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Showing posts for "Rule of Law"

This Week in Markets and Democracy: Ericsson Corruption Probes, EU Spurs Antigraft Action, Modi Courts FDI

by Shannon K. O'Neil
A banner reading "Corruption kills" is placed among candles, lit in memoriam of more than 50 people killed when a fire erupted during a rock concert in a night club in Bucharest, at a memorial in Timisoara, Romania in this November 1, 2015 picture. Big public demonstrations following a fire in a Bucharest nightclub in which more than 50 people died reflect growing anger at a culture of official graft in one of Europe's most corrupt countries (Reuters/Inquam Photos). A banner reading "Corruption kills" is placed among candles, lit in memoriam of more than 50 people killed when a fire erupted during a rock concert in a night club in Bucharest, at a memorial in Timisoara, Romania in this November 1, 2015 picture. Big public demonstrations following a fire in a Bucharest nightclub in which more than 50 people died reflect growing anger at a culture of official graft in one of Europe's most corrupt countries (Reuters/Inquam Photos).

Corruption Probes Spook Ericsson Investors
Both U.S. and Greek authorities are taking on Ericsson AB, one of the world’s biggest telecoms companies, for alleged corruption. The United States is investigating its operations in both China and Romania for potential Foreign Corrupt Practices Act (FCPA) violations. The Greeks summoned seven current and former executives over whether the Swedish multinational bribed government officials to win a $597 million defense contract in 1999. These inquires come at a time when the company faces stiff competition, declining sales, and falling share prices. Ericsson is now trying to ease investors’ concerns, hoping the revelations do not get worse.

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This Week in Markets and Democracy: International Labor Conference, Brazil’s Corruption Resignations, Politicians vs. the Press

by Shannon K. O'Neil
Garment workers rest inside a factory after their lunch time in Phnom Penh October 8, 2015. Cambodia agreed on Thursday to raise the minimum wage for workers in its crucial textiles and footwear sector to $140 per month from next year, short of the figures demanded by powerful trade unions long at odds with the government over pay (Reuters/Samrang Pring). Garment workers rest inside a factory after their lunch time in Phnom Penh October 8, 2015. Cambodia agreed on Thursday to raise the minimum wage for workers in its crucial textiles and footwear sector to $140 per month from next year, short of the figures demanded by powerful trade unions long at odds with the government over pay (Reuters/Samrang Pring).

Fast Fashion Still Exploits Workers
While multinational retailers such as H&M, Gap, and Walmart can get a swimsuit or sundress from the factory floor to customers’ closets within weeks, new reports show they still do not protect the workers that make this possible. Three years after Bangladesh’s Rana Plaza building collapse, which killed over a thousand workers and injured another 2,500, Walmart refuses to disclose details on factory safety inspections. Documents from a more forthcoming H&M show nearly 80,000 Bangladeshi workers make their clothes in workrooms without basic safety measures such as fire exits. And Gap has balked at Cambodian worker demands for a living wage—they now earn as little as $5 a day. At this week’s International Labor Conference in Geneva, unions and other groups will try to force measures to improve workers’ rights by holding multinationals more accountable.

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The Anticorruption Boom and U.S. Foreign Policy

by Matthew Taylor
British Prime Minister Cameron is joined by Jim Yong Kim, President of the World Bank Group, (left) Sarah Chayes, a senior associate in the Democracy and Rule of Law Program, (second left) US Secretary of State John Kerry, (third from left) and Nigerian President Muhammadu Buhari, (right), as he opens the international anti-corruption summit on May 12, 2016 in London, England (Reuters/Dan Kitwood). British Prime Minister Cameron is joined by Jim Yong Kim, President of the World Bank Group, (left) Sarah Chayes, a senior associate in the Democracy and Rule of Law Program, (second left) US Secretary of State John Kerry, (third from left) and Nigerian President Muhammadu Buhari, (right), as he opens the international anti-corruption summit on May 12, 2016 in London, England (Reuters/Dan Kitwood).

April and May brought some of the most important movement on the anticorruption front of any two-month period in the past decade. Recapitulating briefly:

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This Week in Markets and Democracy: Deadly Kenyan Protests, Vietnam’s Labor Rights, Still No Haiti Election

by Shannon K. O'Neil
A riot policeman fires a teargas canister to disperse supporters of Kenya's opposition Coalition for Reforms and Democracy (CORD) during a protest at the premises hosting the headquarters of Independent Electoral and Boundaries Commission (IEBC) to demand the disbandment of the electoral body ahead of next year's election in Nairobi, Kenya, May 23, 2016 (Reuters/Thomas Mukoya). A riot policeman fires a teargas canister to disperse supporters of Kenya's opposition Coalition for Reforms and Democracy (CORD) during a protest at the premises hosting the headquarters of Independent Electoral and Boundaries Commission (IEBC) to demand the disbandment of the electoral body ahead of next year's election in Nairobi, Kenya, May 23, 2016 (Reuters/Thomas Mukoya).

Electoral Violence Starts Early in Kenya
In Kenya, police cracked down on opposition protests, killing three and injuring more. With elections still more than a year away, the Coalition for Reforms and Democracy (CORD) party is demanding that current electoral officials resign for corruption and bias toward President Uhuru Kenyatta’s ruling Jubilee coalition. In the wake of the bloodshed CORD halted the demonstrations and agreed to negotiations, responding to other governments’ calls for dialogue. But given Kenya’s history of electoral violence and impunity, many expect clashes to continue.

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This Week in Markets and Democracy: UK Anticorruption Summit

by Shannon K. O'Neil
British Prime Minister Cameron is joined by Jim Yong Kim, President of the World Bank Group, (left) Sarah Chayes, a senior associate in the Democracy and Rule of Law Program, (second left) US Secretary of State John Kerry, (third from left) and Nigerian President Muhammadu Buhari, (right), as he opens the international anti-corruption summit on May 12, 2016 in London, England. Leaders from many of the worlds nations are gathering in London for the summit, which is aimed at stepping up action to tackle the problem of corruption (Reuters/Dan Kitwood/Pool). British Prime Minister Cameron is joined by Jim Yong Kim, President of the World Bank Group, (left) Sarah Chayes, a senior associate in the Democracy and Rule of Law Program, (second left) US Secretary of State John Kerry, (third from left) and Nigerian President Muhammadu Buhari, (right), as he opens the international anti-corruption summit on May 12, 2016 in London, England. Leaders from many of the worlds nations are gathering in London for the summit, which is aimed at stepping up action to tackle the problem of corruption (Reuters/Dan Kitwood/Pool).

British Prime Minister David Cameron gathered government officials, civil society advocates, and business leaders in London for a one-day summit on corruption, a global “cancer” hindering economic development and growth. Forty countries signed a Global Declaration Against Corruption, promising to prevent, uncover, and punish corruption “wherever it exists.” Many countries followed up the lofty rhetoric with concrete commitments: twenty-one pledged stronger legislation for returning stolen assets, fourteen will open public contracts to scrutiny for the first time, and the UK and five other countries will jointly launch a new anticorruption center to help investigate and prosecute cross-border cases.

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This Week in Markets and Democracy: Protectionism Rises, Mexico Anticorruption Bill Delayed, How Corruption Affects Business

by Shannon K. O'Neil
Protesters demonstrate against Transatlantic Trade and Investment Partnership (TTIP) free trade agreement ahead of U.S. President Barack Obama's visit in Hannover, Germany April 23, 2016 (Reuters/Kai Pfaffenbach). Protesters demonstrate against Transatlantic Trade and Investment Partnership (TTIP) free trade agreement ahead of U.S. President Barack Obama's visit in Hannover, Germany April 23, 2016 (Reuters/Kai Pfaffenbach).

Protectionism by the Numbers
It is not just anti-trade rhetoric spreading on both sides of the Atlantic; it is also policies. The Global Trade Alert, an online index that monitors trade policy, reports a rapid rise in protectionist measures worldwide since 2008. The database documents over 5,000 new barriers to trade, including import quotas, stricter rules for migrant workers, and local content requirements. The United States leads this turn toward protectionism, creating more than eighty new rules in the last year alone. These measures are one of the main causes slowing global trade.

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This Week in Markets and Democracy: Rana Plaza Anniversary, Press Freedom Declines, Haiti Election Troubles

by Shannon K. O'Neil
A relative holds up a picture of a garment worker in front of the rubble of the collapsed Rana Plaza building (Reuters/Andrew Biraj). A relative holds up a picture of a garment worker in front of the rubble of the collapsed Rana Plaza building (Reuters/Andrew Biraj).

Labor Standards Three Years After Rana Plaza
Three years after Bangladesh’s Rana Plaza garment factory collapse killed or injured over 3,000 people, labor rights remain tenuous. In the wake of the disaster apparel brands, suppliers, and the Bangladeshi government created the Alliance for Bangladesh Worker Safety, a partnership to improve conditions by setting standards and increasing inspections. The Alliance has worked with factories to build emergency exits, install fire hydrants, and rewire electrical systems. It has also blacklisted the worst offenders. Yet it only encompasses those operating under formal contracts. Over half of the nation’s 7,000 factories work in the informal economy. Here, the Bangladeshi government doesn’t enforce Alliance standards, leaving these workers vulnerable.

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This Week in Markets and Democracy: Peru’s Elections, Corruption Arrests, and Panama Papers Response

by Shannon K. O'Neil
People walk past campaign electoral signs of Peru's presidential candidate Keiko Fujimori in Cuzco, Peru, April 11, 2016 (Reuters/Janine Costa). People walk past campaign electoral signs of Peru's presidential candidate Keiko Fujimori in Cuzco, Peru, April 11, 2016 (Reuters/Janine Costa).

Peru’s Presidential Candidates Head to Second Round
On June 5, Keiko Fujimori, the daughter of former president Alberto Fujimori, will face former finance minister Pedro Pablo Kuczynski in Peru’s presidential runoff election. Questionable decisions by Peru’s electoral board in the first round—disqualifying two competitive candidates and dismissing charges of vote-buying against Fujimori and Kuczynski—boosted Fujimori and clouded the vote’s legitimacy. Now the question will be the anti-Fujimori vote and whether Kuczynski (not a natural campaigner) can consolidate her opposition—much as current president Ollanta Humala did when he beat her in 2011’s second round. Although Fujimori is popular among the rural poor, many remember the corruption and human rights abuses of her father’s presidency, and fear that she could follow in his footsteps.

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This Week in Markets and Democracy: Brazil’s Crisis Snowballs, Deferred Corruption Prosecutions, U.S. Bets on Cuba

by Shannon K. O'Neil
Brazil's President Dilma Rousseff (R) greets former president Luiz Inacio Lula da Silva during the appointment of Lula da Silva as chief of staff, at Planalto palace in Brasilia, Brazil (Reuters/Adriano Machado). Brazil's President Dilma Rousseff (R) greets former president Luiz Inacio Lula da Silva during the appointment of Lula da Silva as chief of staff, at Planalto palace in Brasilia, Brazil (Reuters/Adriano Machado).

Brazil’s Corruption Crisis Snowballs
Brazil’s corruption investigations expanded to encompass the former and current president. Federal police detained and questioned former President Luíz Inácio Lula da Silva (“Lula”) over whether he personally benefited from the Petrobras bribery scheme. São Paulo state prosecutors then separately filed to arrest him on money-laundering charges. In a plea bargain, Senator Delcídio do Amaral claimed current President Dilma Rousseff knew about Petrobras bid-rigging and tried to stop the criminal probe. Abroad, Argentine prosecutors are investigating if their own officials received kickbacks, and my colleague Matt Taylor predicts the U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) could bring FCPA charges against Petrobras. And in what most perceive as a cynical move to defy justice, Lula joined Rousseff’s cabinet as chief of staff, removing him from the jurisdiction of both state and federal courts (only the Supreme Court can now try his case). As millions take to the streets in outrage, the political consequences may come more quickly than the legal ones.

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This Week in Markets and Democracy: Nike’s Bribes in Kenya, Elections in Benin and Niger, and Women’s Anticorruption Role

by Shannon K. O'Neil
A policeman is seen outside the gates of Riadha House the Athletic Kenya (AK) Headquarters during a protest in capital Nairobi November 23, 2015. Dozens of Kenyan athletes stormed the athletics federation headquarters in Nairobi on Monday, locking out officials and demanding that top Athletics Kenya (AK) bosses step down following allegations of graft and doping cover-ups (Reuters/Noor Khamis). A policeman is seen outside the gates of Riadha House the Athletic Kenya (AK) Headquarters during a protest in capital Nairobi November 23, 2015. Dozens of Kenyan athletes stormed the athletics federation headquarters in Nairobi on Monday, locking out officials and demanding that top Athletics Kenya (AK) bosses step down following allegations of graft and doping cover-ups (Reuters/Noor Khamis).

Nike Bribes, Will the United States Prosecute?
Bank records and emails show Nike paid a $500,000 “commitment bonus” to Kenya’s athletics federation, and hundreds of thousands more in “honoraria.” Though allegedly to support poor runners, Kenyan prosecutors say athletics officials quickly transferred the money to their personal bank accounts. Yet the United States cannot use the Foreign Corrupt Practices Act (FCPA) against the mega brand. The law only covers U.S. companies that bribe “foreign officials” and “public international organizations.” Sports associations are private, so outside the FCPA’s jurisdiction. In taking on FIFA, the U.S. Department of Justice (DOJ) worked around the FCPA, indicting foreign and U.S. officials for laundering money through U.S. banks, not bribery. The United States may need to do the same in the Nike case if it wants to follow up on President Obama’s pointed criticisms of Kenyan corruption with legal actions.

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