Transforming Partnerships Across Asia and the Pacific To Combat Corruption and Ensure Ethical Conduct: Open Government, Clean Trade, and Integrity in Markets and Supply Chains
I am honored to have been invited to New Delhi to attend the 16th Steering Committee Meeting of the ADB/OECD Anticorruption Initiative for Asia and the Pacific and to present this morning the work program in the Asia Pacific Economic Cooperation (APEC) forum on combating corruption, especially in my capacity as the 2011 Chair of the APEC Anticorruption and Transparency (ACT) Experts’ Working Group.
I would like to thank the Asian Development Bank (ADB), the Organization for Economic Cooperation and Development (OECD), and the Government of India for their invitation and warm hospitality, and I hope that together we can chart a vibrant partnership between APEC and your initiative – and among our respective membership – to promote greater integrity and to prevent, investigate, and prosecute corruption and bribery across Asia and the Pacific.
Before outlining the work of the United States as host of APEC in 2011 and our ACT anti-corruption initiatives and capacity-building programs – including priorities that we are advancing this year as we march towards the APEC Leaders Week and Summit in Honolulu, Hawaii, November 8-13, 2011 – I want to say what a privilege it is for me personally to return as a participant in your Steering Committee meetings. I recall fondly being part of the Advisory Group at the first meeting in Japan in 2001 and the meeting in Malaysia in 2003.
Over the years, I have met many good friends and am excited to meet new friends here this week and to explore continued synergies and collaborations that strengthen regional cooperation via collective action to combat corruption. It is also good to see some of my APEC ACT colleagues here at these meetings, including past and future ACT chairs: Korea (2005), Vietnam (2006), Australia (2007), Singapore (2009), Japan (2010), and Indonesia (2013). I would also like to give a special thanks to the Government of Thailand and my very good friend Professor Pakdee Pothisiri, Commissioner of the National Anti-Corruption Commission (NACC). It was because of Thailand’s leadership in 2003 that the APEC Leaders agreed to make the fight against corruption a priority, a commitment that led to the creation of the ACT and the Santiago Commitment in 2004.
APEC 2011: Economic Growth, Expansion of Trade and Investment, and Clean Markets
APEC is the premier Asia-Pacific economic forum through which 21 economies have united to build a dynamic and harmonious Asia-Pacific community by championing free and open trade and investment, promoting and accelerating regional economic integration, encouraging economic and technical cooperation, enhancing human security, and facilitating a favorable and sustainable business environment.
The 21 APEC economies are as follows: Australia; Brunei Darussalam; Canada; Chile; People’s Republic of China; Hong Kong, China; Indonesia; Japan; Republic of Korea; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; The Republic of the Philippines; The Russian Federation; Singapore; Chinese Taipei; Thailand; United States of America; and Viet Nam. Twelve of our APEC members are also active in your initiative.
APEC’s 21 member economies today account for 55 percent of global GDP, 43 percent of world trade, and comprise a market of 2.7 billion consumers.
For the United States, APEC accounts for 58 percent of U.S. goods/exports, and seven of our top trade partners are in APEC. Last year alone, U.S. exports to APEC economies grew much faster than exports to the rest of the world. Due to the dynamism of APEC markets, a 5 percent increase in exports to APEC economies would add hundreds of thousands of jobs to the U.S. economy.
So as we embark on our collaboration with the ADB/OECD anticorruption initiative and other international partners to achieve shared prosperity and economic regional partnerships, we must ensure that we similarly develop a shared framework based on not only reasonable, rules-based approaches but also on open, free, transparent, and fair principles. We believe that such a regional architecture would benefit developed and developing economies alike by transforming and expanding markets, encouraging innovation, and ensuring cleaner forms of public and private governance for markets across the Asia Pacific region.
As the host of APEC in 2011, the United States is focusing on three priority themes for this year, reflecting many of the challenges and opportunities facing public and private sectors across the Asia Pacific region:
Strengthening regional economic integration and expanding trade;
Promoting inclusive, sustainable, green growth; and
Advancing regulatory convergence and cooperation.
With these priorities in mind, I would like to raise three questions for consideration: First, why are transparency and effective anti-corruption measures critical to our future? Second, why are they indispensable tools for long-term, sustainable growth and regional prosperity? And finally how can we partner to advance our mutually-shared agenda? I hope that today’s discussion will help us leverage our energies and harness our talents and capacities to achieve cleaner trade and more open governments.
Ensuring Greater Integrity in APEC Economies, Markets, and Supply Chains
Let me start with a well-known truism: Governments are most effective in promoting economic competitiveness, growth, and investment when their communities and its people have confidence in the stability and soundness of its institutions. Governments can faithfully and judiciously invest the public’s trust by adopting effective anticorruption policies that put accountability front and center, demonstrating to their people that they are working for their communities with the highest levels of integrity.
At the United Nations General Assembly meetings last week, the United States and other members of the Open Government Partnership acknowledged “that people all around the world are demanding more openness in government . . . and are calling for greater civic participation in public affairs, and seeking ways to make their governments more transparent, responsive, accountable, and effective.” Participating governments also agreed to accept responsibility for seizing this moment in time “to strengthen [their] commitments to promote transparency, fight corruption, empower citizens, and harness the power of new technologies to make government more effective and accountable.”
Through the Open Government Dialogue, India and the United States are working together to create “Data.gov-in-a-Box,” a joint, open source, e-governance application. It will be available for implementation by countries globally, encouraging governments around the world to develop open-data sites that promote transparency, improve citizen engagement, and engage application developers in continuously improving these efforts.
As ACT Chair, I can report to you that President Barack Obama and Secretary of State Hillary Rodham Clinton are working together with our APEC partners, and globally, to make anticorruption a priority. In remarks made at the OECD Session on Development and Gender this past May, Secretary Clinton observed that corruption, lack of transparency, and poorly functioning governance systems “not only deprive government of revenues; they inflict a quieter and in some ways an even more dangerous cost as well, because they corrode citizens’ trust in each other and in their government. And when those bonds of trust crumble, it becomes much more difficult for communities and countries to make progress.”
In APEC, we are addressing corruption by sharing our good governance practices and experiences with each other, including by exchanging information on our respective laws, what we do to publicize our enforcement efforts, and what our respective business communities are doing to ensure that they have effective compliance programs to prevent and detect corruption and bribery. Moreover, we are also investing in a broad array of capacity-building programs that help sharpen the capabilities of the APEC anti-corruption agencies and law enforcement communities to prevent, investigate, and prosecute corruption.
Reducing Illicit Arbitrage Opportunities for Cleaner Markets and Supply Chains
In November 2010, in Yokohama, Japan, APEC Leaders and Ministers agreed to leverage collective action to combat corruption and illicit trade by promoting clean government, strengthening relevant judicial, regulatory, and law enforcement systems, and enhancing regular reporting of our efforts to implement anticorruption commitments to build communities of integrity.
â€ªWe can appreciate why Leaders remain focused on good governance and transparency.
Corruption and bribery are not only barriers to economic growth, trade and investment, and market integrity, but also weaken the entrepreneurial spirit that nurtures innovation, openness, and competiveness.
Corrupt practices also corrode the pillars of free and accountable societies, especially at a time when our citizens are demanding more of our governments and expect to be governed with the highest levels of integrity.
By leading by example, APEC is demonstrating that ethical behavior among public officials can anchor the trust and confidence of the public and markets alike.
As Secretary Clinton emphasized at the 2011 APEC SOM I meetings in Washington, DC, as our communities demand greater accountability, transparency and participatory governance, we must deliver.
And we are. I have just returned from San Francisco where the APEC ACT discussed a robust plan of action for combating corruption in APEC economies as part of our 5-year strategy and discussed ways to advance our 2011 work program under the following three guiding principles: 1) combat corruption and illicit enrichment for more clean and open governments; 2) combat bribery through public-private partnerships that anchor market integrity; and 3) combat corruption and illicit trade to ensure greater supply chain integrity.
On the first guiding principle, through collective action, we are contributing to influence positively APEC’s open and transparent framework, including through the Santiago Commitment and Course of Action to Fight Corruption and Ensure Transparency, the APEC Code of Conduct for Business, the Conduct Principles for Public Officials, and the Complementary Anti-Corruption Principles for the Public and Private Sectors, as well as the development this year of principles to strengthen financial/asset disclosure systems that encourage officials to perform their duties in accordance with public interest, as opposed to self-interest. These principles, we hope, will also help investigators and prosecutors identify and corroborate illicit enrichment, providing greater accountability and building public trust.
Consistent with the APEC Santiago Commitment, in APEC, we are committing ourselves to implementing the UN Convention against Corruption (UNCAC) and undertaking a full review on a wide range of measures, including criminalization, preventive measures, and the recovery of stolen assets.
The ACT also continues to work on denying safe haven to kleptocrats around the world, to bar their illicitly-acquired assets, and to give notice that continued theft from our economies will not be tolerated. Following the money must be an integral part of our strategies to deny criminals and their networks access to entities and mechanisms used to hide and launder illicit criminal proceeds. Working with Peru and China in APEC, for example, we launched a very aggressive initiative to strengthen capacities to combat kleptocracy. In 2006, in Shanghai, the United States and China led APEC efforts to take strong enforcement actions to deny safe haven to corrupt individuals and prevent them from enjoying the proceeds of their illicit activities. The ACT commends Thailand and the National Anti-Corruption Commission (NACC), and others, for leading ACT capacity-building efforts in recent years to combat money laundering and help track the criminal proceeds of kleptocrats and illicit networks alike. Similarly, we applaud Indonesia for being co-Chair of the G20 Anticorruption Working Group, and for serving next year as a Vice Chair in the ACT (and host of APEC in 2013).
Depriving illicit networks of their profits and funding is one of the most effective ways to deter them. This requires a holistic, comprehensive anti-money laundering regime with the ability to trace, freeze, and seize assets related to illicit financial flows, while addressing both formal and informal financial networks.
Second, in the ACT, we are also taking a comprehensive and holistic approach to combat corruption and illicit trade to ensure integrity in global markets and supply chains and to sustain our shared prosperity. We must confront criminal entrepreneurs and illicit market actors that navigate between licit and illicit worlds, tainting supply chains and compromising the integrity of our markets and institutions. Moreover, tainted supply chains, compromised markets, and the corruption that accompanies illicit trade also hurt our legitimate businesses; diminish brand identities, reputations, and returns on research and innovation; and increase operating costs and investment risks to all market investors.
Working together in APEC, we are ramping up efforts to investigate and prosecute the illicit actors who produce and sell harmful counterfeits such as counterfeit medicines, and we are simultaneously strengthening the integrity of our supply chains, as well as our global financial system.
At the APEC September 2011 SOM 3 meetings in San Francisco, investigators, prosecutors, and regulators, from the U.S. Department of Homeland Security (DHS), the U.S. Department of Justice (DOJ) including Homeland Security Investigations (HSI) , the Federal Bureau of Investigations (FBI), the U.S. Food and Drug Administration (FDA), and others, coordinated with their APEC counterparts by organizing an APEC workshop on Investigating and Prosecuting Corruption and Illicit Trade: Stemming the Flows of Counterfeits and Dismantling Illicit Networks to impart best practices, law enforcement techniques, share case studies, and explore possible tools that can equip APEC economies to mitigate vulnerabilities, dismantle transnational illicit networks, and strengthen integrity in supply chains.
In the next month, we will submit to APEC Senior Officials the ACT’s recommendations to launch across APEC a public-private partnership to dismantle illicit networks at every link in tainted supply chains and prosecute criminal entrepreneurs who arbitrage weak and corrupt law enforcement systems and exploit internal border controls for illicit gain and enrichment.
Breaking the corruptive power of transnational illicit networks globally is a key objective for the United States. On July 25, 2011, the White House released the Strategy to Combat Transnational Organized Crime. We will work with international partners to attack the financial underpinnings of transnational criminal organizations; strip them of their illicit wealth; and sever their access to the financial system. In targeting illicit entrepreneurs and illicit networks that pose grave threats to our citizens’ safety—including those that sell and distribute substandard, tainted, and harmful counterfeits—we will also expose criminal activities hidden behind legitimate fronts and protect strategic markets, as well as the integrity of the global financial system. The United States will also work with other committed partners to disrupt crime-terror networks all around the world including in South Asia.
Combating Bribery and Forging Public-Private Partnerships on Market Integrity
Finally, when both public and private sectors work together, we can create a culture of integrity that has a lasting impact. The private sector can lead in ensuring that corruption does not corrode the foundations of an efficient and transparent market system, which is fundamental to economic security, sustainability, and prosperity for all economies. We can create a better future by uniting in our support of accountability and good governance and against corruption. Such action has been evidenced in recent years in India, where the Global Corporate Governance Forum has worked in partnership with the regulator, the National Institute for Securities Markets, and one of the country’s leading business associations, the Confederation of Indian Industry (CII), to raise understanding and awareness of the importance and modalities of good corporate governance. The regulator brings to this exercise the imprimatur of the government, while CII lends the weight of prominent Indian industrial concerns, creating a formidable alliance.
As the OECD and World Bank Group – key APEC partners – have underscored as part of their global corporate governance forum, “encouraging high quality corporate governance practices as a linked element of anti-corruption measures, are the twin pillars of developing fair and efficient markets. Both are relevant to broader efforts to promote sustainable economic development and democracy. They depend upon implementation by the private sector, with the active support of civil society and stakeholders, within a framework of law and regulation provided for by government. Achieving effective measures therefore requires the active partnership of all sides” in a full practical engagement for reform, modernization, and good governance.
Through our continued cooperation with the private sector, we are leveling the playing field across APEC economies. Moreover, in working with the APEC Business Advisory Council (ABAC), and other partners, we are ushering in a new era of cooperation between the public and private sector that will help forge a more connected, innovative, and dynamic Asia Pacific region. Combating corruption, achieving sustainable development and dismantling illicit markets and networks also requires collective action and a shared responsibility among APEC partners, as well as close coordination with relevant regional and international organizations that have important expertise and capacities to help improve the overall governance climate in the Asia-Pacific region.
The ACT has a strong record of achievement of strengthening cooperation with other international and regional organizations. We have leveraged new and exciting collaborative platforms with the United Nations Office on Drugs and Crime (UNODC), the World Bank, the Asian Development Bank (ADB), OECD, ASEAN, G20, INTERPOL, and the International Anticorruption Academy (IACA), as well as with civil society groups such as Transparency International.
I have already mentioned the good work that many of our APEC ACT colleagues are doing in combating corruption including, for example, Australia, Chile, China, Korea, Indonesia, Thailand and Vietnam. Next year, Russia will host APEC and we look forward to continue to advance our public-private partnerships to combat corruption and bribery especially tied closely to the expansion of our investment and trade agenda. In addition we would like to congratulate Russia for joining the OECD Working Group on Bribery; we look forward to its ratification of the anti-bribery convention itself. The rigorous peer review that is at the heart of the Working Group’s success will help Russia to intensify its efforts against foreign bribery. The fact that India, China and Indonesia all are participating in the OECD Working Group on Bribery as observers is another positive step and we hope that they will consider full membership in future.
The Way Forward: Greater Integrity in Economies, Markets, and Supply Chains â€ªAcross Asia and the Pacific
In closing, it is great to be meeting with you here in India, and I applaud the diversity of your ADB/OECD Steering Group membership.
Our institutions share many common goals. Similar to APEC’s approach, you are leveraging alliances with communities and civil society groups to mobilize public support to address corruption. I have also taken note of your recent efforts to promote more active judiciaries, parliamentarians, and your ideas on access to information tools and the promotion of social anticorruption and media campaigns that can help to support resiliency and stability and to build a culture of integrity. As we nurture the network of government and business leaders that support innovation in the vibrant sectors of tomorrow – such as computer and high technology, biomedical, energy and space – these issues become even more important to government officials and entrepreneurs to create the right governance conditions for new markets and investment frontiers to thrive across our regions.
India’s adoption of anticorruption commitments as part of the G20 and its ratification of UNCAC send an important signal to the public and to businesses that tackling corruption is a high priority. An even more important step is to implement those commitments, to put them into practice, whether they are about prevention or transparency or law enforcement. Our experience is that creating momentum for reform, for implementation of these kinds of commitments, requires government leadership as well as support and expertise and oversight from civil society and the private sector. A partnership between government and the public is essential. Partnerships among countries can also help by sharing experiences among peers. That is one hallmark of APEC ACT, and one important value added of the ADB/OECD initiative. The United States is pleased to partner with other economies through these frameworks and bilaterally.
Thank you for the opportunity to outline the APEC ACT’s work program. I hope we can develop pragmatic and collaborative joint workshops, from time to time, that will enhance our commitment to combat corruption and illicit trade and strengthen integrity across our respective economies.
Good morning. Good morning. (Applause.)
Good morning everyone. Thank you. Thank you so much. Oh, it is absolutely a pleasure to see all of you here today and I’ve been getting reports about the conference, and I am so excited to join you today to talk about what we are focused on here at this Summit on Women and the Economy.
Before I begin, I want to apologize for the delay but there were so many people who showed up, and because this is the largest gathering of distinguished foreign diplomats in San Francisco, since the founding of the United Nations – (applause) – there was a little more of a delay in getting everyone in, and there are still people outside we hope will be able to get in. Before I begin my remarks, let me recognize a few of our special guests here. We have two members of Congress, Zoe Lofgren and Jackie Speier. Thank you very much for being with us. (Applause.)
And we have two distinguished mayors. I want to welcome Mayor Edwin Lee and his wife Anita from right here in San Francisco. Mayor Lee? (Applause.) And Mayor Jean Quan from Oakland. Thank you for being here. (Applause.) And on a personal note I want to acknowledge a wonderful and former chief of protocol, Charlotte Shultz. Thank you, Charlotte. (Applause.)
Now as this summit comes to a close, we will adopt a declaration for the first time in APEC’s history that will affirm this organization’s and each member economy’s commitment to improving women’s access to capital and markets, to building women’s capacities and skills, and to supporting the rise of women leaders in both the public and private sectors. And it is fitting that this declaration would be adopted here in San Francisco because it was just one mile from here, in the Herbst Theater, where the United Nations Charter was signed 66 years ago. In fact, the APEC Summit, which brings you all here is a celebration of that important occasion and a recognition that history is made right here in San Francisco. Because San Francisco is an appropriate venue for this economic discussion. Because this is a community that is renowned for its spirit of inclusion and opportunity for all. So on behalf of the United States and our people I give each of you, and you nations, my heartiest welcome and my heartfelt thanks for being here and undertaking this great mission with us.
Now there will be a temptation on the part of those observing or covering this summit, perhaps on the part of those of us attending it as well, to say that our purpose is chiefly to advance the rights of women, to achieve justice and equality on women’s behalf. And that is, of course, a noble cause to be sure and one that is very close to my heart. But at the risk of being somewhat provocative at the outset, I believe our goal is even bolder, one that extends beyond women to all humankind. The big challenge we face in these early years of 21st century is how to grow our economies and ensure shared prosperity for all nations and all people. We want to give every one of our citizens, men and women alike, young and old alike, greater opportunity to find work, to save and spend money, to pursue happiness ultimately to live up to their own God-given potentials.
That is a clear and simple vision to state. But to make it real, to achieve the economic expansion we all seek, we need to unlock a vital source of growth that can power our economies in the decades to come. And that vital source of growth is women. With economic models straining in every corner of the world, none of us can afford to perpetuate the barriers facing women in the workforce. Because by increasing women’s participation in the economy and enhancing their efficiency and productivity, we can bring about a dramatic impact on the competitiveness and growth of our economies. Because when everyone has a chance to participate in the economic life of a nation, we can all be richer. More of us can contribute to the global GDP. And the gap between the developed and the developing countries would narrow significantly as productivity rises in economies from Haiti to Papua New Guinea.
But that great, global dream cannot be realized by tinkering around the edges of reform. Nor, candidly, can it be secured though any singular commitment on the part of us here. It requires, rather, a fundamental transformation, a paradigm shift in how governments make and enforce laws and policies, how businesses invest and operate, how people make choices in the marketplace.
The transformational nature of this undertaking that lies ahead is, in my view, not unlike other momentous shifts in the economic history of our world. In the 19th century, many nations began moving from an agricultural to an industrial economy. Then the inventions and mass productions of that era gave rise in the 20th century to the information age and the knowledge economy, with an unprecedented rise in innovation and prosperity.
As information transcends borders and creates opportunities for farmers to bank on mobile phones and children in distant villages to learn remotely, I believe that here, at the beginning of the 21st century, we are entering the participation age, where every individual, regardless of gender or other characteristics, is poised to be a contributing and valued member of the global marketplace.
In some APEC economies, this transformation has been underway for quite awhile now. In others, it has begun more recently. But in all, progress has been too slow and too uneven. But there is no doubt that the increasing numbers of women in the economy and the rising productivity gains from improving the distribution of their talents and skills has helped fuel significant growth everywhere. And economies that are making the shift more effectively and rapidly are dramatically outperforming those that have not.
So if we are serious about this undertaking, if we really want to achieve parity for women in the workforce, both that they participate and how they participate, then we must remove structural and social impediments that stack the deck against them. Now, I don’t urge this because it is the right thing to do, though I believe that it is, but for the sake of our children and our nations, it is necessary to do. Because a rising tide of women in an economy raises the fortunes of families and nations.
Now, my husband often says, in making the argument that everyone should be involved, that we don’t have a person to waste. I think that’s true. When it comes to the enormous challenge of our time, to systematically and relentlessly pursue more economic opportunity in all of our lands, we don’t have a person to waste, and we certainly don’t have a gender to waste either.
So let’s look at the evidence. The case for unlocking the potential of women and including them more fully in the economic life of our nations begins with the accounting of how women already are driving growth. The 21 economies of APEC are among the most dynamic in the world. Together, we represent more than half of total economic global output, and more than 60 percent of women in the APEC economies are part of our formal workforces. They’re opening stores, they’re running businesses, they’re harvesting crops, they’re assembling electronics, and designing software.
The Economist points out that the increase in employment of women in developed countries during the past decade has added more to global growth than China has, and that’s a lot. And in the United States, a McKinsey study found that women went from holding 37 percent of all jobs to nearly 48 percent over the past 40 years, and that in sheer value terms, these women have punched well above their weight.
The productivity gains attributable to this modest increase in women’s overall share of the labor market accounts for approximately one-quarter of the current U.S. GDP. That works out to more than three and a half trillion dollars, more than the GDP of Germany and more than half the GDPs of both China and Japan.
So the promise is clear. What then is the problem? If women are already making such contributions to economic growth, why do we need a major realignment in our thinking, our markets, and our policies? Why do we need to issue a declaration from this summit? Well, because evidence of progress is not evidence of success, and to be sure, the rate of progress for women in the economies of our region varies widely. Laws, customs, and the values that fuel them provide roadblocks to full inclusion.
In the United States and in every economy in APEC, millions of women are still sidelined, unable to find a meaningful place for themselves in the formal workforce. And some of those who get to enter the workforce are really confined by very clear signals to a lower rung on the job ladder, and there’s a web of legal and social restrictions that limit their potential. Or they are confronted with a glass ceiling that keeps them from the most senior positions.
Only 11 of the CEOs of the Fortune Global 500 companies are women. That’s less than 3 percent. Some women in the APEC region don’t have the same inheritance rights as men. So they can’t inherit property or businesses owned by their fathers. Some don’t have the power to confer citizenship on their children, so their families have less access to housing and education, and they must constantly renew residency permits making it harder for them to work. Some are even subject to different taxes than men. Too often they are denied access to credit and may even be prohibited from opening bank accounts, signing contracts, purchasing property, incorporating a business, or filing lawsuits without a male guardian. Some women earn almost as much as men before they have children but less afterwards and even less if they are single mothers.
These barriers and restrictions, some formal, some informal, erode women’s abilities to participate fully in their economies and to support their families whether as employees or entrepreneurs. Now, these barriers are certainly not unique to this region, the Asia Pacific region. Variations of them can be found everywhere in the world. But because this is the most dynamic economic region in the world, what we do will have an impact on everywhere else.
Some barriers are left over from a different time and haven’t changed to reflect new economic realities or concepts of justice. Some seek to preserve an economic order that ensures that men have the higher paying jobs to support their families. And some reflect lingering cultural norms, the belief that women need to be protected from work that is thought to be dangerous or unhealthy for them.
In truth, what is dangerous is denying ourselves the level of economic growth we need to build stronger societies. And what is unhealthy is for women to be denied the chance to contribute fully to that growth, because that denies everyone, first and foremost their families, a chance at greater prosperity.
Now, economic orders do not perpetuate themselves. They are made and remade through countless decisions, small and large, by economic policymakers, political leaders, and business executives. So if we want to see opportunities for women improve, we must begin with sound economic policies that explicitly address the unique challenges that limit women. And here’s why: A Goldman Sachs report shows how a reduction in barriers to female labor force participation would increase America’s GDP by 9 percent. We admit we still have such barriers. It would increase the Eurozone’s by 13 percent – and they need it – and Japan’s by 16 percent. Unlocking the potential of women by narrowing the gender gap could lead to a 14 percent rise in per capita incomes by the year 2020 in several APEC economies, including China, Russia, Indonesia, the Philippines, Vietnam, and Korea.
Of course, rising income means increased spending, which in itself helps to fuel more growth. And here, too, women make a strong contribution. A Boston Consulting Group survey concludes that, globally, women will control $15 trillion in spending by the year 2014. And by 2028, BCG says women will be responsible for about two-thirds of consumer spending worldwide.
Digging a little deeper into the data, we can see positive benefits that flow from both the quality of spending and the quantity of saving by women because multiple studies have shown that women spend more of their earned income on food, healthcare, home improvement, and schooling for themselves and their children. In short, they reinvest, and that kind of spending has a multiplier effect leading to more job growth and diversified local economies. And that, in turn, can help ensure better educated, healthier citizens as well as provide a cushion in the event of market downturns.
The research also shows that women are stronger savers than men. Data – does that surprise any of the women in the audience? (Laughter.) Data from 20 semi-industrialized countries suggest that for every one percentage point increase in the share of household income generated by women, aggregate domestic savings increased by roughly 15 basis points. And a higher savings rate translates into a higher tax base as well.
Integrating women more effectively into the way businesses invest, market, and recruit also yields benefits in terms of profitability and corporate governance. In a McKinsey survey, a third of executives reported increased profits as a result of investments in empowering women in emerging markets. Research also demonstrates a strong correlation between higher degrees of gender diversity in the leadership ranks of business and organizational performance. The World Bank finds that by eliminating discrimination against female workers and managers, managers could significantly increase productivity per worker by 25 to 40 percent. Reducing barriers preventing women from working in certain sectors would lower the productivity gap between male and female workers by a third to one half across a range of countries.
Now, these gains are achieved because removing barriers means that the talent and skills of women can be deployed more efficiently. And in our globalized world today, this is a competitive edge that is more important than ever. All of this underscores my primary point: When we liberate the economic potential of women, we elevate the economic performance of communities, nations, and the world.
Take just one sector of our economy – agriculture – to illustrate what I mean. We know women play an important role in driving agriculture-led growth worldwide. Agriculture is a powerful engine for development, as we have seen in the remarkable rise of China and India. And in several APEC economies, women comprise nearly half of the agriculture labor force. They sustain every link in the agricultural chain: They plant the seeds; they care for the livestock; they harvest the crops; they sell them at markets; they store the food, and then they prepare it for consumption.
But as for the role of women in agriculture nowadays, despite their presence in all of these kinds of jobs, they have less to show for all of their work. Women farmers are up to 30 percent less productive than male farmers, and that’s not because they are working less or are less committed. It’s because women farmers have access to fewer resources. They have less fertilizer, fewer tools, poorer quality seeds, and less access to training or to land. And they have much less time to farm because they also have to do most of the household work. When that resource gap is closed and resources are allocated equally – and better yet, efficiently – women and men are equally productive in agriculture. And that has positive benefits. In Nepal, for example, where mothers have greater ownership of land because of their inheritance rights, there are fewer severely underweight children.
So what we have here is an opportunity to accelerate growth in developing economies while, at the same time, producing more and cheaper food for our planet. Close the resource gap holding women back in developing economies, and we could feed 150 million more people worldwide every year, and that’s according to the Food and Agriculture Organization, and that’s in addition to the higher incomes for families and the more efficient markets and the more agricultural trade that would result.
The same kind of impact can be seen in other sectors in our economies, because we know that the entrepreneurial spirit of women is strong. More than half a million enterprises in Indonesia and nearly 400,000 in Korea are headed by women. They run fully 20 percent of all of China’s small businesses. All across Asia, women have and continue to dominate light manufacturing sectors that have proved crucial to the region’s economic takeoff. And economists predict that women-owned businesses, which now provide for 16 percent of all U.S. jobs, will create nearly a third of the new jobs anticipated over the next seven years.
So with that kind of evidence at hand, it is little wonder that the World Economic Forum’s Gender Gap Report finds a direct correlation between the gender gap and economic productivity – the lower the former, the higher the latter. As Klaus Schwab, the executive chairman of the World Economic Forum concludes, “Women and girls must be treated equally if a country is to grow and prosper.” The declaration we will adopt here today can begin to close that gender gap, by making it possible for more women to unleash their potential as workers, entrepreneurs, and business leaders.
And the goals in this declaration are very specific. We commit to giving women access to capital so women entrepreneurs can turn their ideas into the small and medium enterprises that are the source of so much growth and job creation. We urge examining and reforming our legal and regulatory systems so women can avail themselves of the full range of financial services. And such reforms can also help ensure that women are not forced to compromise on the well-being of their children to pursue a business career.
We must improve women’s access to markets so those who start businesses can keep them open. For example, we need to correct the problem of what’s called information asymmetric problems, meaning that woman are not informed about the trade and technical assistance programs that are available, as we just discussed in agriculture.
There are two State Department programs that we are using to try to model a lot of these approaches. A program called Pathways to Prosperity connects policymakers and private sector leaders in 15 countries across the Americas. It’s aimed at helping small business owners, small farmers, craftspeople do more business, both locally and through regional trade. And the African Women’s Entrepreneurship Program reaches out to women that are part of the African Growth and Opportunity Act countries to provide them with information and tools to take advantage of what AGOA has to offer.
And then finally, we must support the rise of women leaders in the public and private sectors because they bring firsthand knowledge and understanding of these challenges, and their perspectives will add great value as we shape policies and programs that will eliminate barriers to bring women into all economic sectors.
Several businesses already are taking significant steps to meet such goals. Goldman Sachs is training the next generation of women business leaders in developing economies with its Ten Thousand Women campaign. Coca Cola’s “Five by Twenty” campaign aims to support five million women entrepreneurs worldwide by 2020. And just this week, Wal-Mart announced that it will use its purchasing power to support women entrepreneurs by doubling the amount of goods it will buy from women-owned businesses globally to $20 billion by 2016. (Applause.) In addition, Wal-Mart will invest $100 million to help women develop their job skills, including women who work on the farms and factories overseas that are Wal-Mart suppliers.
Now, these programs are just the start of the type of permanent shift we need to see in how businesses worldwide invest in women.
Now, I do not underestimate the difficulty of ushering in what I call the participation age. Legal changes require political will. Cultural and behavioral changes require social will. All of this requires leadership by governments, civil society, and by the private sector. And even when countries pursue aggressive structural reforms to get more women into their economy and enhance their productivity, they don’t always produce the results that we would like to see. So we have to stay with this. Persistence is part of our long-term plan.
And while economic orders may be hard to change, and policy strategies—no matter how good—can only get us so far, we all have to make a choice, not simply to remove the barriers but to really fill this field with active investment and involvement from all of us. Those of you who are here today are leaders from across the APEC region, and it is your choice to come here, it is your choice to focus on women and the economy that will send a message rippling across APEC. And the countless decisions that will be taken by leaders and citizens to encourage young girls to stay in school, to acquire skills, to talk to that banker, to understand what it means to give a loan to a woman who will work her heart out to produce a result for herself and her children. And when we do that, we are going to really make a big difference in helping elevate the age of participation for women.
And there are many other areas we have to be attentive to. Our medical research dollars need to be sure that we are equally investing in women as men. Our tax systems have to ensure that we don’t either deliberately or inadvertently discriminate against women. And women should be given the same opportunities to be productive and contributing members of society.
But big and bold ideas, I think are called for in our world today, because a lot of what we’re doing is not achieving the outcomes that we are seeking. There is a stimulative and ripple effect that kicks in when women have greater access to jobs and the economic fortunes of their families, their communities, and their countries. Many people say that there are all kinds of benefits that will flow from this, but I want to be somewhat modest in our goals. Yes, I do think it will produce more food and more educational opportunity and more financial stability for more families around the world, and that will have dividends across the full spectrum of society.
But our declaration will be meaningless if we don’t put our will and effort behind it. I think this summit just might make the history books if people look back in years to come and say, that meeting in San Francisco with all of those important people from across the Asia Pacific said something that had never been said before. They didn’t just assert that involving women was the good thing to do or the right thing to do. They put their heads together and came up with a declaration committing themselves to really tackle the obstacles, because it will benefit the people we all represent.
And then we need to measure our progress to be sure that we are tracking what we care about. We obviously do that in our own lives, but it’s important we do it across our countries and our regions. And I am sure that if we leave this summit and go back to our governments and our businesses and focus on how we’re going to improve employment, bring down national debts, create greater trade between us, tackling all of that, and always in the back of our mind keep in focus what more can we do to make sure women contribute to those results, we will see progress and we will be in the lead at not only asserting what we think should be done, but in measuring and tracking how well we are doing.
So I thank you for gathering here in San Francisco, mindful that we’re on a long journey together. I look out and I see friends from across the region representing countries that have been so amazing in the progress that you have made in the last 50 years, even in the last 30 years. It will take time. It will take our concerted effort. But I am convinced that if we come into pursuing the promise of this participation age and unleashing and harnessing the economic potential of women, we will see a new and better future.
That is why I am honored to be here representing the people of the United States, bearing witness to what begins right here in San Francisco, on September 16th, 2011. This is the beginning of a very promising future for us all. Thank you very much. (Applause.)
It is an honor as the 2011 APEC Anti-Corruption and Transparency (ACT) Working Group Chair to co-host this workshop with Rodrigo Roque, the APEC Intellectual Property Experts Group (IPEG) Chair.
Over the years, the ACT, IPEG, and other APEC sub-fora have been pathfinders in developing innovative cross-fora approaches to addressing numerous illicit trade issues that are important to APEC economies. Earlier this year at the APEC SOM I meetings, for example, we partnered to advance a dialogue on combating counterfeit medicines and other cross-border illicit threats that impact our economies, especially in areas where they threaten human health and safety.
Corruption and illicit trade are not only barriers to the integrated commercial, transportation, and transactional systems that facilitate free trade and the movement of people throughout legitimate markets, but they also weaken the entrepreneurial spirit that nurtures innovation, openness, and competitiveness and contributes to prosperous economies. Indeed, combating corruption and promoting good governance nurtures the overall business climate and promotes cleaner and more dynamic sectors.
Illicit market actors easily navigate between licit and illicit worlds, investing in legitimate industry and integrating themselves into communities, where they erode supply chain integrity and destabilize institutions through bribery, coercion, and corruption. In some cases, they even establish themselves as seemingly altruistic providers of security and basic services.
Criminal entrepreneurs and illicit networks also engage in bribery, fraud, and violence to corrupt or intimidate vital government institutions in order to gain the upper hand against competitive business. This cycle distort our markets, damaging the ability of legitimate firms to compete, and drives some legitimate small- and medium-sized enterprises out of the market in the APEC region.
In the case of counterfeit or falsified medicines, medical products, and other dangerous counterfeits and defective and tainted products, illicit trade imperils the safety of our people and shakes confidence across our markets. Fake medicines often contain inactive or toxic ingredients than can increase drug resistance, prolong patients’ suffering, and even cause death. The “entrepreneurs” behind these counterfeits and other illicit activities are rapacious opportunists who profit from the low level of risk for this type of criminal activity where regulatory and enforcement structures are weak or ill equipped to address this challenge.
In our fight against the spread of counterfeit medicines, APEC economies must work together and with the private sector and other stakeholder interests not only to investigate and prosecute the illicit actors who produce and distribute counterfeits, but to ensure that all communities have access to safe and effective medicines.
Excising corruption and illicit trade from the global market for goods and services requires all market actors—from businesses to governments to consumers—to act in harmony to restore supply chain control to legitimate businesses that have both the greatest knowledge of their supply chains and the greatest stake in their integrity. We applaud our growing partnership with the private sector and other stakeholders across APEC sub-fora to develop a full-spectrum approach to combating illicit trade that targets not only actors, but also the economic, political, and legal conditions that enable them to operate.
Today’s Workshop on Investigating and Prosecuting Corruption and Illicit Trade: Stemming the Flows of Counterfeits and Dismantling Illicit Networks continues to build upon the partnership we began at SOM 1 and is a model for what we hope will be many more vibrant partnerships across APEC sub-fora to combat corruption and illicit trade and plug vulnerabilities in supply chains and markets.
We can no longer allow illicit criminal networks to hijack our prosperity and twist the globalized value chain. We cannot allow our businesses to experience a loss of profits, a loss of brand identity and reputation, diminished product quality, stifled innovation, and other harmful economic consequences. APEC economies risk an increasingly unstable investment climate, weaker governance structures, and less transparent communities.
The United States is committed to working with our APEC partners in government, the private sector, and other stakeholders to develop communities of vigilance that will promote greater integrity at every step of the supply chain and to ensure that only quality products enter our markets. We must ensure integrity throughout the complex web of producers, manufacturers, re-packagers and distributors, from raw materials to finished products.
As U.S. FDA Commissioner Margaret Hamburg underscored in March 2011 at our APEC SOM I dialogue on this issue in calling for us do everything that we can to prevent the entry of counterfeit, substandard or adulterated medical products into homes and health care facilities in our countries: “[a] supply chain is only as strong as its weakest link, and the proliferation of additional handlers, suppliers and middlemen creates new points of entry through which contaminated, and otherwise falsified medicinal products can infiltrate the legitimate medical products supply.” We must dismantle illicit trade networks at every link in tainted supply chains and prosecute criminal entrepreneurs who arbitrage weak and corrupt law enforcement systems and exploit internal border controls for illicit gain.
On July 25th, 2011, the White House released the Strategy to Combat Transnational Organized Crime. Breaking the corruptive power of transnational illicit networks globally is a key objective for the United States and we will work with international partners to attack the financial underpinnings of transnational criminal organizations; strip them of their illicit wealth; and sever their access to the financial system. In targeting illicit entrepreneurs and illicit networks that pose grave threats to our citizens’ safety—including those that sell and distribute substandard, tainted, and harmful counterfeits—we will also expose criminal activities hidden behind legitimate fronts and protect strategic markets, as well as the integrity of the global financial system.
Combined with a follow-up training, collaboration, and best practices initiative for APEC member economies’ law enforcement, this workshop is the first in a set of deliverables that is intended to promote the development of a harmonized approach to illicit trade and corruption in the APEC region.
Law enforcement tools such as the Illicit Trade Unit (ITU) that will be discussed by the United States will assist with detecting corruption, customs fraud, and counterfeits and can also positively contribute to our efforts to mitigate vulnerabilities, dismantle transnational illicit networks, and strengthen overall market resilience to thwart future threats at every phase of interconnected supply chains.
The presenters at this workshop will build on the themes that emerged in March 2011 at the APEC Dialogue on Corruption and Illicit Trade: Combating Counterfeit Medicines and Strengthening Supply Chain Integrity. I hope that our discussion today will help shape the deliverables that we would like to present to our Senior Officials and Leaders as we work our way to the APEC Summit in November.
Please allow me now to introduce Rodrigo Roque, the APEC Intellectual Property Experts Group (IPEG) Chair to deliver some brief remarks. Thank you.
Good morning, everyone.
Thank you for joining us here in San Francisco for the Third APEC Senior Officials Meeting (SOM 3) of the year and the 13th APEC Anti-Corruption & Transparency Experts Working Group (ACT) meeting. The United States is honored to be the Chair of the ACT this year, and I extend a warm welcome to all the delegates and international-organization-representatives here this week.
The ACT has been instrumental in carrying-out the mandate from our leaders to strengthen efforts to combat corruption and illicit trade and improve governance, and the U.S. is committed to building on the ACT’s achievements to date to further our collective interests in ensuring free, open, transparent and prosperous economies. As recognized by our leaders, corruption is a serious threat to greater prosperity and development in the Asia-Pacific region and demands our ongoing commitment, cooperation, and creativity.
I would like to begin this meeting by quickly reviewing what we accomplished in SOM 1 in March 2011 in Washington, D.C., then share some thoughts on where we are going and what we hope to accomplish in the coming months in advance of the APEC Leaders Summit that will be held in Hawaii, November 8-13, 2011.
Accomplishments from SOM 1
First, as evident in the ACT’s new name, the Steering Committee on Economic and Technical Cooperation approved our proposal to upgrade the ACT from a task force to a working group during SOM 1. As a result, the ACT is now institutionalized as a permanent body within APEC.
I would like to thank all ACT members and their senior officials for their support in realizing this important APEC milestone. This achievement enables us to make and implement longer-term action plans that more effectively confront the pervasive, long-term nature of corruption and ensure cleaner, more open governments and enhanced integrity in markets and supply chains.
The ACT also continued to enhance our partnerships with other APEC sub-fora during SOM 1 by hosting a dialogue on counterfeit medicines, addressing corruption and supply chain integrity in a sector that dramatically affects the health and welfare of citizens in the Asia-Pacific region. Our ongoing partnerships with ABAC, IPEG, and other APEC sub-fora will help us to ensure better cross-disciplinary and inter-regional cooperation among experts, as well as to ensure that ACT activities are more fully aligned and integrated with APEC’s core mission, including the strengthening of regional economic integration and lasting benefits for are all of our people.
The ACT also appreciates our growing partnership and synergies with our international organizations, including the Association of Southeast Asian Nations (ASEAN), United Nations Office on Drugs and Crime (UNODC), the World Bank, the Asian Development Bank (ADB), the Organization for Economic Cooperation and Development (OECD), the International Anticorruption Academy (IACA), the Organization of American States (OAS), INTERPOL, Transparency International (TI), and others.
In addition, the ACT adopted an ambitious 2011 work plan, as well as a five-year strategy that includes the Yokohama Leaders’ commitment for each economy to report on its implementation of APEC anti-corruption commitments. We will be adopting the reporting template this week and begin our comprehensive reporting on the various APEC anticorruption commitments and actions in 2012 and 2013.
We can all be proud of what the ACT has accomplished to date, and I commend each of my colleagues within the ACT for your hard work and commitment to make anticorruption efforts a priority within APEC and to promote transparency and accountability within your respective economies.
Combating Corruption and Illicit Enrichment: Clean and Open Governments
Now, as everyone in this room is well aware, corruption and bribery impede economic growth, trade and investment; compromise markets and supply chain integrity; weaken the entrepreneurial spirit; and also erode citizens’ trust in one another and in their government. In the absence of transparency, corruption indeed flourishes.
Collective action—on the part of governments, the private sector, and civil society—is necessary to secure greater accountability, competitiveness, and supply chain integrity. As reflected in our 2011 ACT workplan, we must employ the full range of tools in the toolbox—ranging from tools to prevent corruption and enhance market integrity to tools to more effectively investigate and prosecute corruption and combat money laundering and illicit trade.
On the front-end, preventive measures and integrity systems are crucial in the fight against corruption. Financial/asset disclosure is an anti-corruption and transparency tool that encourages officials to perform their duties in accordance with public interest as opposed to self-interest and helps public officials, potential candidates, and political appointees recognize and protect against conflicts of interest. Disclosure systems also help investigators and prosecutors identify and corroborate illicit enrichment, providing greater accountability and building public trust.
The ACT workshop on Effective Financial/Asset Disclosure for Public Servants later this week will go into further depth on the use of disclosure systems as a preventive tool as well as a tool in conducting investigations and prosecutions. Furthermore, we plan to build upon the APEC Conduct Principles for Public Officials that were adopted in Australia in 2007 to develop draft principles regarding financial/asset disclosure and strengthen our efforts in APEC on combating corruption and illicit enrichment.
Combating Bribery: Public-Private Partnerships on Market Integrity
In addition to addressing corruption in the public sector, we have recognized that partnering with the private sector to confront corruption and bribery in international business, as well as in the way governments grant licenses and permits, is essential.
Governments alone cannot root-out corrupt practices that undermine free and fair competition and taint global markets and supply chains. Communities of vigilance composed of governments, industry, and civil society organizations are needed to promote greater integrity in business transactions and supply chains. In light of this, we will continue to partner with ABAC—the APEC Business Advisory Committee—and will be co-sponsoring a dialogue with ABAC tomorrow on Ensuring Greater Integrity in APEC Economies, Markets, and Supply Chains.
We will also delve further into shaping an ACT-ABAC public-private partnership to combat corruption in the Asia-Pacific region. I encourage everyone to participate in this dialogue and the other workshops over the next couple days.
Combating Corruption and Illicit Trade: Supply Chain Integrity
Finally, in taking a comprehensive and holistic approach to combating corruption and illicit trade, we must confront criminal entrepreneurs and illicit market actors that navigate between licit and illicit worlds, tainting supply chains and compromising the integrity of our markets and institutions. As we discussed in our dialogue on Combating Counterfeit (Falsified) Medicines and Strengthening Supply Chain Integrity during SOM 1, illicit trade in counterfeit or falsified medicines, medical products, and other dangerous, defective products is an especially grave threat as such products threaten the health and safety of our people.
Tainted supply chains, compromised markets, and the corruption that accompanies illicit trade also hurt our legitimate businesses, diminishing brand identities, reputations, and returns on research and innovation, while increasing operating costs and investment risks.
Working together in APEC, we must thus continue to investigate and prosecute the illicit actors who produce and sell harmful counterfeits, and simultaneously strengthen the integrity of our supply chains, as well as our global financial system. The APEC workshop on Investigating and Prosecuting Corruption and Illicit Trade: Stemming the Flows of Counterfeits and Dismantling Illicit Networks later this week will allow us to delve further into this issue and explore law enforcement tools that can equip us to mitigate vulnerabilities, dismantle transnational illicit networks, and strengthen our markets.
The ACT looks forward to leveraging our expertise across APEC to help ensure that we dismantle illicit networks at every link in tainted supply chains and prosecute criminal entrepreneurs who arbitrage weak and corrupt law enforcement systems and exploit internal border controls for illicit gain and enrichment.
2011 Deliverables: Open and Cleaner Governments and Enhanced Integrity in Markets and Supply Chains
As we proceed with our work this week and look towards the ministerial meetings in Hawaii this November, the ACT is on track to provide our leaders with robust deliverables, possibly including principles related to financial/asset disclosure; the launching of an ACT-ABAC public-private partnership to combat corruption and illicit trade (ensuring integrity in institutions, markets, and supply chains); and a timeline for economies to report on how they are implementing their anticorruption commitments.
I look forward to your interventions and an exchange of ideas and best practices throughout our time together and to ensure that our ACT deliverables in 2011 contribute to inclusive growth and greater integrity and prosperity for all economies, and nurture a better future for all of our people.
I would like to thank the APEC Business Advisory Council (ABAC) for co-sponsoring, with the Anticorruption and Transparency (ACT) Working Group, this important dialogue on enhancing our APEC partnership to combat corruption and bribery and to ensure cleaner forms of public and private governance for more transparent markets across the Asia-Pacific region.
Since the creation of the ACT in 2004, the Asia-Pacific corporate community has been among our most ardent champions in APEC in fighting corruption and has led by example, with businesses committing to operate their business affairs with the highest level of integrity and to implement effective anticorruption measures in their businesses, wherever they operate. We applaud this commitment and our public-private partnership with ABAC.
As ACT Chair, I would also like to take this opportunity to applaud my colleagues within the ACT for their commitment over the years to work together to realize the mandate of our Leaders of making anticorruption a priority. We have done this by taking real and pragmatic actions that I believe are making a difference in our economies and bringing together a vibrant ACT network towards collective action to prevent, investigate, and prosecute corruption.
The opportunity to share our good governance practices and experiences from each of our economies – including by exchanging information on our laws, what we do to publicize our enforcement efforts, and what our respective business communities are doing to ensure that they have effective compliance programs to prevent and detect corruption and bribery – has also contributed positively to the success of APEC’s efforts to combat corruption.
Arbitraging the Market Integrity Gap and Reducing Opportunities for Corruption
In November 2010, in Yokohama, Japan, APEC Leaders and Ministers agreed to leverage collective action to combat corruption and illicit trade by promoting clean government, strengthening relevant judicial, regulatory, and law enforcement systems, and enhancing regular reporting of our efforts to implement anticorruption commitments to build communities of integrity.
We can appreciate why Leaders remain focused on good governance and transparency.
Corruption and bribery are not only barriers to economic growth, trade and investment, and market integrity, but also weaken the entrepreneurial spirit that nurtures innovation, openness, and competiveness.
Corrupt practices also corrode the pillars of free and accountable societies, especially at a time when our citizens are demanding more of our governments and expect to be governed with the highest levels of integrity without corruption.
By leading by example, APEC can demonstrate that ethical behavior among public officials can anchor the trust and confidence of the public and markets alike.
As Secretary of State Hillary Clinton has recently noted in hosting the first forum of the Open Government Partnership (OGP) initiative, corruption, lack of transparency, and poorly functioning governance systems “not only deprive government of revenues; they inflict a quieter and in some ways an even more dangerous cost as well, because they corrode citizens’ trust in each other and in their government. And when those bonds of trust crumble, it becomes much more difficult for communities and countries to make progress.”
As Secretary Clinton also emphasized at the 2011 APEC SOM I meetings in Washington, DC, as our communities demand greater accountability, transparency and participatory governance, we must deliver.
Through collective action, we are working strategically across APEC sub-fora to remove barriers to trade and investment; to create economic opportunities; support balanced, inclusive green growth; and strengthen public-private partnerships that promote clean trade.
The work of the ACT and ABAC has contributed positively to APEC’s open and transparent framework, including through the Santiago Commitment and Course of Action to Fight Corruption and Ensure Transparency, the APEC Code of Conduct for Business, the Conduct Principles for Public Officials, and the Complementary Anti-Corruption Principles for the Public and Private Sectors. The Codes/Principles are being implemented not only through capacity building workshops – such as those in Big Sky at SOM II or on this Friday, September 15th, 2011, on illicit enrichment – but also through the development of public-private partnerships among government and law enforcement officials, civil society representatives, chambers of commerce, and small and medium sized enterprises (SMEs).
We must also take seriously the Yokohama commitment to strengthen our efforts to curb corruption and improve enforcement by, for example, reporting and fully implementing our agreed actions to combat corruption and bribery.
Disrupting Illicit Pathways, Dismantling Illicit Networks, and Targeting Illicit Enrichment
This includes, consistent with the Santiago commitments, committing ourselves to implementing the UN Convention against Corruption (UNCAC) and undertaking a full review on a wide range of measures, including criminalization, preventive measures, and the recovery of stolen assets.
The UNCAC complements the OECD’s Anti-Bribery Convention, which targets transnational bribery in the conduct of business. As we have recognized in our ACT work, bribery in international business, both on the part of companies bribing government officials and officials demanding bribes from companies to grant them licenses, permits, or business deals, undermines free and fair competition and perpetuates a culture of corruption.
Through our joint efforts in APEC, a commitment to effectively fight transnational bribery around the world is key to ensuring integrity in global markets and supply chains and sustaining not only our shared prosperity but also to protecting the market reputations and brand names of our companies’ internationally-recognized products.
We must also continue to deny safe haven to kleptocrats around the world, to bar their illicitly-acquired assets, and to give notice that continued theft from our economies will not be tolerated. Following the money must be an integral part of our strategies to deny criminals and their networks access to entities and mechanisms used to hide and launder their illicit criminal proceeds. We commend Thailand and the National Anti-Corruption Commission (NACC), and others, for leading ACT capacity-building efforts in recent years to combat money laundering and help track the criminal proceeds of kleptocrats and illicit networks alike. We also look forward to the third Trans-Pacific workshop on combating corruption and illicit trade to be held in Phuket, Thailand in October 2011.
Depriving the networks of their profits and funding is one of the most effective ways to deter them. This requires a holistic, comprehensive anti-money laundering regime with the ability to trace, freeze, and seize assets related to illicit financial flows, while addressing both formal and informal financial networks.
Financial/asset disclosure also serves as a significant anti-corruption measure that discourages both improper interests and improper acts given that improper interests will have to be reported and improper acts will be seen to affect reported interest. Financial/asset disclosure also helps investigators detect the source of corrupt influences and provides documented discrepancies between what is disclosed and the receipt of illicit and unethical gain. In 2011, the ACT will take a comprehensive approach and address ways to plug vulnerabilities upfront in traditional channels prone to corruption and to ensure the public trust in institutions, markets, and supply chains.
Combating corruption and achieving sustainable development and progress in dismantling illicit markets and networks also require collective action and a shared responsibility among APEC partners, as well as close coordination with relevant regional and international organizations that have important expertise and capacities to confront mutually-shared criminal threats in the Asia-Pacific region.
The ACT’s record of achievement to strengthen cooperation with other international and regional organizations has always been strong. We have leveraged new and exciting collaborative platforms with the United Nations Office on Drugs and Crime (UNODC), the World Bank, the Asian Development Bank (ADB), OECD, ASEAN, INTERPOL, the International Anticorruption Academy (IACA), as well as with civil society groups such as Transparency International. Next week I have been invited to report on our ACT work at the Steering Group meeting of the ADB/OECD Anticorruption Initiative for the Asia-Pacific region, to be held in New Delhi, India. We plan to encourage greater collaboration with ADB and OECD partners to build further synergies across the Asia-Pacific region and to ensure that activities strengthen overall regional economic integration, expand trade, and promote democratic governance.
The Way Forward: Greater Integrity in APEC Economies, Markets, and Supply Chains
When both public and private sectors lead and partner together, we can create a culture of integrity that has a lasting impact. We can create a better future by uniting in our support of accountability and good governance and against corruption. Through our continued cooperation with our international partners, we can build societies where all individuals can achieve the full extent of their potential. And through a new commitment to responsible governance, we can build a firm foundation to invest the integrity dividends for future generations.
In closing, on behalf of the United States, I wish to applaud our APEC partners for collaborating and participating in today’s dialogue, and in the discussion on anchoring a firm accountability and reporting mechanism to fulfill our Leaders’ commitment to combat corruption and illicit trade and strengthen integrity across our respective economies, markets, and supply chains.