Asian Infrastructure Investment Bank

United Nations highlights ‘One Belt, One Road’ crime risks

United Nations Office on Drugs and Crime says Beijing’s initiative and its investment bank could be exploited; AIIB spokesman plays down risk

PUBLISHED : Sunday, 28 February, 2016, 1:08am
UPDATED : Sunday, 28 February, 2016, 2:25am

China’s flagship international economic and trade policies, key initiatives backed and promoted by Hong Kong, are susceptible to cross-border organised crime, a newly released United Nations report has warned.

President Xi Jinping’s “One Belt, One Road” strategic initiative and the Asian Infrastructure and Investment Bank (AIIB) are among new economic and development opportunities that presented “significant security challenges” to the region because they lacked adequate “safeguards” to prevent cross-border criminality.

The UN office on Drugs and Crime (UNODC) report said countries were geared towards the trade and integration agenda but law-enforcement protection agenda was lacking to prevent cross-border criminal activity.

The AIIB defended itself against accusations stating it would “not knowingly” finance questionable projects.

A conservative estimate of organised criminal revenues in East Asia and the Pacific is US$100 billion - surpassing the GDP of several states in that region, including Lao PDR, Cambodia and Myanmar combined.

READ MORE: Trade along China’s ‘One Belt, One Road’ won’t succeed without the currency of trust

“Intensifying inter-regional connections have already exacerbated threats to ASEAN members, such as drug trafficking and wildlife trafficking,” the UN said, citing One Belt, One Road, which spans two continents and connects 60 countries of 4.4 billion people.

Concerns about the AIIB emerged since “it is still uncertain what the Chinese government will include as the standards and principles for social and environmental protection. There is also little mention so far of safeguards around opportunities for organised crime that arise from infrastructure investments.”

The development bank’s spokesman Henry Bell said the AIIB provided a “comprehensive approach to the management of environmental and social risks and impacts.” However, gave little mention about specific concerns to organised crime.

Underpinning the bank’s work, it will “not knowingly finance” projects that would involve child labour, trading in illegal wildlife such as ivory, trade or production in weapons and munitions or related to gambling and casinos.

Hong Kong is a maritime hub along the so-called 21st century Silk Road belt and is making efforts to be a key player in the China-led bank.

However, pro-Beijing legislator and the SAR’s former Security minister Regina Ip Lau Suk-yee, who gave a keynote speech at a Belt and Road conference on Saturday afternoon at the Conrad Hotel, in Admiralty, to drum up support for the initiative, accepted “perennial” risk could stem from enhanced economic opportunities.

“These risks are perennial problems when you have greater free flow of capital and trade - there are bound to be abuses. I think participants of the Belt and Road initiative will have to work together to stop these problems,” she told the Sunday Morning Post.

Despite the security and crime threat, Ip said the initiative was “very important” for Hong Kong’s long-term economic development because the belt and road will ultimately change the pattern of trade and logistics, and economic development in the whole region.

READ MORE: Laying the foundations for China’s ‘One Belt, One Road’

Among the more than 60 countries along the ‘belt and road’, only Singapore featured as the least corrupt in the top 20 of Transparency International’s corruption perception index that monitors 168 counties.

Jeremy Douglas, the regional representative for the UNODC based in Bangkok, said the AIIB didn’t need to be “in any way defending” its polices.

“Development banks in general, they do not have security safeguards,” Douglas said. “The traditional safeguards of social and environmental impacts...but they have not thought through implications of transnational security threats and crime.”

However, Douglas said he was confident the China-led bank would scrutinise whatever it was financing.