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Diplomacy in Action

Transforming Partnerships Across Asia and the Pacific To Combat Corruption and Ensure Ethical Conduct: Open Government, Clean Trade, and Integrity in Markets and Supply Chains

David M. Luna
Director for Anticrime Programs, Bureau of International Narcotics and Law Enforcement Affairs
New Delhi, India
September 27, 2011


As delivered


I am honored to have been invited to New Delhi to attend the 16th Steering Committee Meeting of the ADB/OECD Anticorruption Initiative for Asia and the Pacific and to present this morning the work program in the Asia Pacific Economic Cooperation (APEC) forum on combating corruption, especially in my capacity as the 2011 Chair of the APEC Anticorruption and Transparency (ACT) Experts’ Working Group.

I would like to thank the Asian Development Bank (ADB), the Organization for Economic Cooperation and Development (OECD), and the Government of India for their invitation and warm hospitality, and I hope that together we can chart a vibrant partnership between APEC and your initiative – and among our respective membership – to promote greater integrity and to prevent, investigate, and prosecute corruption and bribery across Asia and the Pacific.

Before outlining the work of the United States as host of APEC in 2011 and our ACT anti-corruption initiatives and capacity-building programs – including priorities that we are advancing this year as we march towards the APEC Leaders Week and Summit in Honolulu, Hawaii, November 8-13, 2011 – I want to say what a privilege it is for me personally to return as a participant in your Steering Committee meetings. I recall fondly being part of the Advisory Group at the first meeting in Japan in 2001 and the meeting in Malaysia in 2003.

Over the years, I have met many good friends and am excited to meet new friends here this week and to explore continued synergies and collaborations that strengthen regional cooperation via collective action to combat corruption. It is also good to see some of my APEC ACT colleagues here at these meetings, including past and future ACT chairs: Korea (2005), Vietnam (2006), Australia (2007), Singapore (2009), Japan (2010), and Indonesia (2013). I would also like to give a special thanks to the Government of Thailand and my very good friend Professor Pakdee Pothisiri, Commissioner of the National Anti-Corruption Commission (NACC). It was because of Thailand’s leadership in 2003 that the APEC Leaders agreed to make the fight against corruption a priority, a commitment that led to the creation of the ACT and the Santiago Commitment in 2004.

APEC 2011: Economic Growth, Expansion of Trade and Investment, and Clean Markets

APEC is the premier Asia-Pacific economic forum through which 21 economies have united to build a dynamic and harmonious Asia-Pacific community by championing free and open trade and investment, promoting and accelerating regional economic integration, encouraging economic and technical cooperation, enhancing human security, and facilitating a favorable and sustainable business environment.

The 21 APEC economies are as follows: Australia; Brunei Darussalam; Canada; Chile; People's Republic of China; Hong Kong, China; Indonesia; Japan; Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; The Republic of the Philippines; The Russian Federation; Singapore; Chinese Taipei; Thailand; United States of America; and Viet Nam. Twelve of our APEC members are also active in your initiative.

APEC’s 21 member economies today account for 55 percent of global GDP, 43 percent of world trade, and comprise a market of 2.7 billion consumers.

For the United States, APEC accounts for 58 percent of U.S. goods/exports, and seven of our top trade partners are in APEC. Last year alone, U.S. exports to APEC economies grew much faster than exports to the rest of the world. Due to the dynamism of APEC markets, a 5 percent increase in exports to APEC economies would add hundreds of thousands of jobs to the U.S. economy.

So as we embark on our collaboration with the ADB/OECD anticorruption initiative and other international partners to achieve shared prosperity and economic regional partnerships, we must ensure that we similarly develop a shared framework based on not only reasonable, rules-based approaches but also on open, free, transparent, and fair principles. We believe that such a regional architecture would benefit developed and developing economies alike by transforming and expanding markets, encouraging innovation, and ensuring cleaner forms of public and private governance for markets across the Asia Pacific region.

As the host of APEC in 2011, the United States is focusing on three priority themes for this year, reflecting many of the challenges and opportunities facing public and private sectors across the Asia Pacific region:

  • Strengthening regional economic integration and expanding trade;
  • Promoting inclusive, sustainable, green growth; and
  • Advancing regulatory convergence and cooperation. 

With these priorities in mind, I would like to raise three questions for consideration: First, why are transparency and effective anti-corruption measures critical to our future? Second, why are they indispensable tools for long-term, sustainable growth and regional prosperity? And finally how can we partner to advance our mutually-shared agenda? I hope that today’s discussion will help us leverage our energies and harness our talents and capacities to achieve cleaner trade and more open governments. 

Ensuring Greater Integrity in APEC Economies, Markets, and Supply Chains

Let me start with a well-known truism: Governments are most effective in promoting economic competitiveness, growth, and investment when their communities and its people have confidence in the stability and soundness of its institutions. Governments can faithfully and judiciously invest the public’s trust by adopting effective anticorruption policies that put accountability front and center, demonstrating to their people that they are working for their communities with the highest levels of integrity. 

At the United Nations General Assembly meetings last week, the United States and other members of the Open Government Partnership acknowledged “that people all around the world are demanding more openness in government . . . and are calling for greater civic participation in public affairs, and seeking ways to make their governments more transparent, responsive, accountable, and effective.” Participating governments also agreed to accept responsibility for seizing this moment in time “to strengthen [their] commitments to promote transparency, fight corruption, empower citizens, and harness the power of new technologies to make government more effective and accountable.”

Through the Open Government Dialogue, India and the United States are working together to create “,” a joint, open source, e-governance application. It will be available for implementation by countries globally, encouraging governments around the world to develop open-data sites that promote transparency, improve citizen engagement, and engage application developers in continuously improving these efforts. 

As ACT Chair, I can report to you that President Barack Obama and Secretary of State Hillary Rodham Clinton are working together with our APEC partners, and globally, to make anticorruption a priority. In remarks made at the OECD Session on Development and Gender this past May, Secretary Clinton observed that corruption, lack of transparency, and poorly functioning governance systems "not only deprive government of revenues; they inflict a quieter and in some ways an even more dangerous cost as well, because they corrode citizens’ trust in each other and in their government. And when those bonds of trust crumble, it becomes much more difficult for communities and countries to make progress."

In APEC, we are addressing corruption by sharing our good governance practices and experiences with each other, including by exchanging information on our respective laws, what we do to publicize our enforcement efforts, and what our respective business communities are doing to ensure that they have effective compliance programs to prevent and detect corruption and bribery. Moreover, we are also investing in a broad array of capacity-building programs that help sharpen the capabilities of the APEC anti-corruption agencies and law enforcement communities to prevent, investigate, and prosecute corruption.

Reducing Illicit Arbitrage Opportunities for Cleaner Markets and Supply Chains

In November 2010, in Yokohama, Japan, APEC Leaders and Ministers agreed to leverage collective action to combat corruption and illicit trade by promoting clean government, strengthening relevant judicial, regulatory, and law enforcement systems, and enhancing regular reporting of our efforts to implement anticorruption commitments to build communities of integrity.

‪We can appreciate why Leaders remain focused on good governance and transparency.

Corruption and bribery are not only barriers to economic growth, trade and investment, and market integrity, but also weaken the entrepreneurial spirit that nurtures innovation, openness, and competiveness.

Corrupt practices also corrode the pillars of free and accountable societies, especially at a time when our citizens are demanding more of our governments and expect to be governed with the highest levels of integrity.

By leading by example, APEC is demonstrating that ethical behavior among public officials can anchor the trust and confidence of the public and markets alike.

As Secretary Clinton emphasized at the 2011 APEC SOM I meetings in Washington, DC, as our communities demand greater accountability, transparency and participatory governance, we must deliver.

And we are. I have just returned from San Francisco where the APEC ACT discussed a robust plan of action for combating corruption in APEC economies as part of our 5-year strategy and discussed ways to advance our 2011 work program under the following three guiding principles: 1) combat corruption and illicit enrichment for more clean and open governments; 2) combat bribery through public-private partnerships that anchor market integrity; and 3) combat corruption and illicit trade to ensure greater supply chain integrity.

On the first guiding principle, through collective action, we are contributing to influence positively APEC’s open and transparent framework, including through the Santiago Commitment and Course of Action to Fight Corruption and Ensure Transparency, the APEC Code of Conduct for Business, the Conduct Principles for Public Officials, and the Complementary Anti-Corruption Principles for the Public and Private Sectors, as well as the development this year of principles to strengthen financial/asset disclosure systems that encourage officials to perform their duties in accordance with public interest, as opposed to self-interest. These principles, we hope, will also help investigators and prosecutors identify and corroborate illicit enrichment, providing greater accountability and building public trust.

Consistent with the APEC Santiago Commitment, in APEC, we are committing ourselves to implementing the UN Convention against Corruption (UNCAC) and undertaking a full review on a wide range of measures, including criminalization, preventive measures, and the recovery of stolen assets.

The ACT also continues to work on denying safe haven to kleptocrats around the world, to bar their illicitly-acquired assets, and to give notice that continued theft from our economies will not be tolerated. Following the money must be an integral part of our strategies to deny criminals and their networks access to entities and mechanisms used to hide and launder illicit criminal proceeds. Working with Peru and China in APEC, for example, we launched a very aggressive initiative to strengthen capacities to combat kleptocracy. In 2006, in Shanghai, the United States and China led APEC efforts to take strong enforcement actions to deny safe haven to corrupt individuals and prevent them from enjoying the proceeds of their illicit activities. The ACT commends Thailand and the National Anti-Corruption Commission (NACC), and others, for leading ACT capacity-building efforts in recent years to combat money laundering and help track the criminal proceeds of kleptocrats and illicit networks alike. Similarly, we applaud Indonesia for being co-Chair of the G20 Anticorruption Working Group, and for serving next year as a Vice Chair in the ACT (and host of APEC in 2013).

Depriving illicit networks of their profits and funding is one of the most effective ways to deter them. This requires a holistic, comprehensive anti-money laundering regime with the ability to trace, freeze, and seize assets related to illicit financial flows, while addressing both formal and informal financial networks.

Second, in the ACT, we are also taking a comprehensive and holistic approach to combat corruption and illicit trade to ensure integrity in global markets and supply chains and to sustain our shared prosperity. We must confront criminal entrepreneurs and illicit market actors that navigate between licit and illicit worlds, tainting supply chains and compromising the integrity of our markets and institutions. Moreover, tainted supply chains, compromised markets, and the corruption that accompanies illicit trade also hurt our legitimate businesses; diminish brand identities, reputations, and returns on research and innovation; and increase operating costs and investment risks to all market investors.

Working together in APEC, we are ramping up efforts to investigate and prosecute the illicit actors who produce and sell harmful counterfeits such as counterfeit medicines, and we are simultaneously strengthening the integrity of our supply chains, as well as our global financial system.

At the APEC September 2011 SOM 3 meetings in San Francisco, investigators, prosecutors, and regulators, from the U.S. Department of Homeland Security (DHS), the U.S. Department of Justice (DOJ) including Homeland Security Investigations (HSI) , the Federal Bureau of Investigations (FBI), the U.S. Food and Drug Administration (FDA), and others, coordinated with their APEC counterparts by organizing an APEC workshop on Investigating and Prosecuting Corruption and Illicit Trade: Stemming the Flows of Counterfeits and Dismantling Illicit Networks to impart best practices, law enforcement techniques, share case studies, and explore possible tools that can equip APEC economies to mitigate vulnerabilities, dismantle transnational illicit networks, and strengthen integrity in supply chains.

In the next month, we will submit to APEC Senior Officials the ACT’s recommendations to launch across APEC a public-private partnership to dismantle illicit networks at every link in tainted supply chains and prosecute criminal entrepreneurs who arbitrage weak and corrupt law enforcement systems and exploit internal border controls for illicit gain and enrichment.

Breaking the corruptive power of transnational illicit networks globally is a key objective for the United States. On July 25, 2011, the White House released the Strategy to Combat Transnational Organized Crime. We will work with international partners to attack the financial underpinnings of transnational criminal organizations; strip them of their illicit wealth; and sever their access to the financial system. In targeting illicit entrepreneurs and illicit networks that pose grave threats to our citizens’ safety—including those that sell and distribute substandard, tainted, and harmful counterfeits—we will also expose criminal activities hidden behind legitimate fronts and protect strategic markets, as well as the integrity of the global financial system. The United States will also work with other committed partners to disrupt crime-terror networks all around the world including in South Asia.

Combating Bribery and Forging Public-Private Partnerships on Market Integrity

Finally, when both public and private sectors work together, we can create a culture of integrity that has a lasting impact. The private sector can lead in ensuring that corruption does not corrode the foundations of an efficient and transparent market system, which is fundamental to economic security, sustainability, and prosperity for all economies. We can create a better future by uniting in our support of accountability and good governance and against corruption. Such action has been evidenced in recent years in India, where the Global Corporate Governance Forum has worked in partnership with the regulator, the National Institute for Securities Markets, and one of the country’s leading business associations, the Confederation of Indian Industry (CII), to raise understanding and awareness of the importance and modalities of good corporate governance. The regulator brings to this exercise the imprimatur of the government, while CII lends the weight of prominent Indian industrial concerns, creating a formidable alliance.

As the OECD and World Bank Group – key APEC partners – have underscored as part of their global corporate governance forum, “encouraging high quality corporate governance practices as a linked element of anti-corruption measures, are the twin pillars of developing fair and efficient markets. Both are relevant to broader efforts to promote sustainable economic development and democracy. They depend upon implementation by the private sector, with the active support of civil society and stakeholders, within a framework of law and regulation provided for by government. Achieving effective measures therefore requires the active partnership of all sides” in a full practical engagement for reform, modernization, and good governance.

Through our continued cooperation with the private sector, we are leveling the playing field across APEC economies. Moreover, in working with the APEC Business Advisory Council (ABAC), and other partners, we are ushering in a new era of cooperation between the public and private sector that will help forge a more connected, innovative, and dynamic Asia Pacific region. Combating corruption, achieving sustainable development and dismantling illicit markets and networks also requires collective action and a shared responsibility among APEC partners, as well as close coordination with relevant regional and international organizations that have important expertise and capacities to help improve the overall governance climate in the Asia-Pacific region.

The ACT has a strong record of achievement of strengthening cooperation with other international and regional organizations. We have leveraged new and exciting collaborative platforms with the United Nations Office on Drugs and Crime (UNODC), the World Bank, the Asian Development Bank (ADB), OECD, ASEAN, G20, INTERPOL, and the International Anticorruption Academy (IACA), as well as with civil society groups such as Transparency International.

I have already mentioned the good work that many of our APEC ACT colleagues are doing in combating corruption including, for example, Australia, Chile, China, Korea, Indonesia, Thailand and Vietnam. Next year, Russia will host APEC and we look forward to continue to advance our public-private partnerships to combat corruption and bribery especially tied closely to the expansion of our investment and trade agenda. In addition we would like to congratulate Russia for joining the OECD Working Group on Bribery; we look forward to its ratification of the anti-bribery convention itself. The rigorous peer review that is at the heart of the Working Group’s success will help Russia to intensify its efforts against foreign bribery. The fact that India, China and Indonesia all are participating in the OECD Working Group on Bribery as observers is another positive step and we hope that they will consider full membership in future.

The Way Forward: Greater Integrity in Economies, Markets, and Supply Chains ‪Across Asia and the Pacific

In closing, it is great to be meeting with you here in India, and I applaud the diversity of your ADB/OECD Steering Group membership.

Our institutions share many common goals. Similar to APEC’s approach, you are leveraging alliances with communities and civil society groups to mobilize public support to address corruption. I have also taken note of your recent efforts to promote more active judiciaries, parliamentarians, and your ideas on access to information tools and the promotion of social anticorruption and media campaigns that can help to support resiliency and stability and to build a culture of integrity. As we nurture the network of government and business leaders that support innovation in the vibrant sectors of tomorrow – such as computer and high technology, biomedical, energy and space – these issues become even more important to government officials and entrepreneurs to create the right governance conditions for new markets and investment frontiers to thrive across our regions.

India’s adoption of anticorruption commitments as part of the G20 and its ratification of UNCAC send an important signal to the public and to businesses that tackling corruption is a high priority. An even more important step is to implement those commitments, to put them into practice, whether they are about prevention or transparency or law enforcement. Our experience is that creating momentum for reform, for implementation of these kinds of commitments, requires government leadership as well as support and expertise and oversight from civil society and the private sector. A partnership between government and the public is essential. Partnerships among countries can also help by sharing experiences among peers. That is one hallmark of APEC ACT, and one important value added of the ADB/OECD initiative. The United States is pleased to partner with other economies through these frameworks and bilaterally.

Thank you for the opportunity to outline the APEC ACT’s work program. I hope we can develop pragmatic and collaborative joint workshops, from time to time, that will enhance our commitment to combat corruption and illicit trade and strengthen integrity across our respective economies.

Thank you.

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