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PM urges world to fight corruption

Published 06/06/2015

David Cameron will tell the G7 that bribery allegations at Fifa should act as a spur to target corruption worldwide
David Cameron will tell the G7 that bribery allegations at Fifa should act as a spur to target corruption worldwide

Bribery allegations at Fifa should act as a spur for the international community to target the "cancer" of corruption in organisations, businesses and governments around the globe, David Cameron is to tell world leaders at a major summit.

The Prime Minister will use the G7 summit in Germany to call for an international effort to root out corruption, arguing that it is holding back economic growth and human development in countries all over the world.

He will condemn an international "taboo" on pointing the finger at corrupt institutions and say that the Fifa scandal has shown how shining a spotlight on an organisation can provide the trigger for cleaning up its operations.

Mr Cameron will join US president Barack Obama, French president Francois Hollande, Italian PM Matteo Renzi, Canadian PM Stephen Harper and Japanese PM Shinzo Abe for the two-day gathering, hosted at Schloss Elmau in the Bavarian Alps by Germany's chancellor Angela Merkel.

Mrs Merkel has put climate change and sustainable development at the top of the agenda for the annual summit of the world's leading industrialised economies beginning on Sunday, which will also focus on growth, security and the threat from terrorism and disease epidemics.

But Mr Cameron will argue that the issue of corruption - which he put at the heart of the UK's agenda for its presidency of the body in 2013 - has a bearing on all these areas and must be discussed openly as part of the debate.

He will cite World Bank estimates that corruption adds 10% to business costs worldwide, with one trillion US dollars (£650 billion) paid in bribes every year.

The Organisation for Economic Co-operation and Development (OECD) believes corruption costs around 5% of global GDP annually, while in developing countries it can add 25% to the cost of procurement, Mr Cameron will say.

Seven of the 10 most corrupt countries in sub-Saharan Africa are also in the bottom 10 on the human development index and infant mortality is twice as high in countries with the most corruption as in those with the least.

Mr Cameron will say that there is an onus on world leaders to do what they can to tackle the issue, and will call for action in the coming months to focus the efforts of the various international organisations tasked with combating corruption and ensure that they are working effectively with one another.

Anti-corruption measures should be at the heart of the new United Nations development goals for the coming 15 years due to be agreed in September, he will urge.

Speaking ahead of the summit, Mr Cameron said: " In the last fortnight we have seen the stark truth about Fifa. The body governing football has faced appalling allegations that suggests it is absolutely riddled with corruption.

"And (Sepp) Blatter's resignation this week presents an opportunity to clean up the game we love. It is also an opportunity to learn a broader lesson about tackling corruption.

"Just as with Fifa, we know the problem is there but there is something of an international taboo over pointing the finger and stirring up concerns. At international summits, leaders meet to talk about aid, economic growth and how to keep our people safe.

"But we just don't talk enough about corruption. This has got to change. We have to show some of the same courage that exposed Fifa and break the taboo on talking about corruption.

"Corruption is the cancer at the heart of so many of the problems we face around the world today. It doesn't just threaten our prosperity, it also undermines our security.

"Football is beginning a long journey to rid itself of corruption and it will take time, courage and determination to see through the reforms that Fifa needs. I believe world leaders must show the same courage and determination to tackle corruption around the globe. That will be my mission tomorrow at the G7 and in the months and years ahead."

Demonstrations over climate change, wealth inequality and the proposed Transatlantic Trade and Investment Partnership (TTIP) US/EU free trade deal are expected outside the heavily guarded G7 venue, with a protest camp set up in the nearby town of Garmisch-Partenkirchen and around 35,000 attending a pre-summit rally in Munich on Thursday.

In an editorial published in newspapers around the world, Mrs Merkel said that the G7 should be " a model for the necessary transition to a low­-carbon economy" and called for leaders to unite around a new international climate change agreement in Paris later this year.

But the German leader is coming under fire for her own country's reliance on coal as its primary source of energy.

Oxfam released a report arguing that coal is the biggest driver of global warming, with climate change gases from G7 coal plants totalling twice the total fossil fuel emissions from the whole of Africa.

The report calculated a total bill of 450 billion US dollars (£293 billion) by the end of the century for the damage resulting from climate change caused by G7 coal use, as well as the adaptation measures required to respond to it.

Urging G7 leaders to "go cold turkey on coal", the charity said the UK could feasibly become coal-free by 2023 by shifting to lower-carbon energy sources.

Oxfam's head of global policy and campaigns, Max Lawson, said: "The G7's addiction to coal is hiking up costs for developing countries and putting more and more people on the front line of climate change at risk of hunger. "

Meanwhile campaigners at Global Justice Now (GJN) said they expect a Europe-wide petition against the TTIP deal to hit two million signatures in the coming week.

GJN trade campaigner Guy Taylor said: "T here is clearly no mandate for the G7 leaders to be pushing ahead with this disastrous trade deal.

"TTIP may bring some economic benefits for a tiny handful of the business elite, but for the rest of us it would mean compromising vital public services, the stripping of regulations protecting labour rights and the environment, and a dramatic erosion of democratic process."

Diane Sheard, UK director of the One Campaign, said: "Corruption within Fifa should be a wake-up call for G7 leaders. Transparency is the only reliable vaccine against the disease of illicit finance, money-laundering and secret payments.

"The inability of law enforcement agencies and civil society to scrutinise data on budgets and financial flows within international institutions and governments will allow these corrupt practices to thrive.

"The G7 must work together to change the rules of the game, both this weekend and at the Financing for Development Summit in Addis Ababa, so that public funds are not misused."

Oxfam spokesman Jorn Kalinksi said: "David Cameron is right to put a spotlight on corruption, which is a problem for all countries across the globe.

"In 2010 alone, G7-based companies cheated Africa out of an estimated six billion US dollars (£3.9 billion) in an illicit form of tax dodging - trade mispricing.

"This is equivalent to more than three times the amount needed to plug the funding gaps to deliver universal health care in the Ebola affected and vulnerable countries of Sierra Leone, Liberia, Guinea and Guinea Bissau.

"Just as pressing is the legal but morally dubious practice of tax avoidance.

"The IMF estimates that one form of tax avoidance is costing developing countries 105 billion US dollars (£68 billion) a year - this is equivalent to the amount the G7 gives in overseas aid every year."

Save the Children director of policy and research Jonathan Glennie said: " David Cameron is right that tackling corruption is vital, but this can only happen if the G7 leaders themselves show leadership on the issue and redress the broken international tax system.

"They can start by establishing a new intergovernmental body on tax and make tax information public so it's easier to see when tax-dodging happens."

In a report being launched at the G7, Save the Children highlights a form of tax dodging known as "trade misinvoicing" which the charity says is costing Africa almost £10 billion a year in lost tax - enough to pay for 1.8 million health workers and save the lives of hundreds of thousands of children.

" Trade misinvoicing is illegal, immoral and undermines efforts to tackle poverty," said Mr Glennie. "While millions of children in Africa still lack basic healthcare and education, billions of dollars from these same countries are siphoned off by wealthy companies."

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