the common agenda of anti-kleptocracy and environmental sustainability // may 8
by Lily Sabol and Aidan McGahey, International Forum for Democratic Studies
Our research at the International Forum has consistently outlined kleptocracy’s threat to democracy, good governance, and the financial system, but there is also another aspect of kleptocracy’s unfolding impact: the threat to environmental sustainability. Corrupt countries enable environmental degradation through both the lack of resource protection provided by the rule of law and a general disregard among kleptocrats for the health of citizens and the environment. In many countries, kleptocratic behavior is financed by income from fossil fuels that serves to bolster kleptocrats’ ability to engage in illicit financial activities. Leaders profit from the extraction of natural resources that can cause extensive environmental damage; at the same time, they weaponize rare earth minerals essential to climate solutions and embezzle Western funding for environmental programs.
Many solutions to combat kleptocracy and tackle climate change, in fact, go hand-in-hand: creating and upholding anti-corruption safeguards, building and expanding the anti-corruption and climate activist network, and bringing this issue to the forefront of new policy debates.
The contexts in which kleptocracy thrives also incentivize environmental destruction. Weak rule of law in kleptocratic source countries facilitates corrupt business practices and impedes the enforcement of environmental protections and regulations, through networks of bribery and corruption. In the Democratic Republic of the Congo, for example, government officials, criminal groups, and militias abuse the environment with no consequences due to a lack of authority that is perpetuated by the kleptocratic regime. Shell companies and illegal assets are also used by environmental abusers to hide their cashflows from regulators and financial watchdogs. From 2011-2015, Nigerian businessmen paid bribes to the head of the country’s state-owned oil company to obtain the oil contracts, and then used the funds to purchase assets through shell companies in the United States. Other environmentally harmful industries, from illegal logging and fishing to oil extraction, rely upon these same shadowy financial networks to shield their cash flows from regulation and oversight.
More specifically, environmentally destructive resource exploitation, namely of oil and gas, enriches leading kleptocratic regimes. Some of the countries widely recognized to be captured by kleptocratic networks—Russia, Venezuela, Equatorial Guinea, the Republic of the Congo—all have regimes that rely heavily upon oil, natural gas, and rare earth minerals for their revenue. Moreover, the extractive process for minerals used in green technology creates opportunities for corruption and labor abuses, particularly given the presence of such minerals in countries with high levels of corruption. As numerous studies show, the large influx of financing to extract natural resources, along with easily swayed local officials, creates an enormous opportunity for embezzlement and enables kleptocratic behavior.
In the midst of this concerning context, funding for environmental and sustainability programs—frequently from Western donors—is often provided to kleptocratic countries. The most corrupt countries are simultaneously some of the top recipients of climate-related assistance. Unsurprisingly, studies have demonstrated that this assistance is often abused and stolen. For example, a Foreign Policy investigation has shown that a UN environmental project in Russia misappropriated millions of dollars. UNDP officials did not adequately oversee and monitor the project, seeing as funding was often provided to relatives of Russian UN officials managing the project.
The same safeguards that anti-kleptocracy advocates promote for transparency and accountability—such as scaling enforcement mechanisms, modifying procurement processes, repatriating assets, and improving beneficial ownership regulations—are also important for preventing environmental damage. There is significant overlap between the tactics used by environmental criminals and kleptocrats, as well as the situational context that enables their crimes. Actions to protect the health of the planet, like minimizing reliance on fossil fuels and protecting access to vital minerals, would have a secondary effect of weakening the enabling environment for kleptocratic rule.
The challenge that kleptocracy poses to democracy is immense and complex. To properly combat it, a broad coalition of activists, including those working on solutions to climate change, is needed to galvanize the many different parts of civil society for a cohesive response. By working together, climate and democracy advocates can leverage collective action to make this connection clearer to journalists and policymakers, and campaign for a healthier, more democratic world.