David Kinley https://www.opendemocracy.net/taxonomy/term/17936/all cached version 09/02/2019 21:01:08 en From Wall Street to Main Street to No Street, money talks. Can we make it listen? Human rights may be the answer https://www.opendemocracy.net/david-kinley/from-wall-street-to-main-street-to-no-street-money-talks-can-we-make-it-listen-human-ri <div class="field field-summary"> <div class="field-items"> <div class="field-item odd"> <p>Ten years ago, our leaders’ failure to recognize let alone address the human rights implications of an economic calamity was truly remarkable.</p> </div> </div> </div> <p><span class='wysiwyg_imageupload image imgupl_floating_none caption-xlarge'><a href="//cdn.opendemocracy.net/files/imagecache/wysiwyg_imageupload_lightbox_preset/wysiwyg_imageupload/500209/PA-6560551.jpg" rel="lightbox[wysiwyg_imageupload_inline]" title=""><img src="//cdn.opendemocracy.net/files/imagecache/article_xlarge/wysiwyg_imageupload/500209/PA-6560551.jpg" alt="lead lead " title="" class="imagecache wysiwyg_imageupload caption-xlarge imagecache imagecache-article_xlarge" style="" width="460" /></a> <span class='image_meta'><span class='image_title'>US President George W. Bush waves goodbye to journalists after Washington Financial Summit leaders (G20) discussed consequences of the global financial crisis, Nov. 15, 2008. A3464 Rainer Jensen/ Press Association. All rights reserved. </span></span></span></p><p>November 2008 was notable not only for the potentially game-changing midterm congressional elections: it also marked the 10th&nbsp;anniversary of a momentous G20 meeting on November 15, in Washington DC.&nbsp;The global significance of each can hardly be underestimated, not least because both shared hallmarks of myopia and miscommunication, and their ruinous consequences.&nbsp;</p> <p>Signalling the severity of a global financial crisis that was fast becoming a global economic one, the 2008 summit comprised for the first time in the group’s history, the leaders of the G20 nations. But with the finance horse well and truly bolted, expectations were low that the world’s most powerful leaders would be able to find the stable door let alone shut it.&nbsp;</p> <p>Still, the resultant&nbsp;<a href="https://www.treasury.gov/resource-center/international/g7-g20/Documents/Washington%20Nov%20Leaders%20Declaration.pdf">communiqué</a>&nbsp;did its best to rise above the normal vacuity of diplomatic speak. It pointed the blame finger at policy-makers, regulators and financial institutions; it lauded free market principles as the vectors for economic prosperity that have “lifted millions out of poverty and significantly raised the global standard of living”;&nbsp;and committed global leaders to a series of immediate and medium-term actions for restoring “stability and prosperity to the world economy.” “Not a bad week-end’s work,” as&nbsp;<a href="https://www.economist.com/finance-and-economics/2008/11/16/not-a-bad-weekends-work"><em>The Economist</em></a><em> </em>smugly put it at the time.</p> <p>However, it was what was<em>&nbsp;not</em>&nbsp;said that really stood out. In the communiqué’s 3,582 words, “human rights” figured not at all. The world’s most powerful leaders gather to sweatshop the most significant global economic event in a generation, with widespread and manifest social implications (job losses, homelessness, poverty and welfare cuts), yet the crowning achievement of post-WWII international law warrants nary a mention.&nbsp;</p> <p>At least as shocking was the fact that no one seemed to notice. Indeed, far beyond the G20,&nbsp;human rights considerations were conspicuously absent from nearly all diagnoses and prescriptions that followed the crisis.&nbsp;</p> <p>Maybe we’ve become too complacent, or our capacities to learn from history have failed us (again), or probably both. But with the&nbsp;<em>Universal Declaration on Human Rights</em>&nbsp;just a month shy of its 60th birthday that day in DC, our leaders’ failure to recognize, still less address the human rights implications of an economic calamity was truly remarkable. All the more so because of the ready invocation of human rights to justify so many other international crises, whether military interventions, trade embargoes, political lambasts, or the rendering of humanitarian aid.&nbsp;</p> <p>So, what is it about financial crises and their economic progeny that inures politicians, policy wonks and the rest of us from seeing the relevancy of rights? Well, commonplace perceptions of finance’s complexity and detachment from ordinary life (or the lives of the ordinary) certainly has something to do with it. What John Lanchester in&nbsp;<em>How to Speak Money</em>&nbsp;characterizes as “elaborate language and ritual, designed to bamboozle, mystify and intimidate” shrouds the financial world from the view of many of us.</p> <p>The human rights industry also tends toward esotericism. More importantly it is guilty of shirking the twin tasks of decrypting finance and engaging with financiers on their own terms. The reason why the language of human rights is missing from financial debates, in other words, has much to do with rights advocates not making the case for its relevance clearly and convincingly. Denouncing the venality and vice of finance is all well and good, but that alone won’t open many bankers’ doors.&nbsp;</p> <p>On that score, it’s no good pointing to the rafts of international human rights treaties and declaring, hands on hips, that they provide a blueprint for how financial policy should be designed and implemented. They don’t.&nbsp;True, the rights contained in such treaties are backed by legal obligations (on states), but they are expressed as aspirational goals and hedged with permissible qualifications, both economic (available resources) and political (where necessary to maintain public order or national security). Policy prescriptions they are not, no matter how fervently one might wish it otherwise.&nbsp;</p> <p>There is no avoiding the fact that a heap of heavy lifting is needed to translate rights rhetoric into practicable tools for a trade like finance. And while we must categorically demand that financiers do more to recognize, and take responsibility for, the social consequences of their actions (they work in a ‘service’ sector after all), the task of making clear the human rights implications falls to the human rights community itself.&nbsp;&nbsp;</p> <h2><strong>Human rights are what make human lives worth living</strong></h2> <p>In the same way as the machinations of Wall Street impact the economic fortunes of Main Street and No Street, so they effect good and bad human rights outcomes at the same addresses. Our abiding task, therefore, as Juan Pablo Bohoslavsky, the indefatigable UN Independent Expert on foreign debt and human rights,&nbsp;<a href="http://sur.conectas.org/en/juan-pablo-bohoslavsky-human-rights-impact-assessments-must-be-part-of-economic-reforms/">argues</a>, is to “reconcile financial obligations with economic and social rights.” But what does that mean in lay terms?</p> <p>‘Human rights’ are in fact the features of your everyday existence and mine that make our lives worth living -&nbsp;safety and security, health and welfare, being treated with respect and as an equal, and exercising our basic freedoms to speak, associate, practice and learn as we choose. </p> <p>These are the staple ingredients of the good life. Which of them we enjoy and in what quantities are determined very often by our financial capacities as individuals and communities to secure them. And in this, it is finance’s very own commonplace&nbsp;features of offering security, flexibility, convenience and choice that can help build wealth and make the difference between sustaining people’s human rights and their neglect.</p> <p>Put in this way, one is impelled to ask: what else is finance for if not to help us secure these essential ingredients?&nbsp;Sure, there remain the eternally thorny questions of apportionment – who gets to lead a good life, how good, and at whose expense? Finance alone cannot be expected to answer these questions, but at least this vernacular approach ensures that the two worlds of human rights and finance are reading from the same cookbook.&nbsp;</p> <p>John Maynard Keynes recognized the importance of their proximity when, in the aftermath of the&nbsp;great financial crisis of his generation,&nbsp;he declared that&nbsp;<em>the</em>&nbsp;political problem of mankind is to reconcile economic efficiency with social justice and individual liberty. Nearly 90 years on, and ten&nbsp;years after the defining financial crisis (so far) of our own generation,&nbsp;the gauntlet Keynes threw down still lies before us.<em>&nbsp;&nbsp;</em>&nbsp;</p> <h2><strong>Accountable capitalism </strong></h2> <p>We’ve made up little of the ground missed by our G20 leaders, despite<a href="http://www.cesr.org/sites/default/files/G20_and_Financial_Regulation_0.pdf">&nbsp;repeated entreaties</a>&nbsp;for them to recognize the economic as well as the political relevance of rights during their now twice yearly G20 meetings. Even debates over elemental questions of “what corporations are for and whose interests should they serve”, as&nbsp;<a href="https://www.nakedcapitalism.com/2018/08/elizabeth-warrens-accountable-capitalism-act-will-good-shareholders.html">posed</a>&nbsp;by Senator Elizabeth Warren’s recent&nbsp;<a href="https://www.warren.senate.gov/newsroom/press-releases/warren-introduces-accountable-capitalism-act"><em>Accountable Capitalism Act</em></a>, are bereft of concerted human rights input. Indeed, the inventory of ships passing in the night is long.</p> <p>The Group of Thirty (comprising many former central bankers and other leading financial figures) has been scathing of the sector’s prevailing culture of narcissism and has lengthily&nbsp;<a href="http://group30.org/publications/detail/166">urged banks</a>&nbsp;to respect their “broader responsibility to society”: but all without a single reference to the human rights upon which societies are built.</p> <p>The EU’s long gestated&nbsp;<a href="https://ec.europa.eu/info/publications/180308-action-plan-sustainable-growth_en"><em>Financing Sustainable Growth Action Plan</em></a>, published in March this year, defines the “social considerations” it champions as essential to sustainable investment entirely in economic terms (human capital is important for sure, but “inequality” and “labor relations” are human rights too).&nbsp;</p> <p>Despite shedding the sharpest elbowed of its neo-liberal prescriptions, the IMF is still criticized for window-dressing its social conscience. Its support for social protection programs,&nbsp;<a href="https://www.thenation.com/article/the-imfs-large-brain-unhealthy-ego-and-tiny-conscience/">argues</a>&nbsp;Philip Alston, the UN Special Rapporteur on extreme poverty and human rights, is borne of ideas of charity, rather than obligation as international law demands.&nbsp;</p> <p>Even apparently well-intentioned efforts to cross the Rubicon collapse for want of real commitment to the cause. The Thun Group of leading European banks’&nbsp;<a href="https://www.business-humanrights.org/en/thun-group-of-banks-releases-new-discussion-paper-on-implications-of-un-guiding-principles-for-corporate-investment-banks">efforts to engage</a>&nbsp;with human rights responsibilities by quarantining them as far from its members as possible have been ham-fisted and naïve. And visionary finance commentator and Nobel Laureate Robert Shiller is no less intellectually klutzy when pronouncing in his&nbsp;<em>Finance and the Good Society&nbsp;</em>that&nbsp;“the rights of man are set down in financially inconsistent ways.”&nbsp;</p> <p>What? The line of reasoning travels in exactly the opposite direction. It is finance that must surely bend to the reality of the needs of human rights.</p> <p>Evidently, there is much work yet to be done on both sides of the gap before it can be successfully bridged. The cardinal principle that the betterment of the human condition, including by protecting and promoting human rights, is or ought to be a core object of finance has yet to be fully understood, let alone widely accepted.&nbsp;</p> <p>Finance watchdog BankTrack, notes the growing number of top&nbsp;<a href="https://www.banktrack.org/campaign/banks_and_human_rights#docs_type=1&amp;popover=documents">bankers</a>&nbsp;swearing fealty to ‘international human rights standards’, yet walking the talk is proving much more difficult. Just last month, for example, in a dispute involving forced evictions, child labour and workplace deaths at a sugar plantation in Cambodia financed by ANZ bank, an&nbsp;<a href="https://cdn.tspace.gov.au/uploads/sites/112/2018/10/11_AusNCP_Final_Statement.pdf">OECD inquiry</a>&nbsp;found that when measured against the bank’s own stated human rights standards “it is arguable that most (if not all) of them would not be satisfactorily met.”</p> <h2><strong>Finance is a foundational public utility</strong></h2> <p>I believe that by adopting a more prosaic approach to explaining the relevance of human rights to finance (and vice versa) we might help build a bridge that actually meets in the middle. To call out the benign as well as malign effects of finance in the vernacular of daily existence. Our feeding of hopes and quelling of fears wrapped up in the mundane of how we work, play, socialize, and pay the bills. That’s the context in which we must discuss the relationship between finance and human rights debate, and thereby understand its true significance.&nbsp;</p> <p>It is way beyond time – a decade, at least – that we stopped pussy-footing around the fundamental question of what finance is really for. Finance is a foundational public utility, not a sheltered workshop for the wealthy, or a gambling mecca for alpha thrill-seekers. The base human rights goals of security, welfare and respect that finance can help realize are the very same properties that can help rescue finance from the ignominious and trustless hole it’s dug for itself in recent times. By serving human rights, finance therefore can revitalize its own legitimacy.</p> <p>The relationship is as essential as it is inexorable. Like Elizabeth Bennet and Mr Darcy, the pair’s destinies are tied, whether or not they know it or like it. But for the marriage to succeed both parties must loosen their pride and prejudices, talk to rather than at each other, and realize the good they can do together. </p> <p>And where once the proposition of such a union might have seemed fanciful, it is a sign of our times that compared to the yawning chasm that rends the political landscape of democracies today, its brokerage looks possible. Indeed, its pursuit might even help return politics to matters of meaningful policy rather than craven populism.&nbsp;</p><fieldset class="fieldgroup group-sideboxs"><legend>Sideboxes</legend><div class="field field-related-stories"> <div class="field-label">Related stories:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="/uk/mickey-keller/in-fight-against-austerity-human-rights-is-not-answer">In the fight against austerity, human rights is not the answer</a> </div> <div class="field-item even"> <a href="/n-jayaram/universal-declaration-of-human-rights-at-70">The Universal Declaration of Human Rights at 70</a> </div> <div class="field-item odd"> <a href="/openglobalrights/stanley-ibe/yes-economic-and-social-rights-really-are-human-rights">Yes, economic and social rights really are human rights</a> </div> </div> </div> </fieldset> <div class="field field-rights"> <div class="field-label">Rights:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> CC by 4.0 </div> </div> </div> David Kinley Sun, 16 Dec 2018 09:52:02 +0000 David Kinley 120997 at https://www.opendemocracy.net Finance struggles to find a social conscience https://www.opendemocracy.net/david-kinley/finance-struggles-to-find-social-conscience <div class="field field-summary"> <div class="field-items"> <div class="field-item odd"> <p>The finance sector has the capacity to enrich and reward the lives of many. The wealth it has helped generate has played a vital part in the decline in global poverty over the past 30 years.<strong></strong></p> </div> </div> </div> <p><span class='wysiwyg_imageupload image imgupl_floating_none 0'><a href="//cdn.opendemocracy.net/files/imagecache/wysiwyg_imageupload_lightbox_preset/wysiwyg_imageupload/500209/1024px-Finkcalatrava.jpg" rel="lightbox[wysiwyg_imageupload_inline]" title=""><img src="//cdn.opendemocracy.net/files/imagecache/article_xlarge/wysiwyg_imageupload/500209/1024px-Finkcalatrava.jpg" alt="lead " title="" width="460" height="305" class="imagecache wysiwyg_imageupload 0 imagecache imagecache-article_xlarge" style="" /></a> <span class='image_meta'><span class='image_title'>CEO Larry Fink ( third from right),at Wilson Awards, Wilson Centre, 2010. Wikicommons/ Some rights reserved. </span></span></span>The most remarkable thing about financier BlackRock CEO Larry Fink’s latest letter exhorting corporate captains to develop a “social conscience” was not the media’s excited response – the&nbsp;<em>NY Times</em>&nbsp;called it “Wall Street’s watershed moment,” and&nbsp;<em>Le Monde</em>, an “ ‘inflexion majeure’ ” in the evolution of capitalism. No, what was remarkable was that it was news at all.</p> <p>Granted BlackRock – the world largest asset holder – owns a staggering 8% worth of the S&amp;P 500 companies, so what Mr Fink says is always worth listening to. But is not his message precisely what all financiers and asset managers ought to be demanding all of the time from the businesses they invest in? More to the point, is it not precisely what the invested-in corporations ought to be delivering? Corporations must secure a reputational “social license” to operate, alongside their legal license of incorporation if they are to be commercially successful and sustainable. All investors should be demanding as much, and the rest of us should be expecting no less.&nbsp;</p> <p>Yet in terms of respect for the rule of law, let alone social responsibility, the finance sector has a lamentable record. It is not just that the sector’s political clout has managed criminal law to grey out areas that were previously manifestly illegal (such as conflicts of interest). The numbers of bank prosecutions pursued by the DOJ following the 2007/08 global financial crisis, for example, are pitiful (roughly 70 per annum) compared to those following the Savings and Loans crisis in the 1980s/90s (1,837 in 1995 alone). Nor is it that overwhelmingly those cases that are pursued are settled rather than convictions recorded (by way of so-called deferred (or non-) prosecution agreements), even when admissions of wrong-doing are extracted from errant banks.&nbsp;</p> <p>What is most reprehensible is the evident disregard banks pay to the consequences of their actions. The size of settlements in many of these cases are eye-watering. BNP paid $8.9bn (for violating trade sanctions); Credit Suisse,&nbsp;$2.6bn (facilitating tax evasion); and HSBC, $1.9bn (money-laundering). And yet they do not seem to have the desired deterrent effect. Recidivism is rife. JP Morgan Chase coughed up a total of $40.1bn from 26 cases between 2008 and 2015, and Bank of America a total of $77.1bn from 34 cases in the same period. These settlement sums have become mere costs of doing business, to be passed on, ultimately, to clients and customers. Some settlements are even tax-deductable!&nbsp;<span class="mag-quote-center">These settlement sums have become mere costs of doing business, to be passed on, ultimately, to clients and customers. Some settlements are even tax-deductable!&nbsp; </span></p><p>So in lecturing Corporate America, titans of finance need to be sure that they are also putting their own house in order. Banks and other financial institutions still struggle to come to terms even with the relevancy of the language of human rights to their operations. </p><p>A 2017 discussion paper from one group of leading European banks (The Thun Group), distances financiers from any responsibility for human rights abuses of their clients unless the bank’s funding is “directly linked” to the rights-abusing action (a high bar indeed given the fungibility of finance). This, at the same time as corporations in other major sectors like retail and extractive industries are increasingly acknowledging the long reach of their supply chain responsibilities.&nbsp;</p> <p>Meanwhile, the still new Banking Standards Board in the UK continues its Sisyphean task of reorienting the sector’s moral compass and the ongoing Banking Royal Commission in Australia offers up a cavalcade of financiers’ misdeeds on an almost daily basis, albeit to a public seemingly resigned to the gutter ethics on show.</p> <p>Yet, the finance sector has the capacity to enrich and reward the lives of many. The wealth it has helped generate has played a vital part in the decline in global poverty over the past 30 years (albeit that still some 760 million people live in abject poverty); poor countries’ economies have expanded, some spectacularly (albeit with manifest inequities in it distribution); and in the widening access to financial services through micro-financing and mobile money via the ubiquity of cell phones in developing countries today, no matter the extortionate fees and rates charged by the lenders.&nbsp;</p> <p>Further, the many instances of skulduggery within finance seem to be more products of prevailing banking culture rather than something innate to the sector. Finance’s Darwinian incentive structures relating to pay, promotion and respect create cheats rather than attract them, as multiple studies have shown. So if the incentives are changed, behaviour will follow.&nbsp;</p> <p>It is here that the sentiment behind Mr Fink’s letter gains traction. It is volunteered from within the sector; not imposed from without. It challenges the status quo of finance’s exceptionalist claims to be unhindered in its pursuit of profit (the ‘golden goose’ syndrome), and it confronts finance’s entrenched political power (the revolving door between finance and government).&nbsp;</p> <p>The acid test, of course, is whether BlackRock specifically, and the sector generally, walk the talk. They can (as illustrated by the uptake in social impact investing by mainstream financial firms such as Goldman Sachs and JP Morgan, as well as BlackRock), and they should. For the message for finance is one that points the way back to the future, not to iconoclasm.</p><fieldset class="fieldgroup group-sideboxs"><legend>Sideboxes</legend><div class="field field-related-stories"> <div class="field-label">Related stories:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="/beyondslavery/genevieve-lebaron-neil-howard-cameron-thibos-penelope-kyritsis/confronting-root-causes">Confronting root causes: forced labour in global supply chains</a> </div> <div class="field-item even"> <a href="/beyondslavery/genevieve-lebaron-neil-howard-cameron-thibos-penelope-kyritsis/confronting-root-caus-1">Confronting the root causes of forced labour: globalisation and the rise of supply chains</a> </div> <div class="field-item odd"> <a href="/beyondslavery/genevieve-lebaron-neil-howard-cameron-thibos-penelope-kyritsis/confronting-root-caus-8">Confronting the root causes of forced labour: governance gaps</a> </div> <div class="field-item even"> <a href="/transformation/niki-seth-smith/do-we-have-right-to-financial-rebellion-conversation-with-enric-duran">Do we have the right to financial rebellion? A conversation with Enric Duran</a> </div> </div> </div> </fieldset> <div class="field field-rights"> <div class="field-label">Rights:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> CC by NC 4.0 </div> </div> </div> David Kinley Sun, 15 Apr 2018 09:30:20 +0000 David Kinley 117280 at https://www.opendemocracy.net David Kinley https://www.opendemocracy.net/content/david-kinley <div class="field field-au-term"> <div class="field-label">Author:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> David Kinley </div> </div> </div> <p>David Kinley is Professor of Human Rights Law at Sydney Law School, University of Sydney and a member of Doughty Street Chambers in London. He is author of <a href="https://www.amazon.co.uk/Necessary-Evil-Finance-Saving-Rights/dp/0190691123"><em>Necessary Evil: How to Fix Finance by Saving Human Rights</em></a> (Oxford University Press, New York, 2018).</p> David Kinley Fri, 17 Oct 2014 03:41:13 +0000 David Kinley 86885 at https://www.opendemocracy.net The entitlement delusion https://www.opendemocracy.net/david-kinley/entitlement-delusion <div class="field field-summary"> <div class="field-items"> <div class="field-item odd"> <p>Within the corpus of international human rights law there presently exists no explicit recognition of a right to freedom from corruption. How can we make corruption more than a mere crime?</p> </div> </div> </div> <p><span class='wysiwyg_imageupload image imgupl_floating_none caption-xlarge'><a href="//cdn.opendemocracy.net/files/imagecache/wysiwyg_imageupload_lightbox_preset/wysiwyg_imageupload/549501/3612816047_229e7fb7d1_o.jpg" rel="lightbox[wysiwyg_imageupload_inline]" title="Madoff painting"><img src="//cdn.opendemocracy.net/files/imagecache/article_xlarge/wysiwyg_imageupload/549501/3612816047_229e7fb7d1_o.jpg" alt="Madoff painting" title="Madoff painting" width="400" height="268" class="imagecache wysiwyg_imageupload caption-xlarge imagecache imagecache-article_xlarge" style="" /></a> <span class='image_meta'><span class='image_title'>Portrait of Bernard Madoff. Flickr/Thierry Ehrmann. All rights reserved.</span></span></span><span>We all lie and cheat. We tell white lies to our children and loved ones and we fib to our friends.&nbsp; We manufacture tall tales about past or present exploits and we are economical with the truth at work. Above all, however, we fool ourselves. This usually manifests itself in ways that are essentially private and trivial: how funny, or fit, or intelligent, or generous, or hardworking we believe we are, or are not.</span></p> <p>But some of us also practice self-delusion of a very different order. That is in respect of actions that are profoundly public and serious; where the consequences are not only criminal, but also involve breaches of public trust.</p> <p>A clear expression of such behaviour occurs when individuals fool themselves into believing that their corrupt conduct is justifiable, or even not really corrupt at all. Through a kind of willful blindness, they reconstruct their ‘crimes’ are victimless.</p> <p>It is this attitude of entitlement that permits the tenor of self-righteousness heard in Bernie Madoff’s interviews from his prison cell, when declaring that he was always able to rationalize defrauding thousands of investors to the tune of 50 billion dollars, and adding chillingly,&nbsp;“it’s not like I ever considered myself a bad person.”</p> <p>Criminal sanction, it seems, is not enough to convince such miscreants that their conduct is more than merely illegal. Their actions are morally reprehensible in their contempt not just of the community at large, but of each of us as individuals, affronting our fundamental human rights to be treated fairly, equitably and with dignity. Yet within the corpus of international human rights law there presently exists no explicit recognition of a right to freedom from corruption.</p> <p>This despite the staggering figures for corruption globally. The anti-corruption pressure group Global Financial Integrity estimates that between 2000 and 2009 the poorest countries in the world lost some 8.44 trillion US dollars to illicit financial flows. This is ten times what they received in aid from richer countries during the same period as calculated by the OECD. So while we may well lament the persistently low levels of international aid, the real problem for developing economies is how to staunch financial hemorrhaging caused by corruption.&nbsp;</p> <p>Rich states are also a big part of the problem. Traversing the fine line between sophisticated tax avoidance (which is lawful) and bald tax evasion (which is not) is often viewed more as fair game than socially repugnant. What was revealing about Credit Suisse’s recent guilty plea to Department of Justice charges of helping US citizens to evade taxes was not so much the size of the settlement (albeit an eye-watering 2.6 billion dollars), but the twin facts of the systemic nature of the schemes and their decades in existence – all concealed behind the invisibility cloak of Swiss privacy laws. </p> <p>Multinational corporations do not even have to stoop this low, as they can benefit from ‘legal corruption’ (as Danny Kaufmann of the Brookings Institute calls it) whereby tax is legally avoided, but unethically evaded. Transfer pricing (shifting corporate profits to low-tax jurisdictions and costs to high ones) has developed into such a legalised art form, notes accountancy Professor Prem Sikka of Essex University, that the tax departments of our largest and most globally integrated companies are now profit - not cost - centres.</p> <p>The tension between public interests and private power is a fact of political life. Whether openly paraded or hidden in plain sight, the results are equally unpalatable when the private prostitutes the public. But given its pervasiveness and abhorrent consequences, it is indeed curious that the body of law most associated with moral censure has not added its voice to the chorus against corruption.&nbsp; The time has come to proclaim a human right to freedom from corruption to underpin criminalisation of the deed, if only to stack the virtuous odds against those who would otherwise see ways to rationalise their venality. This much we owe ourselves.&nbsp;</p><p><em>The author has made a submission to the UN Human Rights Council Advisory Committee’s current <a href="http://www.ohchr.org/EN/HRBodies/HRC/AdvisoryCommittee/Pages/NegativeImpactCorruption.aspx">Study on Corruption and Human Rights</a>,&nbsp;advocating the establishment of a new right to freedom from corruption.</em></p><fieldset class="fieldgroup group-sideboxs"><legend>Sideboxes</legend><div class="field field-related-stories"> <div class="field-label">Related stories:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="/blog/stephen-zunes/2008/11/12/fighting-corruption-through-nonviolent-action">Fighting corruption through nonviolent action</a> </div> </div> </div> </fieldset> <div class="field field-topics"> <div class="field-label">Topics:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> Civil society </div> <div class="field-item even"> Democracy and government </div> </div> </div> Democracy and government Civil society David Kinley Fri, 17 Oct 2014 03:40:12 +0000 David Kinley 86884 at https://www.opendemocracy.net