United Nations Convention Against Corruption: The Fall of an Ambitious Legal Regime

Siddharth Jain & Arkaneil Bhaumik  

Introduction

The fight against corruption has been a never-ending battle for States both in the international and national arena with international scholars arguing that it has enough opinio juris to be an ideal candidate to be crystallized into a jus cogens norm. The fight reached its success at the international level with the negotiation of the UN Convention Against Corruption 2003 (“UNCAC”) which is the only legally binding international anti-corruption treaty with a total of 186 States as parties to it. However, corruption scandals still plague the world 15 years after the adoption of the multi-lateral treaty, with the Convention seemingly failing in its basic objective of ‘prevention and eradication of corruption’.

In Part I, we analyze the method of review and implementation adopted by the UNCAC; in Part II we showcase four inherent lacunae in this particular procedure; in Part III we take the examples of China and India that account for almost 19.4 percent of the global trade, to highlight the ineffectiveness of the global legal regime created by the Convention. Finally, we suggest ways in which UNCAC can improve the implementation and review system.

Implementation of the UNCAC Convention

Unlike the previous regional treaties or conventions, the UNCAC covered corruption, both in public and private sectors, making it the most ambitious multi-party treaty on this issue.

The obligations imposed by the States to the Convention can be broadly divided into three parts based on the method of construction of the provisions by the drafters. First, the mandatory requirements, whereby the States have a compulsory legal obligation in implementing them. Secondly, the optional requirements, which requires a State to consider its Implementation in its municipal law. Thirdly, the Optional Measures that the Convention provides to be left to the consent of the States for implementation. So, the backbone of the Convention rests in the transportation of international obligation provided to the municipal structure of a country in order to establish a successful legal international regime (Article 65).

In one ‘Review Cycle’ each State party shall be reviewed by two other State parties, with one of the reviewing States from the same geographical region of the State under review. The selection of States and their two reviewers will be conducted by a draw of lots, a process which is overseen by the ‘Implementation Review Group’. In the beginning, each country shall fill a self-assessment checklist. The responses to this self-assessment checklist will be analysed by the two reviewing States who shall then prepare a ‘Country Review Report’ which will identify the successes, failures, observations of the State under review.

Lacunae in the review system: Too many cooks spoil the broth

Lack of transparency is one of the main reasons why corruption still persists in many parts of the world. As such, one of the aims of the UNCAC is to bring transparency in both the public and private sectors of the member States. Therefore, it is ironic that despite this textual adherence to transparency, the ‘Review Report’ of every State is mandated to be confidential, unless the State consents it to be released to the public or any other third State, other than the two reviewing States. This is highly problematic as it is very difficult for the general public and various non-governmental corruption watchdogs to keep a track of the corruption levels in various States. Hence, the lack of transparency decreases the credibility of the UNCAC’s review and implementation system.

Secondly, the pairing of the countries during the review system is done through a draw of lots. A country does not get to choose which two countries will review it, which is indeed an advantage. But many a times it becomes a practical nightmare, as there is a mismatch between the country which is getting reviewed and the country which is reviewing, it in terms of economic and political power. For example, China was reviewed by Vietnam and Bahamas in the first cycle of review. China annually invests huge sums of money in Vietnam mainly in developing its technological sector, and Vietnam is heavily dependent for on such investments from China in the development of its economy. This makes it really difficult for comparatively smaller economies to review bigger economies without technical hurdles and political pressure.

Thirdly, the legal regime created by the UNCAC is a perfect example of the adage:too many cooks spoil the broth”.  The Convention has a total of 186 members as of 25th June 2019, which is an advantage theoretically as it shows a global acceptance in the fight against corruption. But there is also a downside to this: the high number of countries leads to slow decision making, and often reviews are not completed on time. Further, the choice of deferment of review given to a country creates more logistical hurdles.

Lastly, the process of review is not thorough like other anti-bribery conventions like the OECD Anti-Bribery Convention. The review conducted by the UNCAC is not divided into clear cut stages, instead, the review of a member state has to be completed in just one review cycle. This makes the review very superficial and the country is not assessed fully. The practice is not conducive to the ambitious legal regime that the UNCAC aims to create, as most corruption is deep-rooted and requires thorough reviewing.

Failure of the UNCAC: China and India

China and India are both parties to the UNCAC, but their track record in implementing the Convention is poor. The reason for considering these two countries is because both these countries are economic powerhouses. They are major exporting countries whose anti-corruption measures and standards affect other exporting and importing countries around the world.

China

China’s average share of world exports amounts to around 10.8% from a period of 2014-17, making it the leading exporter in the world. China ratified the Convention in 2006 but the implementation of its provisions remains low, even after 12 years.

Transparency International (TI) in its 2018 Progress Report on Exporting Corruption categorized China falling under the category of ‘Little or No Enforcement’ of Corruption. The Chinese Government has not brought any foreign bribery cases or investigation during the years 2014-2017. In 2018, after increasing international pressure, the National Supervision Commission (NSC) was established by the Government which had broad enforcement powers under China’s municipal criminal legislation. Notwithstanding such measures, corruption thrives in China. Chinese Banks are a regular target for foreign regulators, and China’s largest state-owned bank the Agricultural Bank of China (ABC), was fined US$215 million dollars for hiding and omitting suspicious transactions at its New York Branch.

India

India is single-handedly responsible for over 2% of the world’s trade and the number will keep on increasing as its economy grows. Transparency International (TI) in its 2018 Progress Report on Exporting Corruption also categorized India as falling under the category of ‘Little or No Enforcement’ of corruption.

India ratified the UNCAC in 2011 but the implementation of the provisions in their municipal law has, much like China, been very poor. There has been no major foreign bribery case that has led to a successful conviction from a period of 2014-2017, but India has been rocked by high-level bribery scandals. Some of them include the Agusta Westland Chopper Scandal, the Rafale Deal controversy, all involving billions of dollars in corruption for public procurement. Notwithstanding its ratification of the UNCAC, India is yet to fulfil its Article 16 obligation under the UNCAC, which places a legally binding obligation on states to define and criminalize foreign bribery

Conclusion

The UNCAC has been a clear failure as far as economically powerful and developing States like China and India are concerned. The intention of the drafters of the Convention was novel, yet it remains an only a piece of paper if States fail to implement it in their domestic regime. The main lacunae remain in the lack of substantive incentive given to the States for implementation of the provisions of the Convention. Consequently, the ‘Conference of Parties’ under the Convention should draw up an ‘Incentive Based Model’.

For major trade players like China and India, mere ratification of UNCAC is not enough. The countries should also join the Convention. This is more so based on its effective 4- Stage Monitoring Process for the implementation of the Convention. The implementation is so thorough that TI calls it the ‘Golden Standard’ of monitoring. The negotiation for India, China and Singapore to join the OECD Anti-Bribery Convention is on-going with the OECD Working Group and it will hold the countries in good stead in rooting out corruption.

Siddharth Jain & Arkaneil Bhaumik are law students at National Law University, Odisha.

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