Anti-Corruption Lead: Shruti Shah, Transparency International-USA()

When the G20 leaders meet in September to discuss pressing global issues, it is imperative that they take action to address the needs of the world’s poorest and most vulnerable people. This paper contains the recommendations of the G7/G20 Advocacy Alliance (US), a group of 45 non-governmental organizations. They call for the United States to play a leading role in encouraging the G20 to take the following actions:

Anti-Corruption
Lead: Shruti Shah, Transparency International-USA()

Implement and effectively enforce the OECD Anti-Bribery Convention (OECD Convention).

All G20 countries should become parties to the OECD Convention, participate in the peer review process, and take concrete steps to strengthen implementation and enforcement of their foreign bribery laws.

Implement effective anti-money laundering actions through enhanced transparency of legal persons and arrangements and continue to support asset recovery initiatives.

G20 countries should take concrete actions to implement the G20 High-Level Principles on Beneficial Ownership Transparency in 2016.
Enhance implementation of the Financial Action Task Force recommendations within a two-year time frame.

Deny entry to corrupt officials.To implement the G20 Common Principles For Action: Denial of Safe Haven in 2016, the G20 Anti-Corruption Working Group should:

Establish a common set of criteria to be used for denial of entry across the G20 jurisdictions. This will help to reduce risks and concerns that enforcement is uneven or arbitrary.
Make public the national contact points and working methods for the Denial of Entry Experts’ Network.
Provide opportunities for the public to provide relevant information.

Food and Nutrition Security
Lead: Manuel Claros, 1,000 Days ()

Implement a strong accountability framework monitoring ODA increases, including:

Food and nutrition security investments, with annual public reporting;
Enhanced transparency withdisaggregated data on vulnerable groups;
Reporting codes weighting; and
Schedules fulfilling outstanding pledges.

Accelerate implementing SDG 2 by mobilizing resources and attending the Rio Nutrition for Growth Summit in August.
Commit in the Communique that each member will mobilize resources and attend the Summit at the highest level possible.
Reaffirm investments to benefit vulnerable populations,including small-scale producers, women, and children, by improving nutrition outcomes and integrating gender.
Increase technical and financial support to existing efforts, including the Scaling Up Nutrition Movement, the Comprehensive Africa Agriculture Development Program, and the Global Agriculture and Food Security Program.

International Tax and Financial Transparency
Lead: Tom Cardamone, Global Financial Integrity ()

The BEPS Action Plan should require multi-national corporations’ country-by-country reports to be fully available on each company’s website.
The automatic exchange of tax information should include non-reciprocal exchange of information, on a temporary basis, with developing countries.

a.Assistance should be provided to developing nations, as needed, to upgrade their capacity to participate in the global standard.

G20 countries should focus a portion of their ODA funding to provide technical support and capacity building for developing countries’ customs departments to detect and curtail trade mis-invoicing.

Jobs and Employment

Lead:Molly McCoy, Solidarity Center ()

Coordinate demand stimulus for job creation and inclusive economic growth:
Set targets of 1% of GDP for public, social, and physical infrastructure investment.
Ensure that liquidity created by central banks is channeled directly into increased public investment in infrastructure, innovation, job creation, skills development, and a just transition to a low-carbon economy.
Promote decent work, especially for the most vulnerable people:
Strengthen labor market institutions to promote wage growth and quality employment: social dialogue, collective bargaining, wage setting mechanisms, labor legislation.
Reinforce social protection, occupational health and safety protection, and parental benefits.
Extend protection to the most vulnerable groups: migrants, women, and informal economy workers.
Adopt a whole-of-government approach and scale up quality apprenticeships through strong partnerships with civil society, including trade unions, to implement the G20 Skills Strategy.
Invest in child care and the care economy to meet the “25 by 25” target on women’s employment before 2025.
Target commitments to resettle refugees and migrants, and provide them the right to work in the formal economy with full labor rights.

Pro-poor and Clean Infrastructure and Investment

Lead: Sasanka Thilakasiri ()

Apply mandatory investment principles through:
Defined development outcomes, increasing access and affordability of infrastructure services.
Robust evaluation, negotiation and monitoring of the investment contracts.
Green Procurement standards.
Improved CSO engagement throughout the project cycle.
Improved transparency provisions, including on- and off-budget public liabilities.
Prioritize financing for clean, pro-poor infrastructure development being fully consistent with INDC/NDCs[1] and the Paris Agreement on the mobilization of climate finance by 2020 by:

Setting a clear timeline for the full and equitable phase-out of all harmful fossil fuel subsidies by 2020, while ensuring protection for the poor.
Prioritizing clean energy, low carbon development, adaptation, and resilience.
Continued prioritization of clean energy-access in sub-Saharan Africa.

Support the alignment of financial markets with sustainable development and human rights by:

Enhancing the Green Finance Study Group’s financing options with a commitment to a direct articulation of human rights.
Third party verification and monitoring of standards with mandatory climate risk and performance disclosures for both the corporate and finance sector.

BACKGROUND

Anti-Corruption

The G7/G20 Advocacy Alliance welcomes the G20’s continued focus on global corruption. The G20 Anti-Corruption Action Plan for 2015-2016 contains significant anti-corruption commitments. In order to assure corruption is meaningfully tackled all G20 countries must fully implement the plan with urgency.The G20 Working Group on Corruption should lead by example, operating with the highest degree of transparency and providing opportunities for meaningful civil society participation.

OECD Anti-bribery Convention

Cross-border corruption has negative consequences for economic growth, development, and international business. According to Transparency International’s 2015 Progress Report on the status of enforcement of the OECD’s Anti-Bribery Convention, only four countries actively enforce the Convention and there is little or no enforcement in twenty countries. Additionally, many large economies such as China, India, and Indonesia are not yet parties to the Convention.

Beneficial Ownership

Major corruption scandals often involve the use of anonymous shell companies situated across multiple jurisdictions to transfer and hide illicitly-sourced funds and mask the identities of corrupt actors. In recent years, several commitments have been made to tackle the misuse of these corporate vehicles. In 2014, the G20 leaders adopted High-Level Principles on Beneficial Ownership Transparency, describing financial transparency as a “high priority” issue. Transparency International produced a report in 2015, Just for Show? Reviewing G20 Promises on Beneficial Ownership, assessing the extent to which G20 members are fulfilling their legal and regulatory commitments implicit in the G20 principles. The report highlights poor implementation of the beneficial ownership principles.

Deny entry to corrupt officials

Corrupt officials should not be able to travel with impunity or enjoy their illicit gains abroad. At the 2012 Los Cabos Summit, the G20 Leaders’ Declaration endorsed the G20 Common Principles For Action: Denial of Safe Haven and initiated a denial of entry experts’ network.

Food and Nutrition Security

The G20 has served as an important international forum at which countries have committed significant financial resources to tackle hunger and malnutrition. Despite the progress toward transparency, however, a robust accountability framework to coherently measure investments is still needed.[2]

The Rio Nutrition for Growth Summit in August 2016 is a critical moment for the G20 to pledge resources to improve nutrition and to report on progress toward reducing undernutrition. For several members, it is an opportunity to announce the substantial contributions to these goals and the fulfillment of outstanding commitments. SDG 2 and otherhealth-related SDGs,[3] as well as the Global Nutrition Targets,[4] can only be realized with increased financial commitments to nutrition.Greater investments in nutrition are lifesaving and boost GDP by as much as 12%.[5]

As the 2016 G20 president, the Chinese Government has committed to lead and transform the world through sustainable development. This includes encouraging members’ participation at the highest level in the Nutrition for Growth Summit to fulfill the G20 commitments.

International Tax and Financial Transparency

The G20’s Call to Action for Strengthening Tax Capacity in Developing Countriesdocument contains significant commitments to help countries increase domestic resource mobilization. In order to assure these steps are successful, all G20 countries should fully implement the plan with urgency.

Under the rules of the Base Erosion and Profit-Shifting (BEPS) Project, multi-national corporations that have revenue of more than €750 million (or its equivalent) must report basic financial information such as income earned and taxes paid in each jurisdiction where the firm operates. However, that information, which is vitally important to stockholders, analysts, academics, journalists, and the public, is currently only available to government authorities. This reporting requirement falls short of what is needed for full transparency of company data to ensure proper taxes are paid for business activity in the jurisdiction where the activity occurs. Requiring country-by-country reports on firm websites will enable all stakeholders to obtain key tax data of multi-national firms, which will facilitate increased oversight.

The global standard of exchanging tax information of non-residents with their home government reduces the possibility of tax evasion. Further, as the OECD has noted, this exchange of information will also enable governments to discover “formerly undetected tax evasion” and to “recover tax revenue lost to non-compliant taxpayers.”[6] Global efforts to achieve policy coherence with the Addis Ababa Action Agenda, the Addis Tax Initiative, and the Sustainable Development Goals all stress the importance of boosting domestic resource mobilization to aid development. This suggests that developing country governments should not be denied the ability to receive vitally-important tax revenue because they are, as yet, unable to reciprocate data transfer.

The G20’s Call to Action for Strengthening Tax Capacity in Developing Countries provides a thorough overview of various programs available to help developing nations bolster their tax administrations. However little is said about tackling the problem of illicit flows - and the related tax loss - through customs departments due to trade fraud. Of the estimated $1 trillion in measurable illicit financial flows in 2013, over $875 billion were related to the mis-invoicing of trade.[7] Creating robust tax authorities is important, but ignoring the crisis in customs departments risks failing to meet the SDGs. Given that illicit flows due to mis-invoicing are severe and clearly illegal, measures to address the issue are required.

Jobs and Employment

Almost a decade after the global financial crisis, working people continue to suffer its consequences. Nearly 2.2 billion people worldwide still live on less than $2 per day,[8] and global unemployment[9] and inequality are rising. This year, 1% of the population will control 50% of the world’s wealth.[10]

This trend threatens economic recovery, undermines political stability, and stifles equitable development.Therefore,G20 countries must focus on promoting a model of inclusive growth that places sustainable, quality employment at the fore. Strengthening worker rights and social protection systems, and introducing social protection floors to support a transition away from the informal economy in developing and middle- income countries are necessary steps toward ensuring that all workers have access to safe, decent employment.

The G20 countries must take concerted action to boost aggregate demand and reduce inequality throughcoordinated stimulus policies that prevent relapse into a new crisis. Securing higher wage growth through strengthened labor market institutions will avoid zero inflation from becoming entrenched through weak wage agreements. This will re-anchor inflation expectations and, as agreed by the G20 under the Turkish presidency, help correct rising inequality and the falling labor income share. Strengthening worker rights and social protection systems, as well as introducing social protection floors to support a transition away from the informal economy in developing and middle-income countries, are necessary steps toward providing all workers with access to safe, decent employment. Countries must ensure that G20 companies respect international labor standards and human rights, including the UN Guiding Principles, ILO conventions, and OECD Guidelines for Multinational Enterprises, in their global supply chains. They should also strengthen rule of law with cross-border legislation that mandates due diligence. G20 countries must deliver on their prior G20 commitments and implement the structural policy reforms outlined in their comprehensive growth strategies and employment plans to reduce unemployment and income and gender inequality.

Pro-poor and Clean Infrastructure and Investment

2015 saw two major historic moments for environmental stewardship and development cooperation with nations agreeing on the Sustainable Development Goals and the Paris Climate Conference (COP21).Both outcomes set the pathway for all nations to achieve inclusive growth that is environmentally sustainable, low carbon, and climate resilient. G20 nations have a unique opportunity following these agreements to set the financing agenda in accordance with these commitments by ensuring that infrastructure investment serves the needs of the poor while ensuring long-term environmental sustainability. Building off specific initiatives from last year’s summit will be important, such as setting a target date for the phasing out of harmful fossil fuel subsidies and advancing the Energy Access Plan in prioritizing clean energy. Countries can decarbonize their economies and still achieve significant inclusive growth.

Concerns remain that significant work streams in the G20 – the adoption of G20/OECD Principles on Long-Term Investment Financing by Institutional Investors and effective approaches to them, the updated G20/OECD Principles of Corporate Governance, and World Bank-designed Model PPP Contractual Clauses – are parallel to such commitments. These may undermine their implementation and the restructuring of the financial sector to promote pro-poor, clean energy infrastructure.

Environmental, social, and governance principles need to be strengthened, with an emphasis on human rights, and implemented toward these goals. It is particularly importantto do so within new financing institutions and platforms such as the Asia Infrastructure Investment Bank, as well as reviews being undertaken within the World Bank safeguards. Such due diligence will increase profitability of ventures and protect the global economy from future economic and environmental shocks.

Additionally, the financial and corporate sector is ill-equipped in reporting on climate risk and climate performance disclosure, based on findings from UNEP FI and the Bloomberg Climate risk initiative reports. Of the world largest funds (worth over $40 trillion), only 7% could calculate the GHG emissions within their portfolio, with few of them knowing their exposure to climate risk. Such reporting needs to be increased to minimize both climate and investment risk.

While the statement is not designed to be a consensus position of the contributors, it has been endorsed by InterAction’s leadership. Each set of recommendations was developed and/or endorsed by a Policy Team of the G7/G20 Advocacy Alliance, listed below.

Anti-Corruption

Transparency International-USA,

Shruti Shah (Lead)

Global Witness, Stefanie Ostfeld

InterAction, John Ruthrauff

New Rules for Global Finance, Nathan Coplin

ONE, Joseph Kraus

Endorsers:

Global Poverty Project

Food Security and Nutrition

1,000 Days,

Manuel Claros (Lead) and Kate Goertzen

ActionAid USA, Katie Campbell and Doug Hertzler

Bread for the World, Faustine Wabwire

Global Poverty Project, Judith Rowland

InterAction, John Ruthrauff

Oxfam America, Gawain Kripke

Save the Children, Shawnee Hoover

International Tax and Financial Transparency

Global Financial Integrity, Tom Cardamone (Lead)

ActionAid USA, Katie Campbell and Marie Clarke

InterAction, John Ruthrauff

Jubilee USA Network, Andrew Hanauer

New Rules for Global Finance,

JoMarie Griesgraber

ONE, Joseph Kraus

Oxfam America, Gawain Kripke

Endorsers:

Global Poverty Project
Jobs and Employment

Solidarity Center, Molly McCoy (Lead)

ActionAid USA, Marie Clarke

InterAction, John Ruthrauff

Sabin Vaccine Institute/Global Network for

Neglected Tropical Diseases,

Amber Cashwell

Trade Union Sustainable Development Unit,

Robert Lovelace

Endorsers:

Global Poverty Project

Pro-poor and Clean Infrastructure and Investment

Oxfam America, Sasanka Thilakasiri (Lead)

Center of Concern, Aldo Caliari

Heinrich Boell Foundation, Nancy Alexander

InterAction, John Ruthrauff

Sabin Vaccine Institute/Global Network for

Neglected Tropical Diseases,

Amber Cashwell

Union of Concerned Scientists, Alden Meyer

Endorsers:

Global Poverty Project