Beneficial ownership commitment in the Open Government Partnership (OGP) platform is rapidly growing. 21 OGP members have made beneficial ownership commitments. Moreover, the Beneficial Ownership Leadership Group, a coalition of government that will implement beneficial ownership commitment, has launched in the OGP Summit in Ottawa, last (30/5). The group will facilitate implementor countries to carry out an ambitious beneficial ownership policy and importantly share knowledge and best practice in implementing beneficial ownership commitments.
An effective implementation is the key to translate the commitments into impactful changes. However, many face a number of challenges, especially developing countries.
In Indonesia, the legal umbrella for beneficial ownership policy has been issued since March 2018. One year has passed, but the infrastructure mandated by the regulation has not been in place, such as the data collection, storage, and processing system.
Data verification is still a challenge in the implementation of beneficial ownership commitment in Indonesia, as conveyed by Slamet Soedarsono, the Deputy for Politics, Law, Defense, and Security, the National Development Planning Agency when opening the Knowledge Café[1] session to better map out the challenges in implementing beneficial ownership commitments in the OGP Summit last month. Some of the identified challenges include:
Political Will
Political will is touted as the biggest challenge in implementing the beneficial ownership commitments. A concrete political will must be translated into an ambitious, specific, and achievable target. One of them is formulating the beneficial ownership legal framework. All stakeholders must be involved in developing the legal framework, including the private sector and civil society.
Company Compliance
Once the beneficial ownership legal framework has been established, thing to be considered is the compliance of the company. Especially for countries who still use self-reporting principles in beneficial ownership data reporting. For that reason, outreach the private sector is needed, namely by emphasizing the incentives that they will got from the BO policy implementation. Basically, no one want to do business in a high-risk country.
Data Accuracy
Data become a crucial issue in the implementation of beneficial ownership commitments. It is important to ensure the beneficial ownership data delivered by the company is a valid information. As an alternative, government can draft a regulation that allow the government to pursue the company, if the provided beneficial ownership information is deemed incorrect, as applied in Slovakia. Thus, the burden of verification is heavily in the company side.
Linking with Other Openness Initiative (Open Contracting)
Beneficial ownership commitment is believed will give more meaningful impact if it is linked with other openness initiatives, such as Open Contracting. This can be used to reduce the potential of corruption in the good and service procurement, as well as in licensing. However, one needs to think about the data availability and interoperability to make it happen.
[1] Session “Implementing Open Contracting and Beneficial Ownership to Combat Corruption in Challenging Contexts is one of the parallel session at the 2019 OGP Summit organized by Publish What You Pay (PWYP) Indonesia along with The Engine Room, Transparency International (TI) Australia, and Natural Resource Governance Institute (NRGI).