In February, we posted that Malawi lost USD 4,691 million between 2001 and 2010 due to illicit financial flows, which is likely to increase with the growing mining sector. Last week, a critical step was taken to curb illicit flows. Resolution 236 on Illicit Capital Flight from Africa was adopted by participants gathered for the African Commission on Human and Peoples’ Rights 53rd Ordinary Session (9 to 23 April 2013) in Banjul, The Gambia.
The Resolution on Illicit Capital Flight from Africa calls on nations to put in place rules and regulations to curb capital flight from the continent. This is essential as estimates suggest that for every USD 1 developing countries receive in official development assistance, usually from nations that are home to the head quarters of companies engaged in nerfarious financial practices, USD 10 is lost through illicit outflows.
Among the 632 delegates, Malawi was represented by the Ministry of Justice’s Senior Deputy Chief State Advocate Pacharo Kayira, the Malawi Human Rights Commission’s Director of Children’s Rights Noris Mangulama, and the Centre for Human Rights and Rehabilitation’s Programme Manager Timothy Pagonachi Mtambo. Malawi’s participants will be responsible for communicating the actions required by civil society and government based on the three resolutions: 234 Resolution on the Right to Nationality, 235 Resolution on Transitional Justice in Africa, 236 Resolution on Illicit Capital Flight from Africa.
Malawi, by committing to this resolution (see below), is called on to “examine their national tax laws and policies towards preventing illicit capital flight in Africa”.
Currently, Malawi ranks 75th out of 143 countries for largest average illicit financial flow estimates for 2001 to 2010.
The Resolution on Illicit Capital Flight from Africa reads as follows:
Recalling the provisions of Article 45 (1) (b) of the African Charter on Human and Peoples’ Rights which provides that the Commission shall “ formulate and lay down, principles and rules aimed at solving legal problems relating to human and peoples’ rights and fundamental freedoms upon which African governments may base their legislation”;
Taking into cognisance the establishment by the United Nations Economic Commission for Africa of a High-Level Panel on Illicit Financial Flows from Africa to determine the nature, pattern, scope and channels of illicit financial outflows from the continent; sensitize African governments, citizens, policy makers, political leaders and development partners to the problem; mobilize support for putting in place rules, regulations, and policies to curb illicit financial outflows; and influence national, regional and international policies and programmes on addressing the problem of illicit financial outflows from Africa;
Recognising that illicit capital flight undermines the capacity of State Parties to implement the African Charter on Human and Peoples’ Rights and to attain the Millennium Development Goals;
Noting that illicit capital flight by both multinational companies and individuals from Africa leads to the loss of billions of US dollars every year;
Deeply concerned that Africa is embroiled in a vicious circle of poverty, malnutrition, diseases and death because its revenue potential is being drained by multinational companies and individuals throughexploitation of the loopholes and weaknesses of laws and of the monitoring system;
Conscious that without adequate resourcesthe respect, protection and implementation of human rights enshrined in the African Charter on Human and Peoples’ Rights will remain illusory;
Conscious that foreign aid is a short-term, unsustainable and unreliable form of revenue, this requires State Parties to take measures to create a revenue base;
Recognising the need for State Parties to develop and implement robust and efficient tax collection systems;
Noting that human rights cannot be fully achieved without the availability of resources;
Concerned that State Parties have repeatedly invoked lack of financial resources to effectively implement charter based human rights;
Convinced that the conduct of an in-depth study on the impact on human rights of illicit capital flight from Africa will contribute to the development of effective human rights-based measures and solutions;
Requests the Working Group on Economic, Social and Cultural Rights in Africaand the Working Group on Extractive Industries, Environment and Human Rights Violations in Africa to undertake an in-depth study on the impact of illicit capital flight on human rights in Africa;
Calls upon civil society and other stakeholders to support the work of the Joint Study Group;
Calls on State Parties, to examine their national tax laws and policies towards preventing illicit capital flight in Africa.
Banjul, The Gambia, 23 April 2013