Natural Resources and Violent Conflict - WaterWiki.net

follow the money 181in June 2002 by George Soros and Global Witness, provides the firstsignificant effort to focus attention on monitoring not only the purchaseand sale of a commodity but also the funds used to pay for it.Notably, Publish What You Pay does not focus on the mechanisms bywhich illicit commodity sales move, but rather on the amounts, timing,and recipients of particular revenues paid by licit private sectorcompanies purchasing energy. The information that could be developedfrom such a regime, in turn, would be available to assist regulatorsand law enforcement officials in determining whether a particulartransaction not reported under Publish What You Pay may have beenillicit in nature. Separately, the International Association of Oil andGas Producers has established industry guidelines on issues such asenvironmental management and in November 2001 held an initialmeeting in Houston to discuss corruption. Among the ideas discussedwere proposals to share best practice in due diligence and training,both within the association and, ideally, with other industry associations(Bray 2002). Potentially, the initiative could propose standardizingthe provision of information to the public that would facilitate thetracing of corrupt payments in the energy sector.Anticorruption and Transparency Standards and NormsDuring the late 1990s, anticorruption initiatives were being undertakenat a rapid rate, covering active and passive bribery. 22 Theseincluded regional conventions against corruption within the Organizationof American States and the Council of Europe, each of whichfocused on criminalizing the taking of bribes, and a major global conventionundertaken at the OECD, which focused on the making ofbribes. The initiatives arose in an environment in which capital flowsto emerging and developing countries had shifted markedly in favorof the private sector, rather than on a government-to-governmentbasis. As a result, multinational corporations and financial marketsgenerally became a more significant factor in transfers of capital thanofficial assistance. Economic collapses in East Asia, Mexico, andRussia often revealed extreme corruption in financial and business sectors,even as they created substantial private sector losses. The LatinAmerican malaise and the Asian economic flu, in turn, prompted theInternational Monetary Fund and the World Bank to focus on strengtheningstandards and norms not only in fiscal but also in regulatoryareas. The regulatory standards emphasized documenting financialtransactions involving governments—and account records at financialinstitutions generally—in order to facilitate prevention and punishmentof corruption.