Title

Developments in the Western Balkans and Policy Responses

Wednesday, March 05, 2014
106 Dirksen Senate Office Building
Washington, DC 20515
United States
Members: 
Name: 
Hon. Ben Cardin
Title Text: 
Chairman
Body: 
Commission on Security and Cooperation in Europe
Name: 
Hon. Chris Smith
Title Text: 
Co-Chairman
Body: 
Commission on Security and Cooperation in Europe
Statement: 
Name: 
Hon. Eliot L. Engel
Title Text: 
Congressmember
Body: 
United States House of Representatives
Name: 
Hon. Adam Kinzinger
Title Text: 
Congressmember
Body: 
United States House of Representatives
Witnesses: 
Name: 
Hoyt Yee
Title: 
Deputy Assistant Secretary for European and Eurasian Affairs
Body: 
U.S. Department of State
Statement: 
Name: 
Tanja Fajon
Title: 
Member (Slovenia)
Body: 
European Parliament
Statement: 
Name: 
Kurt Volker
Title: 
Executive Director
Body: 
The McCain Institute for International Leadership
Name: 
Contribution of the European Union

This hearing on the Western Balkans examined the progress being made towards democratization. Commissioners Benjamin L. Cardin and Christopher H. Smith presided over the hearing, which included testimonies from: Hoyt Yee, Deputy Assistant Secretary for European and Eurasian Affairs for the U.S. Department of State;  Tanja Fajon, Member for the European Parliament from Slovenia; and Kurt Volker, Executive Director of the McCain Institute for International Leadership.

This hearing held great significance, not only for the members of the Commission, but the wider foreign policy community, as whilst the Western Balkans is no longer the setting for violent conflict that it was two decades ago, the United States has had to devote considerable resources—financial, diplomatic and military —to restore peace and to encourage the democratic and other reforms necessary to sustain it. However, that job is not yet done—the need to see the task of a stable, democratic and fully integrated Western Balkans is yet to be completed.
 

http://www.senate.gov/isvp/?type=live&comm=csce&filename=csce030514

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  • Ukraine's Upcoming Elections: A Pivotal Moment

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  • Healing the Wounds of Conflict and Disaster: Clarifying the Fate of Missing Persons in the OSCE Area

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  • Kazakhstan: As Stable As Its Government Claims?

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The mechanism had been invoked in April by 14 participating States and a report was presented to the OSCE Permanent Council by the Mechanism Rapporteur, Professor Emmanuel Decaux, on May 28. NGOs also demonstrated throughout the meeting on behalf of Belarusian political prisoner Alex Bielatskiy. The United States also raised issues which remain unresolved following the 2003 invocation of the Moscow Mechanism regarding Turkmenistan. In particular, Ambassador Johnson drew attention to the continued disappearance of Ambassador Batyr Berdiev, the former representative of Turkmenistan to the OSCE. Although Turkmenistan officials did not to participate in the HDIM, human rights groups concerned with Turkmenistan were present and members of the opposition-in-exile made a statement expressing their willingness to return to Turkmenistan and participate in the February 2012 presidential elections. They also called for the OSCE to conduct a full election observation mission for those elections. 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The outbreak of anti-Roma rioting in every major Bulgarian town or city during the HDIM underscored the urgency of addressing the chronic human rights problems affecting Roma as well as the acute and escalating crises. Many participants also raised concern regarding continuing human rights abuses against ethnic Uzbeks in southern Kyrgyzstan in the wake of widespread violence last year and in advance of Kyrgyzstani elections in October. During the formal sessions, NGOs demonstrated on behalf of Kyrgyzstani political prisoner Azhimzhon Askarov. The United States engaged fully in all aspects of the meeting, holding bilateral meetings with other OSCE participating States and extensive consultations with NGOs. The United States also organized two side events. The first focused on on the Hague Convention on the Civil Aspects of International Child Abduction. Professor Louise Teitz from the Hague Permanent Bureau (an intergovernmental organization that administers this and other Hague Conventions), and Corrin Ferber from the Department of State, made presentations, with additional comments provided by Consul General Linda Hoover, U.S. Embassy Warsaw. The second event focused on fundamental freedoms in the digital age. DAS Thomas Melia moderated the discussion, which included comments by the OSCE Representative on Freedom of the Media, Dunja Mijatovic; Agata Waclik-Wejman, policy counsel for Google; and Nataliya Radzina, a Belarusian journalist who faces a lengthy prison sentence in Belarus. Conclusions The Human Dimension Implementation Meeting served as an important forum for the United States to raise issues of concern, both formally and informally, and to hold extensive consultations with governments, OSCE officials, and representatives of civil society. That said, this year's HDIM was somewhat diminished relative to past meetings. First, member states of the European Union appeared divided or preoccupied (or both). As a consequence, on a number of subjects – for example, the session that included migrant workers, refugees, and displaced persons -- there was neither a coordinated European Union statement nor statements by individual EU member states speaking in their national capacity. This voice was missed. Second, the level of participation on the part of governments as well as civil society was reduced. This may be in part due to economic factors. But it may also reflect other factors. Prior to the HDIM, for example, Belarus and Russia dragged out the adoption of an agenda until the last possible moment, making it especially hard for NGOs to plan their participation. In addition, OSCE has, in recent years, scheduled so many human dimension meetings throughout the year that it is difficult for government and non-governmental experts to cover them all. (In addition to the discussion of tolerance and non-discrimination at the HDIM, those issues have been or will be addressed at three different ad hoc meetings, as well as one of the Supplementary Human Dimension Implementation Meetings.) The Lithuanian Chairmanship also scheduled some meetings in Vienna during the HDIM, although the modalities call for all Vienna meetings to be suspended during the HDIM to facilitate participation by the representatives to the OSCE. Similarly, the OSCE Parliamentary Assembly fall meeting overlapped with the final sessions of the HDIM. In fact, the modalities for the OSCE's human dimension activities were a dominant theme during the HDIM's closing session -- presaging the opening of discussions in Vienna on that issue held immediately after the HDIM at the insistence of Belarus. While many governments, including the U.S., believe the way in which the OSCE organizes its human dimension activities could be improved, the discussions themselves risk being held hostage by those countries inimical to the OSCE's human rights work.

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  • Human Rights Play on Magnitsky Murder

    Kyle Parker introduced the briefing, which followed a performance of the play “One Hour Eighteen,” based on the final moments in the life of Russian whistleblower Sergei Magnitsky. After exposing the largest tax fraud in Russian history, Magnitsky was wrongly arrested and tortured in prison. Six months later he became seriously ill and was consistently denied medical attention despite 20 formal requests. On the night of November 16, 2009, he went into critical condition, but instead of being treated in a hospital he was put in an isolation cell, chained to a bed, and beaten by eight prison guards for one hour and eighteen minutes. Sergei Magnitsky was 37 years old and left behind a wife and two children. Those responsible for this crime have yet to be punished and his story has become a global human rights cause and is emblematic of corruption, violence, and impunity in Russia. Parker was joined by Ury Urnov, director of “One Hour Eighteen,”  in discussing the play as an emblematic example of the devastating human cost of corruption and the lack of rule of law in Russia. The play juxtaposed the moving and chilling testimony and documents from Magnitsky's diary; a radio interview with his mother; two judges; a prison doctor and paramedic; an investigator; and a young ambulance paramedic.  

  • U.S. Congressman Pledges to Push for ICC Indictment of Belarusian President Lukashenka

    The chairman of the U.S. Helsinki Commission has pledged to call on the Obama administration to push for the indictment of hard-line Belarusian President Alyaksandr Lukashenka by the International Criminal Court (ICC). While the chances of an indictment are unlikely, the pledge by Representative Chris Smith (Republican, New Jersey) was a clear sign that U.S. lawmakers have not forgotten the egregious human rights situation in the country ruled by the man some dub "Europe's last dictator." At a Helsinki Commission hearing that focused on Minsk's continuing crackdown on political opposition and civil society, Smith said he would send a letter to members of the Obama administration and the UN Security Council asking them to push for the indictment. In an interview with RFE/RL, he later said, "When you commit atrocities for 17 years, as [Lukashenka] has done, the time has come." "[Although] Belarus is not a signatory to the ICC, to the Rome Statute -- and nor are we, frankly -- we've done this before, and we did it with [President Omar al-] Bashir in Sudan. It will take a lot of work, but we need to begin that effort now to get the [UN] Security Council to make a special referral to begin that process," he said. "I'm sure China and Russia will object, but that's worth the fight, because this man commits atrocities on a daily basis against his own people," Smith added. The congressman made his pledge following the testimony of former Belarusian presidential candidate Ales Mikhalevich, who is in Washington for the first time since his release from a detention center in Minsk on February 19. Mikhalevich was one of seven opposition candidates and more than 600 people arrested during the regime's violent crackdown on protesters following Lukashenka's disputed reelection in December 2010. The official reaction to demonstrations drew widespread international condemnation and a coordinated sanctions program by Brussels and Washington. The financial and travel restrictions were accompanied by a boost in funding for the country's beleaguered civil society, journalists, and activists. As the one-year anniversary of the election approaches, watchdogs say the jailing and harassment of human rights defenders and protesters continues, while the independent media and judiciary face intense, often institutionalized, pressure. Mikhalevich says he had to sign agreement on collaborating with the Belarusian state security forces, which are still called the KGB, in order to secure his release. He has since been granted political asylum in the Czech Republic. Ahead of meetings with State Department officials and Washington-based NGOs, he told U.S. lawmakers that supporting Belarusian civil society -- and not holding out hope that Lukashenka will reform -- is the only way to effect change. "I'm absolutely sure that Lukashenka is ready to defend his power by all possible means. Unfortunately, we can compare Lukashenka with [former Libyan leader Muammar] Qaddafi. So I urge the United States, the European Union, and the international community not to trust another game of liberalization badly played by the regime," he said. "Cooperate only with independent civil society in Belarus: nongovernmental organizations, both unregistered and registered, independent newspapers and media, and democratic activists." Analysts say Lukashenka has long employed the tactic of pledging to loosen to grip on the country in exchange for a reprieve from sanctions -- a tactic that has worked in the past. Observers say he has also sought to capitalize on rifts between the United States and the EU, as well as between neighboring Russia and the West, to inhibit united action against his regime. After testifying, Mikhalevich told RFE/RL that he hoped the United States would more fully take on the role of "bad cop" if the EU, which borders Belarus and relies on it as a transit country for gas from Russia, hesitates to do so. "I'm absolutely sure than in order to succeed, the international community should have both the good cop and bad cop. Someone should play the role of the bad cop, and unfortunately, the European Union would not play this role. So I hope that the United States will be ready to do it," Mikhalevich said. Mikhalevich also offered a harrowing account of what he called "constant mental and physical torture" during his two months in custody, including being "stripped naked and forced to assume various positions." "Our legs were pulled apart with ropes and we could feel our ligaments tear," Mikhalevich said in his prepared remarks. Smith appeared visibly moved by account. "Rather than calling them the KGB, it ought to be called the KGB 'P' for 'perverts.' Masked men who strip other men naked, and women, presumably, as well -- those are acts of perversion that should not go unnoticed by the international community," said the Congressman. In July, the U.S. House of Representatives approved a bill sponsored by Smith that would strengthen existing sanctions against Minsk. It is awaiting consideration in the Senate. Smith told RFE/RL that Western attention on the situation in Belarus had been "obscured" to some extent by the events of the Arab Spring, and especially by the global economic downturn. He said that pushing for ICC action would be a sign that human rights are not "taking a back seat." "I've been very much involved for years in the special [UN-backed] court that [U.S. prosecutor] David Crane oversaw for Sierra Leone, and what I learned from that, and from the Rwandan court, and of course from the Yugoslav court, which held [Slobodan] Milosevic and [Ratko] Mladic and [Radovan] Karadzic to account, is that these thugs are frightened by the fact that they may be held to account. And Lukashenka will fear it, I believe, if we make a very serious effort to hold him to account at the International Criminal Court," said Smith. Mikhalevich told RFE/RL that he thinks the chances of ICC action against Lukashenka are slim, but that the prospect of such a move could help pressure the regime to release its political prisoners. "I think that definitely, it's very difficult to organize any [such] political process unless thousands of people are being killed, but still, it's necessary to do all attempts," he said. "And you never know how this regime will develop -- and how many victims we will have next year."

  • From Arab Spring to Coptic Winter: Sectarian Violence and the Struggle for Democratic Transition in Egypt

    On Sunday, October 9, 2011, 25 people were killed and more than 300 injured when the Egyptian military attacked a peaceful group of Coptic Christians protesting the burning of a church in Aswan. In what has been deemed the “Massacre at Maspero,” referring to the location of the demonstration, witnesses say the army fired on the demonstrators with live ammunition and plowed into the crowd with armored vehicles. The military denied the use of live ammunition and claimed that their soldiers were attacked by an armed mob. The military has arrested at least 28 people, almost all Copts, including prominent blogger Alaa Abdel Fattah, and brought them before military prosecutors. The hearing focused on violence perpetrated against the Coptic Christians in Egypt, the implications of the events for that community and the current Egyptian leadership, and prospects for the consolidation of democracy in Egypt.

  • Belarus: The Ongoing Crackdown and Forces for Change

    Nearly one year after the brutal post-December 19, 2010, election crackdown, the human rights picture in Belarus remains bleak. Brave and committed individuals who attempt to promote a democratic future for Belarus continue to be crushed by the dictatorial Lukashenka regime. Civil society continues to be under assault, with NGOs facing ever greater constraints, and freedoms of assembly and expression are severely curtailed. Yet the ongoing economic turmoil has produced growing disaffection, as manifested in Lukashenka’s plummeting popular support, and a changing domestic and international environment. The hearing will focus on the extent and impact of the crackdown on the lives of its victims and on the larger society, and what more can be done by the U.S. and our European partners to promote democratic change in Belarus.

  • Good Governance

    Economic and Environmental Dimension Implementation Meeting Session 3: Good Governance Before I begin, I’d like to thank the panelists today for their excellent and informative presentations. The United States has viewed with keen interest the evolving discussions in recent years on what the OSCE’s priorities should be in the Economic and Environmental Dimension. As our friend and colleague Mr. Svilanovic pointed out during last year’s Vienna Review Conference, we appear to have come to an appreciation that good governance is the key linking theme across the entire second dimension. The Maastricht Strategy is very clear on this point: “Good public and corporate governance and strong institutions are essential foundations for a sound economy, which can attract investments, and thereby enable States to reduce poverty and inequality, to increase social integration and opportunities for all, and to protect the environment. Good governance at all levels contributes to prosperity, stability and security.” As we consider the implementation of our second dimension commitments, however, we should keep in mind why it is important to implement those commitments. The global economic downturn continues to put extreme pressure on people and governments across the OSCE region. To be sure, some countries have weathered the storm better than others. Still, no country can be forever immune to market forces, and even within those that have done well, there are always citizens left behind. This is certainly the case in the United States, and for this reason President Obama is focused intently on how best to put those Americans without a job back to work. We all know that trade and investment are critical drivers of economic growth. Indeed, recognizing this important reality, the Obama Administration has launched the National Export Initiative, which seeks to deepen our strategic trade relationships around the world, recognizing that 85 percent of world GDP growth will occur outside the United States in the coming few years. As we encourage more American businesses – large and small – to embrace international trade, seek opportunities in new markets, and make strategic investments that will lead to increased global trade flows, we are keenly aware of the challenges and costs posed by official corruption, weak institutions, and lack of respect for property rights, including intellectual property. Weak governance and lack of transparency constitute non-tariff barriers to trade, which we have committed ourselves to eliminating. Furthermore, the same issues that deter trade and investment also work against comprehensive security: a lack of transparency in governance leads to diminished confidence that problems and disputes will be addressed in a fair and impartial manner. Without trust and confidence in public institutions, there is little incentive for investors and companies to pursue trade deals or direct investment in those economies. The effect is stagnating economic performance, which, as we have seen in the past several months and years, can lead to political upheaval. The United States Government is deeply committed to fostering good governance and transparency in its political and economic institutions. President Obama has made the global fight against corruption a top priority. As he has noted, “In too many places, the culture of the bribe is a brake on development and prosperity. It discourages entrepreneurship, destroys public trust, and undermines the rule of law while stifling economic growth.” The real world costs of corruption and weak institutions should not be underestimated. The World Bank estimates that more than one trillion dollars in bribes are paid each year out of a global economy of approximately 30 trillion dollars. That's an incredible three percent of the world’s economy. In 2009, companies lost nearly $25 billion to companies willing to pay bribes in deals for which the outcome is known. And bribery is especially costly for small and medium-size enterprises (SMEs): a separate study has shown that up to 25 percent of SME operating capital in companies operating internationally is diverted to corruption. That is a staggering figure that illustrates how corruption diverts scarce resources to thoroughly unproductive ends. Corruption is a global problem that knows no borders. And that’s why corruption demands a truly global response – one that knows no limits on collaboration. The Obama Administration is doing its part to implement its obligations under the OECD Anti-Bribery Convention by enforcing the U.S. Foreign Corrupt Practices Act (FCPA) strictly and fairly. We are determined to ensure that U.S. businesses do not contribute to corruption in foreign markets. At the same time, we are determined to do what we can to assist them in the fight against foreign corruption, and against the high risk and significant costs of corruption in such markets. Regrettably, at this stage, the lack of enforcement of domestic bribery laws, and of foreign bribery laws by many nations that are Parties to the OECD Anti-Bribery Convention is extremely troubling and raises concerns about a lack of political will. Governments can and should prosecute both those who give bribes and those who receive them, both at home and abroad. And the OSCE should continue to encourage participating States to adopt and enforce rigorous anti-bribery regimes. Of course, the fight against corruption is not simply a law enforcement matter; rather it can also be a significant – if not the most significant – non-tariff barrier all companies face. Accordingly, the U.S. Department of Commerce and the International Trade Administration (or ITA) are committed to working with our trading partners to level the playing field and to promote transparent and corruption-free markets globally. Our work to promote clean and ethical business environments occurs at both the multilateral and bilateral level. At the multilateral level, the ITA is pressing its counterparts to lead by example and to implement comprehensive anti-corruption measures. In addition to our work through the OECD, the United States has been working diligently to persuade the G20 countries to adopt a comprehensive anti-corruption action plan, which includes a commitment focused on adoption and robust enforcement of anti-bribery laws, implementation of the UN Convention Against Corruption, greater engagement with the private sector, and support for transparency mechanisms, to name a few. Many of these commitments require our G20 partners to enact and implement new laws and preventive measures. The United States, at ITA’s initiative, in particular, took the lead on proposals relating to the private sector and also on whistleblower protection, within the G20. In the United States, whistleblowers play a crucial role in helping to enforce anti-corruption law. This principle is also embodied in international conventions. Articles 12 and 13 of the UN Convention require States Parties to prevent corruption in the private sector and promote the fight against corruption with the business community and civil society. Unless governments can protect whistleblowers, it is unlikely that they can identify or address systemic causes of corruption. The United States believes robust whistleblower protection should be an essential part of any good governance initiative in the OSCE, and I was encouraged to hear Ambassador O’Leary indicate that this will be an area of focus under the Irish Chairmanship. The U.S. Department of Commerce has also been committed to fostering strong private sector integrity as an integral part of promoting good governance in markets worldwide. Companies are global corporate citizens, and as such, can work collectively and with governments to foster trust, and promote transparency. I hope that some our work may provide a useful model for the OSCE to consider as it looks to embrace good governance and anti-corruption as a priority for the second dimension, a goal we fully support, and which I am personally committed to supporting. For example, the ITA has championed business ethics and corporate governance reform since the early 1990s, following the fall of the Berlin Wall. Our Business Ethics Manual has been translated into Chinese, Spanish and Russian and is still one of the most widely used resources on this important topic. We have partnered with business associations and chambers of commerce to develop collective action and business ethics program in many markets. Our work on business ethics has grown. This past year, the ITA has focused on trying to heighten awareness of good governance, transparency and business ethics in sectors of vital importance to many economies – by taking a “sectoral” approach to combating corruption and promoting good business practice, the challenge of dealing with corruption becomes less daunting. The ethical issues specific to different industries vary greatly – and there is no one-size-fits-all approach to the problem. Within the G20, for example, the United States, at the initiative of the U.S. Department of Commerce, has taken the lead in calling for the G20 to endorse additional sectoral approaches to fighting corruption, beyond the Extractive Industries Transparency Initiative (EITI). We have asked G20 governments, for example, to consider supporting the Construction Sector Transparency Initiative (COST) – a new multistakeholder initiative, developed by the World Bank. COST uses similar approaches to EITI to promote greater transparency in public infrastructure projects and government procurement. I hope that the OSCE might similarly consider COST and other multistakeholder approaches to promoting transparency under the Irish chairmanship. Within APEC, the ITA has focused on developing new ethical principles for key sectors within the APEC region. I am pleased to report that under the APEC SME working group, we have coordinated a project with APEC countries and businesses to develop principles of business ethics in the construction, medical devices and biopharmaceutical sectors. These voluntary principles are meant to be used by businesses and trade associations – large andwithin the OSCE framework and the EEDIM, we might also consider focusing on business ethics in specific sectors of interest to all of our economies. I want to close by suggesting some activities to take the theme of good governance and transparency forward. In addition to encouraging the OSCE to formally endorse the Extractive Industries Transparency Initiative—a move that would send an important signal about this body’s commitment to the principles of good governance and transparency—the U.S. encourages us to explore whether there are additional sectoral initiatives that merit support from the OSCE, including the Construction Sector Transparency Initiative. The United States Government also strongly supports the Irish Chair’s goal to develop a Statement or Declaration of Transparency Principles to help guide our governments in their future activities. I want to encourage us to consider new models of bilateral cooperation to promote good governance such as the model Mr. Murray just discussed, leading to a public-private initiative in the Russian power generation sector. We at the U.S. Department of Commerce are working closely with the Center for Black Sea/Caspian Studies at American University to potentially convene a conference in May of next year that would seek to address the challenge of developing mechanisms to ensure good governance and transparency, while also balancing the goals of protecting national security and accelerating economic development faced by the countries of the Caucasus and Central Asia, as they seek to assert their role as a gateway between Europe and Asia. In addition, the conference will also focus on specific market access challenges to regional integration and economic development in the Caucasus and Central Asia such as transparency in Government procurement and privatization, and trade facilitation challenges, including customs and lack of regional harmonization. It is our hope that the OSCE will join us for this event – focused on critical areas such as transport and infrastructure – to work on tangible ideas for projects and collaborations in the OSCE region. We look forward with great interest to the 20th Economic and Environmental Forum, where we will delve deeper into all the facets of good governance. We also thank the Lithuanian Chairman-in-Office for  ensuring that their draft Ministerial Council decision on Energy Security incorporates transparency in the energy sector – in our view, considering the vital role that energy plays in modern economic life, there can be no confidence, and thus no security, without energy transparency. In the year ahead, we envision an even broader focus on transparency principles across the entire spectrum of economic and environmental activities, and will work with all of our colleagues in the OSCE to make that vision a reality. Thank you, Mr. Moderator.  

  • Commissioner Camuñez's Remarks on Good Governance

    Economic and Environmental Dimension Implementation Meeting Session 3: Good Governance Before I begin, I’d like to thank the panelists today for their excellent and informative presentations. The United States has viewed with keen interest the evolving discussions in recent years on what the OSCE’s priorities should be in the Economic and Environmental Dimension.  As our friend and colleague Mr. Svilanovic pointed out during last year’s Vienna Review Conference, we appear to have come to an appreciation that good governance is the key linking theme across the entire second dimension.  The Maastricht Strategy is very clear on this point: “Good public and corporate governance and strong institutions are essential foundations for a sound economy, which can attract investments, and thereby enable States to reduce poverty and inequality, to increase social integration and opportunities for all, and to protect the environment.  Good governance at all levels contributes to prosperity, stability and security.”  As we consider the implementation of our second dimension commitments, however, we should keep in mind why it is important to implement those commitments. The global economic downturn continues to put extreme pressure on people and governments across the OSCE region.  To be sure, some countries have weathered the storm better than others.  Still, no country can be forever immune to market forces, and even within those that have done well, there are always citizens left behind.  This is certainly the case in the United States, and for this reason President Obama is focused intently on how best to put those Americans without a job back to work.  We all know that trade and investment are critical drivers of economic growth.  Indeed, recognizing this important reality, the Obama Administration has launched the National Export Initiative, which seeks to deepen our strategic trade relationships around the world, recognizing that 85 percent of world GDP growth will occur outside the United States in the coming few years.  As we encourage more American businesses – large and small – to embrace international trade, seek opportunities in new markets, and make strategic investments that will lead to increased global trade flows, we are keenly aware of the challenges and costs posed by official corruption, weak institutions, and lack of respect for property rights, including intellectual property. Weak governance and lack of transparency constitute non-tariff barriers to trade, which we have committed ourselves to eliminating.  Furthermore, the same issues that deter trade and investment also work against comprehensive security: a lack of transparency in governance leads to diminished confidence that problems and disputes will be addressed in a fair and impartial manner.  Without trust and confidence in public institutions, there is little incentive for investors and companies to pursue trade deals or direct investment in those economies.  The effect is stagnating economic performance, which, as we have seen in the past several months and years, can lead to political upheaval.    The United States Government is deeply committed to fostering good governance and transparency in its political and economic institutions.  President Obama has made the global fight against corruption a top priority.  As he has noted, “In too many places, the culture of the bribe is a brake on development and prosperity.  It discourages entrepreneurship, destroys public trust, and undermines the rule of law while stifling economic growth.”    The real world costs of corruption and weak institutions should not be underestimated.  The World Bank estimates that more than one trillion dollars in bribes are paid each year out of a global economy of approximately 30 trillion dollars.  That's an incredible three percent of the world’s economy.   In 2009, companies lost nearly $25 billion to companies willing to pay bribes in deals for which the outcome is known.  And bribery is especially costly for small and medium-size enterprises (SMEs): a separate study has shown that up to 25 percent of SME operating capital in companies operating internationally is diverted to corruption.  That is a staggering figure that illustrates how corruption diverts scarce resources to thoroughly unproductive ends. Corruption is a global problem that knows no borders.  And that’s why corruption demands a truly global response – one that knows no limits on collaboration.  The Obama Administration is doing its part to implement its obligations under the OECD Anti-Bribery Convention by enforcing the U.S. Foreign Corrupt Practices Act (FCPA) strictly and fairly.  We are determined to ensure that U.S. businesses do not contribute to corruption in foreign markets.  At the same time, we are determined to do what we can to assist them in the fight against foreign corruption, and against the high risk and significant costs of corruption in such markets.   Regrettably, at this stage, the lack of enforcement of domestic bribery laws, and of foreign bribery laws by many nations that are Parties to the OECD Anti-Bribery Convention is extremely troubling and raises concerns about a lack of political will.  Governments can and should prosecute both those who give bribes and those who receive them, both at home and abroad.  And the OSCE should continue to encourage participating States to adopt and enforce rigorous anti-bribery regimes. Of course, the fight against corruption is not simply a law enforcement matter; rather it can also be a significant – if not the most significant – non-tariff barrier all companies face.  Accordingly, the U.S. Department of Commerce and the International Trade Administration (or ITA) are committed to working with our trading partners to level the playing field and to promote transparent and corruption-free markets globally.  Our work to promote clean and ethical business environments occurs at both the multilateral and bilateral level.  At the multilateral level, the ITA is pressing its counterparts to lead by example and to implement comprehensive anti-corruption measures.   In addition to our work through the OECD, the United States has been working diligently to persuade the G20 countries to adopt a comprehensive anti-corruption action plan, which includes a commitment focused on adoption and robust enforcement of anti-bribery laws, implementation of the UN Convention Against Corruption, greater engagement with the private sector, and support for transparency mechanisms, to name a few.  Many of these commitments require our G20 partners to enact and implement new laws and preventive measures.   The United States, at ITA’s initiative, in particular, took the lead on proposals relating to the private sector and also on whistleblower protection, within the G20.  In the United States, whistleblowers play a crucial role in helping to enforce anti-corruption law.  This principle is also embodied in international conventions.  Articles 12 and 13 of the UN Convention require States Parties to prevent corruption in the private sector and promote the fight against corruption with the business community and civil society.  Unless governments can protect whistleblowers, it is unlikely that they can identify or address systemic causes of corruption.  The United States believes robust whistleblower protection should be an essential part of any good governance initiative in the OSCE, and I was encouraged to hear Ambassador O’Leary indicate that this will be an area of focus under the Irish Chairmanship.   The U.S. Department of Commerce has also been committed to fostering strong private sector integrity as an integral part of promoting good governance in markets worldwide.  Companies are global corporate citizens, and as such, can work collectively and with governments to foster trust, and promote transparency.  I hope that some our work may provide a useful model for the OSCE to consider as it looks to embrace good governance and anti-corruption as a priority for the second dimension, a goal we fully support, and which I am personally committed to supporting. For example, the ITA has championed business ethics and corporate governance reform since the early 1990s, following the fall of the Berlin Wall.  Our Business Ethics Manual has been translated into Chinese, Spanish and Russian and is still one of the most widely used resources on this important topic.  We have partnered with business associations and chambers of commerce to develop collective action and business ethics program in many markets.   Our work on business ethics has grown.  This past year, the ITA has focused on trying to heighten awareness of good governance, transparency and business ethics in sectors of vital importance to many economies – by taking a “sectoral” approach to combating corruption and promoting good business practice, the challenge of dealing with corruption becomes less daunting.  The ethical issues specific to different industries vary greatly – and there is no one-size-fits-all approach to the problem.  Within the G20, for example, the United States, at the initiative of the U.S. Department of Commerce, has taken the lead in calling for the G20 to endorse additional sectoral approaches to fighting corruption, beyond the Extractive Industries Transparency Initiative (EITI).  We have asked G20 governments, for example, to consider supporting the Construction Sector Transparency Initiative (COST) – a new multistakeholder initiative, developed by the World Bank.  COST uses similar approaches to EITI to promote greater transparency in public infrastructure projects and government procurement.  I hope that the OSCE might similarly consider COST and other multistakeholder approaches to promoting transparency under the Irish chairmanship.     Within APEC, the ITA has focused on developing new ethical principles for key sectors within the APEC region.  I am pleased to report that under the APEC SME working group, we have coordinated a project with APEC countries and businesses to develop principles of business ethics in the construction, medical devices and biopharmaceutical sectors.  These voluntary principles are meant to be used by businesses and trade associations – large and small – to guide their ethical interactions with public officials and institutions.   I hope that within the OSCE framework and the EEDIM, we might also consider focusing on business ethics in specific sectors of interest to all of our economies.  I want to close by suggesting some activities to take the theme of good governance and transparency forward.  In addition to encouraging the OSCE to formally endorse the Extractive Industries Transparency Initiative—a move that would send an important signal about this body’s commitment to the principles of good governance and transparency—the U.S. encourages us to explore whether there are additional sectoral initiatives that merit support from the OSCE, including the Construction Sector Transparency Initiative.  The United States Government also strongly supports the Irish Chair’s goal to develop a Statement or Declaration of Transparency Principles to help guide our governments in their future activities. I want to encourage us to consider new models of bilateral cooperation to promote good governance such as the model Mr. Murray just discussed, leading to a public-private initiative in the Russian power generation sector.   We at the U.S. Department of Commerce are working closely with the Center for Black Sea/Caspian Studies at American University to potentially convene a conference in May of next year that would seek to address the challenge of developing mechanisms to ensure good governance and transparency, while also balancing the goals of protecting national security and accelerating economic development faced by the countries of the Caucasus and Central Asia, as they seek to assert their role as a gateway between Europe and Asia.  In addition, the conference will also focus on specific market access challenges to regional integration and economic development in the Caucasus and Central Asia such as transparency in Government procurement and privatization, and trade facilitation challenges, including customs and lack of regional harmonization.  It is our hope that the OSCE will join us for this event – focused on critical areas such as transport and infrastructure – to work on tangible ideas for projects and collaborations in the OSCE region. We look forward with great interest to the 20th Economic and Environmental Forum, where we will delve deeper into all the facets of good governance.  We also thank the Lithuanian Chairman-in-Office for ensuring that their draft Ministerial Council decision on Energy Security incorporates transparency in the energy sector – in our view, considering the vital role that energy plays in modern economic life, there can be no confidence, and thus no security, without energy transparency.  In the year ahead, we envision an even broader focus on transparency principles across the entire spectrum of economic and environmental activities, and will work with all of our colleagues in the OSCE to make that vision a reality. Thank you, Mr. Moderator.

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