The economic, social and political repercussions of the COVID-19 pandemic will be with us for years, if not decades. It is already clear that the impact of these changes will extend well beyond the immediate public health crisis. Pre-existing weaknesses and issues in global governance have become further exacerbated during the crisis. Beneficial ownership opacity – not knowing who owns and controls businesses – is a profound weak point that many countries are taking with them as they confront the pandemic.
As governments around the world mobilise funds to meet the public health crisis, the economic resilience and good governance imperatives for publishing the owners of companies are becoming stronger and more urgent. With trillions of dollars being directed to mitigate the crisis, much focus is understandably on enabling emergency procurement of immediate healthcare supplies and shoring up jobs, livelihoods and key supply chains.
However, by doing so, analysis shows that key checks and balances are being eased or breached, increasing the risk of money being lost to fraud and corruption, or otherwise diverted away from supporting those most in need. Just as the pandemic has exacerbated pre-existing weaknesses in health systems, the impact of pre-existing governance issues has also been heightened. Last week’s OECD anti-corruption and COVID-19 event underscored the increased corruption risks during the pandemic, with the chair of the OECD anti-bribery working group describing current conditions as “a paradise for corruption”. We cannot afford to wait until the immediate public health crisis has abated before tackling the corresponding crisis emerging in governance.
OpenOwnership recently held an expert panel with leading representatives from government, industry, civil society, academia and the media to discuss how beneficial ownership transparency cuts across both short term emergency response and longer term economic recovery.
Five areas were identified where beneficial ownership transparency is key:
As the impact of the pandemic continues to unfold, we have been consulting with partners to identify how OpenOwnership can best respond, and testing out new ways of working. Going forward, our approach is two-fold: firstly, in response to demand from governments and civil society actors, we will continue to support beneficial ownership reforms where they are already underway. In addition, we will support countries making commitments to beneficial ownership transparency as part of their COVID-19 response.
Secondly, we are responding to the heightened risks of beneficial ownership opacity in public procurement and delivery of economic stimulus packages, by providing guidance and easy to deploy tools to increase the availability and use of beneficial ownership data in these contexts.
To help us meet these delivery needs, we have started to simplify our guidance and tools. These are framed around the recently launched OpenOwnership Principles. The OO Principles define what good beneficial ownership transparency looks like in practice, distilling down the research and analysis we have conducted over the last three years.
The Principles will guide our support to governments to generate and use beneficial ownership data to address the wide range of integrity and governance challenges we face in both the short and long term as the world navigates the COVID-19 pandemic. In the language of the IMF’s latest Fiscal Monitor, governments should “do what it takes” to deliver economic support, “but keep the receipts” – disclosing who benefits from contracts and financial support to companies is critical to ensuring accountability in countries’ responses to the pandemic.