African Monitor to continue tackling illicit financial flows

African Monitor (AM), in collaboration with Economic Justice Network (EJN) hosted a round-table         workshop for Civil Society Organizations (CSOs) engagement on Illicit Financial Flows (IFFs) in the coal and gold sectors from 22-24 November 2017 in Pretoria.

This workshop builds on previous work on IFFs conducted by AM and EJN in the last three years, which has generated great interest among policy makers, citizens and relevant authorities – including the South Africa Revenue Authority, the Davis Tax Commission, as well as National Treasury. The work by AM and EJN on IFFs include initial dialogues with regulatory institutions, publication of a policy brief and a study on regulatory frameworks on IFFs.

With research revealing that South Africa has lost R1 trillion in IFFs between 2002 and 2011, and that in 2011 alone the country lost R237 billion – which could have funded one million students through NFSAS, created 6.6 million jobs for the youth, or built a clinic in every village – AM and EJN are set to continue their advocacy work by focusing on the “so what now” approach.

Given that significant awareness has been raised on what IFFs are and their impact, the focus should now be on the “so what now” or the “how” aspect of IFFs, taking into account an interactive advocacy approach where additional and new data has to be used to further sharpen advocacy work. Therefore, the two organisations (AM and EJN) have organised a CSOs forum on illicit financial outflows in South Africa, bringing together national civil society organisations, anti-corruption agencies, activists, media, and the private sector.

AM has commissioned a study to understand the phenomenon deeper in the extractive sub-sector, mainly the nature, quantity and systems used by corporations in the coal and gold sectors to engage in illicit financial flows. The results of this research will be shared in the soon-to-be released report.

“With this information we are therefore looking forward to deepening engagement, especially on the policy reform agenda, and how civil society, ordinary citizens and policy makers can work together to reduce IFFs in South Africa,” said AM director Namhla Mniki-Mangaliso.

The most important aspect in rolling out the “how” to reduce IFFs is to understand where the bottlenecks are in terms of action from key stakeholders, including policy makers.

To date, AM research has shown that the key bottlenecks constraining action by policy makers include lack of actionable data and information on dominant forms of IFFs such as trade mispricing and misinvoicing; as well as lack of coordination mechanism and performance management systems for key institutions responsible for addressing IFFs.

AM is a founding member of the steering committee of the existing South African CSOs Coalition working on reducing IFFs. Other steering committee members are Economic Justice Network, Oxfam, Action Aid, Mining Affected Communities, Corruption Watch and ONE.