Mrs. Souad Aden s the Head of Secretariat of the African Union High Level Panel on Stemming Illicit Financial Flows From Africa and also the Working Group on Common Africa Position on Asset Recovery (CAPAR).
The two groups have been playing a pivotal role in addressing Illicit Financial Flows from Africa and Asset Recovery. Both groups recently held a two-day conference in addressing Illicit Financial Flows and Asset Recovery in the Extractive Industries in Dakar, Senegal which brought together stakeholders including state agencies, civil society organizations, academia and the media to foster dialogue and collaboration on the promotion of accountability and transparent management of oil, gas, and mineral resources.
Aden-Osman shares her experiences on efforts to stem IFFs from Africa and recover African assets in foreign jurisdictions. Excerpts of the interview:
Q: Can you provide some insights on the two-day conference in addressing Illicit Financial Flows and Asset Recovery in the Extractive Industries in Africa, particularly highlights of the conference?
A: We have gathered as we always do, using the Coalition for Dialogue on Africa (CoDA) as a platform for dialogue and debate on matters concerning Africa. We met for two days to discuss the IFFs scourge and also present the Common African Position on Asset Recovery (CAPAR) to new stakeholders, including those engaged in Extractive Industries Transparency Initiative (EITI) processes, civil society organisations, academia, and the media. We chose to hold this event in parallel to the 2023 Global EITI Conference which was also held in Dakar because the extractive sector is the sector that contributes the most to illicit financial flows, and we are implementing the CAPAR.
The CAPAR is the policy advocacy instrument aimed at assisting AU Member-States to trace, identify, repatriate and subsequently effectively manage their assets, including items of cultural heritage, in a manner that respects their sovereignty and for the benefit of African people who are ultimately the victims of illicit financial flows. CAPAR now stands as the best tool for Africa’s legal and technical framework in structuring and managing the return of Africa’s stolen assets from the foreign jurisdictions. That is why it is imperative that Africa’s assets, including financial resources lost through illicit flows, be returned to finance the continent’s development agenda as underlined in the AU High Level Panel Report on Illicit Financial Flows, adopted by African Heads of State and Government in January 2015.
In May last year, a judgment was made in the United States, followed by another one in November in the United Kingdom, concerning Glencore, and the Glencore scandal. We were told that EITI is uncomfortable discussing the Glencore scandal, but we do not understand the rationale for this. The EITI, a good governance instrument in the extractive sector, is now confronted with a major scandal and has come to this continent for the first time, even though its majority members are Africans. The scandal occurred slightly over a year ago, and yet it is not on their agenda. At this conference, we have called on them and reminded them of their role in promoting transparency, accountability, and integrity, regardless of whether they must deal with governments or multinational corporations. They seem to be more comfortable calling out governments instead of multinationals, and this is something that needs to be corrected.
Q: This action by your conference is questioning the credibility of the EITI, particularly regarding corruption cases and IFFs in the extractive industry sector. Is this a good thing in the struggle against IFFs?
A: You are right to express concern, and that is why we need to proceed with caution because, in the end, no instrument is perfect, particularly when it comes to governance. It is a process, a struggle, and they have been doing what they can. However, in this particular case, we were hoping they would do what they should. We are here to remind them of that, but more importantly, to structure our engagement with them and improve their processes if necessary. The High-Level Panel on Illicit Financial Flows continues to work in galvanizing its recommendations and mobilizing a broad coalition of institutions and individuals.
The EITI and Transparency International (TI) are both essential instruments that we must engage with and work together to improve. We are currently in Phase 2 of our work, which involves national-level actions. We cannot discard them because they are the babies of our civil society. They were brought forward by civil society and are a response to the call of civil society in the extractive sector. However, we must ask why they are not playing their role anymore? Whether they have drifted to the point we need to question their processes and data. Our goal is to have an EITI that nobody will question its credibility or integrity, and that is not the case at the moment.
Q: What are the obstacles confronting the fight against Illicit Financial Flows?
A: The current standard setting at the global level is problematic. The Organisation for Economic Cooperation and Development (OECD), a club of rich countries, holds all the power and dictates the agenda. However, they are not a legitimate global platform, but they still take on this role and prevent the United Nations from acting on these matters. Africa is not at the table of the OECD, and the same “green room syndrome” that exists in the context of the World Trade Organisation (WTO) is present here. The decision making in the United Nations, which was dominated by the Security Council for the longest period, is also evolving. Due to the Ukraine war, we are witnessing a shift and the most powerful countries are now coming to the General Assembly and consulting with everybody.
Most instruments and standard-setting processes at global level need to evolve. While the World Bank and IMF have been criticized for their structural adjustment policies in the past, they are now making good progress. The current situation where the OECD imposes its leadership, standards, and solutions on the majority of the world needs to change. It represents the views of a minority and does not result in a fair and inclusive way of dealing with important matters at the global level. It is crucial that we work towards a fair and inclusive approach that takes into account the perspectives and needs of all nations.
Q: Do we really have the political will to fight against IFFs in the extractive sector in Africa?
A: When we talk about political will, it is essential to understand that it is a result of many factors. At the African Union level, a lot of work has been done to show political will. The fact that the Panel is sustained and the Secretariat was moved from United Nations Economic Commission for Africa (UNECA) to the African Union in 2018, and that the Panel has been reinforced with recent funding of close to six million dollars from the African Development Bank (AfDB) to act on the recommendations and decisions of the Heads of State display political will. Many institutions and individuals are still active, committed, and engaged, and we need to keep up that momentum. We must not compare ourselves to others. Still, we need to reflect on the progress we have made so far in the fight against illicit financial flows. At the global level, Africa has shown ownership and leadership. When the panel completed its task, the Heads of State endorsed the 15 findings and 38 recommendations of the Panel.
Therefore, political will is evident, and we need to build on it. One of the challenges we face is capacity, both in governments and non-state actors. It has been a problem in many of our fights, and it is no different in this one against illicit financial flows. This challenge is not unique to Africa, but it is a structural global issue. For centuries, the continent has been relegated to the role of raw material providers due to colonial and neo-colonial systems. Given this unjust mandate, multinational corporations that operate in the continent do not feel compelled to act responsibly. Unfortunately, corruption and the proceeds of corrupt activities are often tolerated in their countries of origin.
Q: What should we expect from the conference on addressing illicit financial flows in the extractive industry in Africa in terms of way forward or recommendations?*
A: During the conference, we have heard a lot of promising things, which will be captured in the communique. To make these things happen, we need to galvanize and disseminate the Common African Position on Asset Recovery and turn it into a set of actionable frameworks that we can track and follow up on. These include: implementing frameworks such as a framework for whistleblower protection, a framework establishing an escrow account, and more. We need to reinforce the national chapters, starting with the six victim countries impacted by the Glencore scandal.
Additionally, we want to explore how we can involve countries that are not “victims” and bring them together. Arising from discussions at the conference, we will establish a working group that will follow up on the outcomes of this meeting. We need to engage in proper consultations and scale-up research, linking it to policy as we continue to make progress. Proper consultations and collaboration are essential to ensure that we move forward together.