The Panama Papers, Corruption and the Missing Solution

The below article was written in reaction to the recent Panama Papers leak and Anti-Corruption Summit hosted in the UK. I would love to hear any reactions and specifically from those who work on anti-corruption: how has a legal empowerment approach improved your efforts; what are the challenges you continue to face and how can the legal empowerment community collectively respond to these challenges; how might revelations from the Panama Papers leak or announcements made at the Summit impact your work?

@ismailasall @kanchikohli @mustafa_mahmoud @sonkitaconteh @elliefeinglass @vivekmaru @lottateale @michaelotto @abigailmoy would be great to hear from your experiences or have you bring in partners to this discussion.


The role of law is to provide safeguards and protection for us all. But when the law resides in the hands of a few, those few have the power to ignore it, evade it, or manipulate it to advance their own interests – often at the expense of others. Such injustices occur around the world everyday, in various forms. They can affect an individual, a family, a community, a nation, or, as in the case of the Panama Papers, the world.

The 11.5 million leaked documents that make up the Panama Papers reveal that legal professionals at Mossack Fonseca law helped set up tens of thousands of offshore companies. While these shell companies are not technically illegal, the Panama Papers have shown that they carry out and hide a wide array of serious crimes, including, but not limited to, tax evasion. Mossack Fonseca reportedly “found allies and clients in major law firms in virtually every nation”.

The unknown whistleblower(s) behind the leak cited ‘the scale of injustice’ as their motivation for releasing the documents. The trillions of dollars siphoned out of countries, particularly from developing and emerging economies, is done at the expense of ordinary citizens. According to the Tax Justice Network, just 1% of this mountain of offshore wealth would yield more than $120bn a year in tax. This is close to the entire $131bn global aid budget. Offshore wealth is expanding inequality by hiding money that should be going towards public services like healthcare, education, and legal services for those who cannot afford or access it. This act of corruption is an injustice of global proportions.

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Yesterday, David Cameron hosted over 40 countries at the Anti-Corruption Summit in London. Although the summit was planned prior to the Panama leak, it could not have been better timed. With the world’s attention currently fixed on corruption, the summit looked to galvanize and coordinate action for developing global tax regulations, closing legal loopholes that permit corruption, and increasing the transparency of lawyers, bankers and other professionals who can facilitate financial secrecy. In a promising start, the UK, the U.S., Nigeria, the Netherlands, and South Africa have all announced a package of steps to stop global corruption. A new global plan was also announced for the return of stolen assets.

These international reforms are important, but they will not solve the problem on their own. Top-down or purely government-run anti-corruption initiatives have proven to be of limited effectiveness and sustainability. Implementation and enforcement remain a major challenge. To bring about lasting change we need to devolve the powers of governance from the elites to the billions who currently live outside of the protection of the law. We need legal empowerment.

Legal empowerment practitioners around the world help citizens to understand, use, and shape the law to ensure justice for those who need it most. Armed with legal knowledge and skills in advocacy, litigation, mediation, and education, these community paralegals and grassroots legal advocates empower ordinary people to defend their rights, hold those in power accountable and fix broken systems. They have successfully confronted stark imbalances of power between citizens and private firms, between citizens and the state, and between citizens and regressive local norms.

In apartheid South Africa, community paralegals mobilized people to confront and change unjust laws and governance structures. Today, they assist clients to access government services and enforce new legislations and protections. In Mexico, local organization Ciudadanos en Apoyo a los Derechos Humanos has helped prisoners eligible for early release access their records which were unfairly being withheld by officials. Over 40% of those prisoners secured early release based on the records they obtained. And earlier this year, in Sierra Leone, community paralegals working with Namati helped a community win back land that was sold to a Chinese rubber company without their consent.

Grassroots legal advocates in Mozambique speak with a client

The impact of legal empowerment efforts extends beyond individual cases. By equipping clients with knowledge of their rights, the laws, and the legal processes, they are able address future injustices and hold those in power to account. The aggregate data collected from grassroots experience also creates a powerful empirical basis from which to advocate for systemic reform. It can lead to positive changes in the law itself, and in the institutions by which the law is applied.

Yet, to date, most governments have overlooked the vital role of legal empowerment. Governance and rule of law make up a small and declining share of official development assistance. Between 2005 and 2013 only 1.8% of aid has gone to the justice sector, compared to 7.5% for education and 11.7% for health.* Of that limited funding, the vast majority goes to state institutions rather than civil society organizations.

Yesterday’s Anti-Corruption Summit was another missed opportunity for governments to provide direct support for legal empowerment work. But the initiatives announced still hold promise. The planned return of stolen assets, for example, could be directed to funding legal empowerment work or anti-corruption commissions.

World leaders must commit to providing greater support to legal empowerment initiatives if we are to tackle injustice and corruption. More must be done to help put the power of the law in the hands of the people.

*Source: forthcoming report June 2016, Developing a portfolio of financially sustainable, scalable basic legal service models, Law and Development Partnership


This is a companion discussion topic for the original entry at https://namati.org/news/the-panama-papers-corruption/<img
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Thank you @staceycram for your contribution on the role of legal empowerment in anticorruption solutions. The legal empowerment alternative on anticorruption strategies is more and more accepted because of the very limited results of traditional horizontal accountability in enforcing anticcoruption related laws. Legal empowerment forcefulness in the fight against coccuption, in my view, is more perceptible in democratic institutions (governement and local autorities), than in the judiciary where social accountability is the more used and more powerful strategy. The role of legal empowerment in fighting corruption can be seen at three levels.
First, in LE, paralegals use education and sensitization on law in order to help people understand their rights, governement obligations and the system. This education, in most case, alllows people to distinguish corrupt practices from legal decisions of authorities. Tansparency International used this method and has also organised many meetings in which victims of corruption told their experiences, so as to allow each person to learn more from others. Second, LE can push government to be transparent in its decisions. In some countries, people use “pocedural rights” to impose transparency to local authorities. Those procedural rights are right to information and paricipation. Right to information is a precious mean to push authorities to be transparent in their actions because when people have the possibility to know and to control administrative decisions, risks of corruption are decreased. Concerning the right to participation, it allows people to be consulted in some decisions, sush as land rights, natural ressources exploitations. This participation of local people is an afficace way to reduce the flexibility of authorities to make corrupt practices. Third, LE use legal mobilisation to combat corruption. This means that, paralegals, NGOs and local communities often resort to litigation to punish author of corruption or to annul a decision taken in an intention of corruption. There are many case, reported by Transparency International where judiciary has annuled of jailed authorities who have accepted bribery. The potential of LE to combat corruption is enormous, but the fight against corruption is not always the main goal sought in LE activities. Paralegals, in many cases focus more on land rights, labor rights, health rights than in anticorruption legal empowerment. It is rare to see some examples of legal litteracy that aim to fight against corruption, whereas in social accountability the fight against corruption is a fundamental objective. An other problem is the mobilization capacity of poor peoples and their allies. In many cases there are so fews in number that they cannot reach government level when voicing their need to reform anticorruption related laws so as to have more transparency and more law encorcement to punish authors of corruption.

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