Corrupting the Environment webinar series with the OECD covered seven virtual dialogues on critical issues of corruption, illicit trade and the environment. Liechtenstein’s core funding has been and will continue to be exceptionally welcome in funding these and other activities, such as responding with agility to the growing number of requests from our global partners for expert advice. Commenting on the decision, Ambassador Martin Frick, Director, Office for Foreign Affairs of the Principality of Liechtenstein, said: The Basel Institute’s Green Corruption programme matches many key priorities of our Multilateral Development Cooperation, such as strengthening the rule of law, combating corruption and international crime as well as protecting the environment. The core funding is an essential complement to more targeted project-based financing from the UK and US governments. Gretta Fenner, the Basel Institute’s Managing Director, noted: The continued support from our inaugural core donor Liechtenstein comes as the Green Corruption programme is undergoing a period of significant growth, opening up new presences in Peru, Bolivia and Indonesia. Liechtenstein's donation allows us to ensure that the growth is sustainable. In 2022, we aim to further incubate promising programme ideas and finding innovative entry points to tackle areas rife with corruption that have tremendous environmental consequences but are commonly overlooked by traditional conservation programmes. Examples include waste trafficking, which generates USD 10–12 billion per year in illicit funds. In this context, we will conduct a rigorous scan of high-corruption risk, high-potential environmental crime typologies that our unique skill set and context knowledge might be well placed to disrupt.
Basel Institute welcomes Liechtenstein as core donor to the Green Corruption programme
We are delighted to welcome Liechtenstein as an inaugural core donor to our Green Corruption programme. The programme applies anti-corruption, follow-the-money and governance approaches to critical issues of environmental degradation. Liechtenstein’s support and endorsement are particularly valuable as we ramp up and expand the programme, building on a strong base of evidence and experience gained through our efforts in the last years to tackle financial crime in illegal wildlife trade. Dr Katrin Eggenberger, Minister for Foreign Affairs, Justice and Culture, commented: Like the Basel Institute on Governance, I am extremely worried about the devastating impact of corruption on peace and security, sustainable development as well as human rights. We are a firm and early supporter of applying the follow-the-money approach to the critical issues of our times. Addressing corruption that harms our environment through the Green Corruption programme also helps to address human rights and governance challenges, which are both key priorities of Liechtenstein’s multilateral development cooperation. Echoing these sentiments, Gretta Fenner, Managing Director of the Basel Institute on Governance, said: Liechtenstein has been a strong partner of the Basel Institute and its International Centre for Asset Recovery for many years. We warmly welcome their support for our Green Corruption programme, which will allow us together with our donors to catalyse anti-corruption and follow-the-money approaches in the environmental sphere and thereby contribute to combating environmental degradation. Among recent initiatives of the Basel Institute’s Green Corruption programme is a joint dialogue series with the OECD exploring critical issues of environmental degradation through the lens of financial crime and illicit trade. The next events will take place on 27 January and 23 February – find out more and register here.