ANNUAL REPORT 2017 1

SPOTLIGHT ON ANNUAL CORRUPTION REPORT 2017 2

CONTENTS

WHY CORRUPTION? 4

WHAT IS CORRUPTION? 4 The ‘corruption life-cycle’ 5 MISHA GLENNY FOREWORD 6

CEO FOREWORD 8

FOUNDER’S INTRODUCTION 9

WHERE WE WORK 10 VISION We want a better world – where corruption is challenged and accountability prevails, all can thrive EXPOSING SHELL AND ENI’S CORRUPT DEAL IN NIGERIA 12 How we exposed Shell and Eni 12 within the planet’s boundaries, and governments act Spotlight on: Shady handshakes in the oil sector 14 in the public interest. We need to keep fighting 14 MISSION Many of the world’s worst environmental DRUG CARTEL MONEY AT THE TRUMP OCEAN CLUB PANAMA 15 and human rights abuses are driven by the exploitation This is what we found… 15 of natural resources and corruption in the global, Trademark Trump 15 political and economic system. Global Witness is How we joined the dots 17 Spotlight on: Anonymous companies 17 campaigning to end this. We carry out hard-hitting Laundering money through real estate: A beginner’s guide 18 investigations, expose the facts and push for change. Gatekeepers to the international financial system 18 We are independent, not-for-profit and work with Is the tide turning on anonymity? 18 partners around the world in our fight for justice. TACKLING THE RESOURCE CURSE 19 VALUES Courage and tenacity for justice. Stripping Papua New Guinea of its tropical rainforest 20 Wildlife in decline 21 Spotlight on: Natural resources and transparency 21

ENVIRONMENTAL DEFENDERS 23 Spotlight on: Honduras - the most dangerous place to be an environmental defender 24 Who is behind the murders? 25

SPOTLIGHT ON 2018 26

THANK YOU TO ALL OF OUR SUPPORTERS 28

INCOME AND EXPENDITURE STATEMENT 30 4 ANNUAL REPORT 2017 5

Corruptly acquire ownership of land, oil blocks and mining licenses

Pay bribes to gain influence and in turn receive access to lucrative contracts and deals for yourself, friends and family STEAL

Enjoy your luxury WHY WHAT IS Use gatekeepers like lifestyle and buy bankers, accountants yourself a new

CORRUPTION? CORRUPTION? S and lawyers to hide mansion your assets so they P cannot be traced E back to you Global Witness protects human rights and We don’t just see corruption as a series of E the environment by fearlessly confronting separate crimes – fraud, bribery, money N D corruption and challenging the systems that laundering. Instead, we define it as the broken I D H Trusts and anonymous enable it. global systems that enable a handful of the companies will further criminal and corrupt to benefit whilst millions hide your identity so it When we were created in 1993 we were pioneers lose out. Buy yourself is very difficult to find in seeing the link between natural resources, and your family ? out who you are conflict and corruption. 25 years on and our At Global Witness, we believe: citizenship to investigations now determinedly focus on who another country When someone is murdered defending their is stealing the money, where they are hiding it, home because big business wants their land – and how they are spending it. We throw grit in this is corruption. the system by tracking and exposing the path of corruption, confronting the systems that enable When people struggle for shelter while empty The ‘corruption life-cycle’ it and pushing for global change to end it. mansions are used to launder money – this is corruption. In the face of climate change, misuse of power Over time, we have witnessed a distinctive, Then the money gets spent. Some of this and increasing disregard for human rights, this When a child breathes polluted air because coal systemic pattern we call the ‘corruption might have to be ploughed back into paying work has never been more urgent. And we have companies and politicians put profits before life-cycle:’ STEAL, HIDE, SPEND. for protection at home, or for rigging elections never been more determined. people – this is corruption. to maintain power and influence. The rest is First, money is stolen. A politician might award Corruption has a deep-rooted impact across funnelled into the international offshore system themselves a lucrative oil concession, passing societies and is at the centre of much of the so it can be spent and enjoyed freely by the profits to a shell company they secretly own, destruction of people and planet. corrupt politician or criminal that stole it. bribes may be paid for political favours, or criminal gangs could receive huge payments It’s this ability to move, hide and spend for the movement of drugs, illegal goods or money elsewhere that makes corruption trafficked people. possible and attractive.

Next the money is hidden offshore. Typically This life-cycle doesn’t just apply to the actions a lawyer would be employed to create a series of of kleptocrats and dictators from resource rich shell companies which would be used to set up countries. It is also the modus operandi of a bank account somewhere reputable where organised crime groups and terrorists from all the corrupt might like to live, such as the UK over the world. Our work has shown again and or the US. again how the services offered by financial centres like the UK and US don’t just facilitate globalised corruption - they are at the epicentre of it. 6 ANNUAL REPORT 2017 7

“The thoroughness of their work has led them to become an especially “I feel immense pride to be associated sharp and penetrating with this organisation as it becomes thorn in the side of the powerful elites who profit one of the most effective NGOs that from a broken system.” I have encountered.” Misha Glenny I first became aware of Global Witness expand the expertise it could in the early years of this century when draw on. I often feel that I gain more I was beginning the research for my book, being on the Global Witness Board and McMafia, a study of the globalization of organised seeing its work, than Global Witness gains from crime. When I first met Global Witness’ three founding me. Nonetheless, that does not prevent me from Misha Glenny and McMafia A primary aim of Global Witness and partners, Patrick Alley, Charmian Gooch and Simon feeling immense pride to be associated with this star James Norton join Global Taylor, I was taken aback by their cheerfulness and organisation as it becomes one of the most effective Witness for an anti-corruption MISHA similar organisations is to defend those parliamentary briefing, January who are trying against the odds to enthusiasm. They described with typical modesty NGOs that I have encountered. 2018. © Simon Rawles defend their communities by successfully about how they had put their lives on the line in order GLENNY And this is really where Global Witness’ added value pulling the rug from under them. From an to bring gross abuses of human rights in Cambodia lies. It forces change. It provides civil servants and early stage, they adapted technological and West Africa as though it were the most natural FOREWORD politicians with the information, always hard won, advance into tools that expose corruption. thing in the world. As I started to read more and Global Witness has been at the forefront that demonstrates how large energy companies To equal effect, they have forged more Global Witness reports, I was impressed by of a growing movement that not such as Shell and ENI have engaged in egregious cooperative relationships with media the extraordinary thoroughness and diligence of only highlights large-scale crime and corrupt practices in Nigeria. Thanks to Global Witness partners like the Guardian to keep the their work. For a journalist, seeing an NGO take corruption but also campaigns tireless the case for transparency in this industry is now brutal murder of land defenders in documentation and verifiable witness testimony so to actually change the structures that overwhelming. Equally in the United Kingdom, we the headlines. seriously was especially heartening. Not only was facilitate such criminal activity. Since I able to understand how the despicable trade in need to bring to an end the practice of allowing its foundation more than two decades Perhaps most striking is their ability blood diamonds actually worked, it enabled me to anonymous companies, whose beneficial owners ago, it has consistently punched above to process the results of the incredibly investigate the trade fully prepared. Since those days, remain entirely hidden, to buy property in our already its weight. Its unique character lies in dangerous and stressful work they do overheated capital. In this respect, I was absolutely its strategy of piecing together the links in the most violent if unseen parts of Global Witness has been an thrilled that the fictional TV series based on McMafia between natural resource exploitation, the world to then effect change in the essential tool not only for me but has again brought the issue front and centre in human rights violations and corruption. western bastions where the natural for dozens of other investigative Britain’s parliament – the change is coming even if it’s Global Witness reveals and then dissects slower than most of us might like. resources end up as processed product. journalists that I know and work all aspects of criminal corruption along Whether blood diamonds from Africa, I will continue to support Global Witness in the supply chain – from the illegal Cambodian timber, Nigerian oil and any with around the world. whatever way I can. And I urge everyone to extraction of resources, almost always a number of the rich mineral resources of get behind them, as they make a real difference. violent affair, through their export and the Democratic Republic of the Congo, When asked to join the International Advisory processing before the goods are secreted Global Witness has opened the eyes of board of Global Witness, I did not hesitate. As the into ‘licit’ markets. The thoroughness of countless western citizens, law makers, organisation was growing quickly, Patrick, Charmian their work has led them to become an lawyers, journalists to the essential role and Simon understood that Global Witness needed to especially sharp and penetrating thorn in which western institutions play in global the side of the powerful elites who profit criminal markets. from a broken system. 8 ANNUAL REPORT 2017 9

headline ‘Descent into outright CEO dictatorship’. Shortly thereafter, FOUNDER’S Daphne Caruana Galizia, an FOREWORD investigative journalist described INTRODUCTION as a ‘one woman WikiLeaks’, was killed by a car bomb in Malta. Her work complemented many of our Global Witness When I reflect on the huge social founders, from left, and political challenges the campaigns, and included exposing Patrick Alley, Charmian shady secret deals uncovered in Gooch and Simon world has faced this year, the Taylor receiving the achievements of Global Witness the Panama Papers and employed Skoll Award for Social by politicians to hide illicit wealth Entrepreneurship, and the ground work we’ve 2014. © Photo courtesy laid for 2018 seem all the more behind secret companies. We will of Skoll Foundation remarkable. None of this would always stand in solidarity with have been possible without the those who face repression and support of those who believe that violence when seeking to uncover Gillian Galdwell, CEO, at the Skoll World Forum. © Stuart Ramson meaningful and lasting change the truth, and continue to speak is possible. out against attempts to silence their voices. This year, of a new law requiring 2017 has been a year of stark amongst many other EU importers of four contrasts. Global Witness has vital achievements, “I am constantly minerals linked to published some of its biggest and we have: violent conflict reminded that our most important investigations and human > strategic, tenacious and to date. Our work has led to Revealed rights abuses hardworking team and our substantial improvements in the how President round the world allies around the world can management of natural resources Trump made to commit deliver victories against around the world and contributed millions from to having full to a real step change in holding selling his even the most formidable knowledge of major irresponsible corporations name to a luxury of opponents.” their supply chain responsible for the environmental development used and dealing with any We set up Global Witness in 1993 because we had was fuelling conflict, embedding inequality and and human rights abuses inflicted to launder money risks associated with it. become aware of a lucrative timber trade between destroying the environment. We wanted to take in their own operations, or their from Latin American drugs Cambodia’s genocidal Khmer Rouge rebels and action to change that. supply chains. cartels. We are facing some uphill battles in our shared quest to Thailand. We recognised the critical link between > And that was the start of Global Witness, which However, we’ve also seen the Exposed how oil giant Shell tackle injustice and drive a more the exploitation of natural resources, conflict and quickly established itself as a new kind of spectre of corruption loom large knowingly entered into a billion sustainable future, but I am corruption this exemplified - no other organisation campaigning organisation: Fearless in uncovering the over the White House in the United dollar corruption scandal in constantly reminded that our was working on this nexus. truth, exposing those involved, and driving change States, with scandal after scandal Nigeria, which played a significant strategic, tenacious and hard- Armed simply with our own research and a on a world-wide scale. Global Witness was one of the emerging regarding the actions role in triggering one of the largest working team and our allies homemade, secret pinhole camera carefully stitched pioneers of the global anti-corruption movement. of President Trump and corporate corruption trials in around the world can deliver into the lining of a bag, we went undercover along the his associates. history now underway in Italy. victories against even the most Thai-Cambodia border. We pretended to be timber Now, two decades and many more amazing staff > formidable of opponents. and campaigns later – including alerting the world Elsewhere in the world brutality Continued tracking the killings buyers whilst also secretly filming and meticulously to the problem of blood diamonds funding war and and violence continue to be of earth and land rights defenders, As the Dalai Lama once said, documenting the hard evidence which exposed the taking on some of the world’s biggest companies rife against those who call out revealing that 2016 was the “If you think you are too small to illegal timber trade, discovering that it generated like Shell and Glencore – we remain as committed as corruption and defend the deadliest year on record with make a difference, try sleeping $10-20 million a month for the Khmer Rouge. ever to our cause. And, although our methods are planet’s precious resources. Again 197 deaths recorded globally. with a mosquito”. We could hide We published the information and our advocacy far more high tech than they were twenty years and again we’ve seen attempts our head under the covers and In 2017 we also expanded, forced policy-makers to take action; the Thai- ago, we retain the same relentless belief that a to shut down civil society and wait until we think it’s safe to get opening an office in Brussels. Cambodia border closed, cutting off the Khmer better, more equitable, and more peaceful world is silence the voices of those out, but we won’t. And we don’t. While this permanent presence Rouge’s prime funding source of around $90 million possible if we can tackle unsustainable predatory seeking to hold guilty individuals, may be new for Global Witness, a year, ultimately helping to end the brutal environmental exploitation and the root causes companies and governments to Thank you so much for your we’ve been lobbying for change Cambodian civil war. What we had also discovered of corruption. account. This was epitomised by support, which is needed now across a number of campaigns as never before. was that corruption in the natural resource sector the closure of the independent within the EU for many years. Cambodia Daily whose final This year, much of that work bore Onwards! edition was emblazoned with the fruit, including the introduction EU After years of 10 campaigning, new laws ANNUAL REPORT 2017 11 were passed legislating for more responsible mineral sourcing and disclosure of MEKONG / CHINA beneficial ownership. We helped launch new Chinese industry guideline Global Witness has a for the natural rubber sector new Brussels office. WHERE WE WORK to prevent land grabs. See p. 22

MYANMAR Our new film exposed how jade is linked to deadly armed conflict US EQUATORIAL in Myanmar. We continue GUINEA to campaign for anti-corruption Our long term measures and in November, investigations helped we testified on the urgent French courts find the need for beneficial ownership son of the dictator legislation. See p. 14 guilty of corruption and embezzlement.

UK

EU CAMBODIA HONDURAS NIGERIA We called for We worked with US We exposed that Shell AFGHANISTAN international sanctions The Guardian to keep knew their $1.3bn oil CHINA in the face of civil the horrific murder of BERMUDA deal was corrupt. society shutdown. land defenders in the See p. 12 See p. 8 public eye. See p. 24 MYANMAR BRITISH CENTRAL CAYMAN PANAMA VIRGIN AFRICAN ISLANDS ISLANDS REPUBLIC We exposed how the HONDURAS NIGERIA CAMBODIA SOUTH PHILIPPINES PAPUA NEW Trump family profited GUINEA from the drug cartels of PANAMA SUDAN MALAYSIA PAPUA NEW We exposed the South America. LIBERIA UGANDA devastating impact the See p. 15 GUINEA DEMOCRATIC illegal timber trade is having PERU REPUBLIC OF on the world’s second BRAZIL CONGO largest rainforest. See p. 20 PERU Our undercover ZIMBABWE investigation exposed the scale of the illegal timber trade. See p. 22 SOUTH DEMOCRATIC AFRICA REPUBLIC OF CONGO ZIMBABWE UGANDA We revealed how a toxic & CENTRAL We investigated combination of corruption and SOUTH AFRICA & LIBERIA AFRICAN REPUBLIC the corruption and mismanagement meant millions mismanagement rife in the Our long term investigations We launched two investigations in mining revenue failed to reach mining sector; human rights helped bring those revealing how diamonds the treasury. On p. 19 we explain abuse is on a grand scale and responsible for aiding associated with human rights how a scandal hit friend of the half the world’s remaining and abetting war crimes abuse are still finding their way president made millions with the mountain gorillas to justice. See p. 22 onto the global markets. help of commodities are at risk. giant Glencore. 12 ANNUAL REPORT 2017 13

Nigeria, Africa’s most populous nation, produces over 1.5million barrels of oil a day but corruption helps explain why a third of its citizens live without running water or electricity.

“It’s one of the biggest corruption scandals in the

history of the oil sector, whole deal was deeply corrupt. We and we were finally able to exposed leaked emails that confirmed

expose what Shell knew.” Shell knew the money from the Shell CEO Ben van Beurden referred to emails implicating Shell in a vast bribery Barnaby Pace, Global Witness deal would be diverted to private scheme that robbed Nigeria of life-saving funds as “pub talk”. Credit: Alamy hands. Yet they went ahead with it investigator. anyway. Furthermore, the emails Emails exchanged between senior Shell staff show they knew its massive payment confirmed some of Shell’s most senior would go to convicted money launderer and former oil minister Dan Etete. executives knew money from the deal would go to a vast bribery scheme involving payoffs to, among others, Shell, Eni and 13 individuals are currently facing trial in this Italian courthouse charged with aggravated international corruption. © Global Witness Goodluck Jonathan, the then Nigerian President. This didn’t stop them. Shell Six years of undercover investigations, continue to deny that they’ve done EXPOSING anything illegal, and even claim their building trust with whistleblowers, actions around the OPL deal were SHELL AND ENI’S leaked emails, criminal investigations ‘morally ok.’ in multiple countries, police raids, CORRUPT DEAL Within 24 hours of our exposé, Shell a corporate U-turn, and millions of had done a U-turn and admitted they IN NIGERIA dollars returned to its rightful owners… did know where the money was going all along.

These are just some of the effects it didn’t. So we set about finding The amount paid for the oil block Following our investigations, Shell of our work to expose Shell, the out where it went, and how. was more than Nigeria’s entire and some of its most senior officials world’s seventh biggest company. 2017 health budget and one and are standing trial, alongside senior We showed they were a knowing a half times what the UN said was managers at Italian oil giant, Eni, participant in a vast bribery How we exposed needed to respond to the 2017 in one of the biggest corporate scheme for one of Africa’s most Shell and Eni famine. Dan Etete used his share corruption cases in history. In separate legal proceedings related to this valuable oil blocks - and now After a lengthy investigation, of the money to buy a private jet, former senior executives face jail armoured cars and shotguns. case, £85m has been returned to the Global Witness tracked down Nigerian people from frozen assets in in one of the largest corruption documents showing that this trials in history. For six years, Shell claimed it only the UK. We’re supporting the Nigerian vast sum of money for the rights paid the Nigerian government people in their efforts to reclaim In 2011 a murky deal worth to exploit the country’s natural and insisted it did nothing additional lost state money. $1.3bn took place for the lucrative resources was paid to a convicted wrong. We didn’t believe them Nigerian oil block, known as OPL money launderer and former oil and conducted a painstaking Our findings from this case have 245. This money should have gone minister, Dan Etete, who awarded fact-finding mission to reveal the been used to develop and implement back to benefit Nigerian people himself ownership of the oil block truth. Finally, in the summer of transparency laws around the world and the state purse, but $1.1bn of via a company he secretly owned. 2017, we were able to reveal the that could detect and deter similar deals in the future. 14 ANNUAL REPORT 2017 15

Question: What links real estate, drug cartels DRUG CARTEL in Central America, the head of a bankrupt MONEY AT THE business and the US government? TRUMP OCEAN Answer: Donald Trump, as revealed in our 2017 report Narco-a-Lago, we investigated and CLUB PANAMA scrutinised the link between the president, real estate and Colombian drug cartels.

This is what we found… the development and he and his family have made In the early 2000s, a series millions of dollars more from of bankruptcies meant management fees. businessman Donald J. Trump was shunned by most lenders. Struggling for credit, he started Trademark Trump selling his name to high-end Untraceable funds, bankruptcies A mother feeds her malnourished child at a feeding centre in real estate projects. One such Maiduguri, Nigeria. The amount paid for the oil block is one and and laundered cash are all SPOTLIGHT a half times what he UN says was needed to respond to the 2017 development was the Trump trademarks for some Trump- ON famine crisis – but the money was diverted into private pockets. Ocean Club International Hotel Photo: REX/Shutterstock branded real estate ...SHADY HANDSHAKES IN and Tower in Panama (TOC). It projects. Yet he has THE OIL SECTOR was here that Trump and his incessantly promoted R Every year, oil and mining companies pay hundreds of We need to keep fighting children went all out marketing, himself as a successful billions of dollars to governments across the world in managing and helping with the and viable businessman, exchange for access to natural resources. These vast But despite this global trend towards design of the venture. It is also an image critical in the 2016 public revenues should be used to benefit people and transparency, oil companies like Shell here that proceeds from the presidential election. But this communities in resource-dependent countries. But all too and Exxon are still fighting to keep their cartels’ narcotics trafficking were façade was built, at least in often the money disappears as oil and mining deals are extractive deals secret. Earlier this year, laundered and where President part, on real estate ventures done behind closed doors, allowing corrupt elites to line well-paid lobbyists won a big victory when Trump became a major with his name which were used their own pockets at the expense of ordinary citizens. the US voted to overturn anti-corruption beneficiary of the profitable by criminals to launder cash rules that required extractive companies venture. While he may not have generated by illicit and corrupt Global Witness has long campaigned for laws requiring to disclose their payments to foreign deliberately set out to permit activities. oil companies to disclose payments to governments governments. So while the rest of the criminal activity at the TOC, on a project-level basis. This would help to prevent world moves toward greater transparency Donald Trump certainly did little Trump’s unscrupulous business companies and corrupt individuals within them and accountability for oil and mining or nothing to prevent it. dealings and blindness to from scheming with greedy government officials, or revenues, the US is turning back the clock. potential illegality raise serious accepting kickbacks to get rich at the expense of At the time, Panama was known questions about both his ordinary people. Infuriatingly, if the US had the as one of the best places in suitability to govern the most anti-corruption legislation in place the world to launder money. powerful country in the world Thanks to sustained campaign pressure from Global when Shell was involved in the OPL 245 Whole neighbourhoods in and his commitment to tackle Witness and our partners in the Publish What You scandal, it’s highly unlikely the deal Panama City were taken over crime and corruption. Pay coalition, the tide has started to turn towards would have taken place at all. by organised crime groups, and transparency. Laws in the EU and Canada now require luxury developments were built Trump got elected by repeatedly extractive companies to publish details of the payments to serve as money laundering pledging to ‘drain the swamp’, they make to governments across the world. As a result, vehicles. but since his inauguration he has companies have disclosed over $400 billion worth of actually taken steps that could payments at project level over the past three years. The In the case of the TOC, accepting worsen corruption in the US and Extractive Industries Transparency Initiative (EITI), which easy – and possibly dirty – internationally, including rolling operates in 51 countries across the world, has also made money early on would have been back transparency laws (see breakthrough transparency commitments on project- in Trump’s interest. He got a cut opposite page for details). level payment disclosure, and on beneficial ownership to on the sale of every unit at ensure the identity of company owners are made public. The Trump Organization worked to promote the project and in this marketing brochure for the TOC Trump himself boasted: “I am proud to develop this extraordinary high rise.” © Trump Ocean Club 16 ANNUAL REPORT 2017 17

SPOTLIGHT How we joined the dots ON Data analysis is an increasingly important means ...ANONYMOUS COMPANIES through which we expose corruption. It was one of The current financial system makes it simple to our key techniques during our investigations into hide and move suspect funds around the world. dealings at the TOC and involved sifting through The criminal and corrupt, helped by legitimate large volumes of public data in order to identify lawyers, accountants and estate agents, can some of the key individuals who were involved in quickly and easily set up layer upon layer of selling condominiums there. anonymously-owned companies, crossing borders and jurisdictions and making it almost impossible By deploying the right technologies and techniques, for law enforcement to track down the real human we were able to make the investigative process behind the money. Corrupt politicians, tax evaders, smarter, cleaner and more efficient. Tasks that may terrorists, drug gangs, fraudsters and other have taken a team of researchers months before, we criminals are all able to cover their tracks in were able to complete in a matter of days. this way. First, we built computer programmes that One of the most effective ways for these criminals automatically extracted relevant data from public to hide and spend laundered money is by moving it registers of companies and records of property into the legitimate financial system by investing in purchases. Then, we used additional software to luxury properties. visually map this data so that we could identify connections between specific companies, property Criminals register companies in secret jurisdictions. Trump championed the Trump SoHo development with his daughter Ivanka and son Donald Jr. © Rex/Shutterstock deals and individuals. The identity of the real owners can remain a mystery and the anonymous companies can The database of companies, individuals and be used to buy properties in some of the most property deals we built enabled us to quantify how expensive cities in the world. No one knows the central specific people of interest were to selling identity of the properties’ owners – or whether the property at the TOC. In addition, the visual interface money used is from a legitimate source. for the database allowed us to share interactive visualisations of the network we had developed in the Our advocacy calls for governments to create public course of the investigation when we came to publish. registries of the real owners of companies and those accused of kidnapping, money laundering trusts, so that law enforcement, businesses, NGOs and a suspected people smuggler who was later Every step that we took extracting, cleaning and and ordinary citizens know who they’re dealing convicted of forging travel documents. Three years analysing this data was written out in plain non- with. We are also campaigning for registers of later, Nogueira himself was arrested by Panamanian technical English so that we developed a record of property ownership to prevent this being used as authorities on charges of fraud and forgery, each step in our process. This meant that lawyers, an easy investment for criminals. unrelated to the Trump project. researchers and investigators could understand and agree on the chosen approach before our During our investigations, Nogueira agreed to go on investigation was finally published. camera and talk to NBC about his role in the Trump project where he explained setting up anonymous This year we revealed In his interview with NBC and Reuters, Ventura Nogueria described how offshore companies was part of a package of services there were over the setting up of anonymous offshore companies was part of a package of services he offered for the buyers of TOC units. © NBC News he offered for the buyers of TOC units. 85,000 properties Alexandre Ventura Nogueira is a Brazilian former “Nobody ever asked me. Banks never owned by anonymous car dealer who was responsible for advance sales asked. Developer didn’t ask and companies in the UK. of up to half the units in the TOC. He worked with (the) Trump Organization didn’t ask. Ivanka Trump, who was so impressed with him, Nobody ask, ‘Who are the customers, she reportedly helped him developed his career as a broker. where did the money come from?’ No, nobody ask.” Ventura Nogueira Nogueira was involved in many shady business dealings during the project including working with

Snapshot: London’s secret properties 18 ANNUAL REPORT 2017 19

LAUNDERING MONEY THROUGH REAL ESTATE: A BEGINNER’S GUIDE TACKLING THE Cartel criminals can’t 1 keep their dirty money 2 So they buy properties RESOURCE under the mattress. with huge sums of cash SOLD or blank ‘bearer shares’. CURSE

BEARER SHARE

Anonymous By paying with dirty 3 cash or ‘bearer shares’ they can stash their Between 2013 – 2016 mining giant Glencore paid over $85m to Dan Gertler, a controversial businessman money in property accused of bribing senior officials in the DRC to advance his mining interests. He was sanctioned by the US without scrutiny in December 2017. © Simon Dawson/Bloomberg via Getty Images and detection. They and their money For many years, Global This year we have seen “Should I decide launderers want to Witness has focused major developments in our spend their dirty money work in this area: who are my friends without it being traced on tackling natural because of the threat of back to them. resource misuse and Dan Gertler sanctioned investigation, pressure its links to conflict and from Global Witness The criminal origins of the money are now corruption. Our work Since 2012, we have been 4 or public relations?” impossible to track and the dirty cash has spans the logging sector, concerned about the role that a become clean, leaving the criminals free billionaire mining magnate and “Never!” Dan Gertler to buy whatever they want. extractives from oil and close friend of Congo’s President, gas to minerals and Dan Gertler, has played in the gemstones, and the mining sector in the DRC. We intensive farming that looked at his relationship with Glencore has denied any wrongdoing in their Congo professionals carry out checks regimes. While it may have been a the commodities giant Glencore, Gatekeepers to the threatens so much of the deals, but the new evidence on their customers to ensure that long time coming, the introduction which owns two of the country’s international financial planet’s ecosystem. we uncovered suggests they are not facilitating money of public registers of beneficial biggest copper and cobalt system Glencore’s relationship with laundering. Global Witness is ownership across 28 countries operations. Our investigations Gertler goes much further than Company owners need service calling for all countries to make is definitely a game-changer for have revealed suspect loans and previously acknowledged, and providers like lawyers, estate these checks mandatory. tackling anonymous companies. payments made by Glencore to In particular, Global Witness agents and accountants to Gertler, who has been linked to raises concerns over possible focuses on what is described as help run their business. These We’re pushing for the US, where numerous bribery scandals. We bribery. This year, following , whereby professions are currently Is the tide turning on more anonymous companies are ‘the Resource Curse’ shone a spotlight on how Glencore comprehensive and detailed work the populations of countries rich considered to be high risk by anonymity? formed than anywhere else, to joined forces with Gertler to take by Global Witness, Gertler was in natural resources rarely benefit the Financial Action Task Force follow the EU’s legislative lead. over a copper project. Gertler was sanctioned by the US government This year, the EU agreed new from their exploitation. Instead, (FATF), the international anti- Despite the administration’s personally negotiating mining and his assets were frozen. This ground-breaking rules to reveal these countries often find their money laundering standard- rejection of transparency, there licenses in favour of that company has not only shut him out of the the true owners of EU companies, natural resources being used to setting body. This is because the is currently a very rare show of as the partners were in the process American financial system, but has through changes to the EU Anti- enable corruption, drive poverty or services they provide, such as bipartisan support for the idea. of taking it over. During these also contributed to the gradual Money Laundering Directive. This to fund conflict which places their forming companies and managing negotiations Gertler was being removal of an important financial is intended to respond to last people, wildlife and livelihoods at real estate deals, can constitute provided with tens of millions lifeline to his friend, Congo’s year’s Panama Papers revelations, real risk. Throughout our history, key stages in enabling money of dollars in loans and options, President Joseph Kabila, who which exposed how the rich are we have campaigned for greater laundering. As a result, FATF paid through secretive offshore retains an unconstitutional grip on exploiting secretive offshore tax transparency over the way natural now recommends that all such companies, in what appears to power. It also means international resources are extracted as a means have been an ‘incentivisation’ companies with existing business of counteracting environmental package. relationships with Gertler and and human rights abuses. related entities in the Congo, including Glencore, have had to re-evaluate their contracts. 20 ANNUAL REPORT 2017 21

Stripping Papua New No one had looked into how PNG Major companies in the US that Guinea of its tropical wood was being used in China came up in our investigations rainforest and globally. Until now. have also committed to changing their sourcing practices, and Following years of research, our China is the world’s largest timber Nature Home, China’s largest Stained Trade report revealed for market and manufacturer of wood flooring brand, also announced the first time how companies in products. It imports from many that it would stop buying from China are failing to screen out countries where weak governance illegal land leases exposed in our illegal timber, the risks this creates is leading to illegal logging, land investigation. An advisory body for importers of Chinese timber rights violations and rainforest of China’s forestry officials has products, particularly in the US, destruction. It is also currently publicly said that they are looking and the devastating impact the the only main timber consumer into options to regulate timber trade is having on people in Papua without a law to prohibit illegal imports. New Guinea. timber imports.

Papua New Guinea (PNG) is China’s biggest supplier of tropical Wildlife in decline logs and has seen its deforestation The ecosystem of PNG is rate triple in recent years – its truly exceptional; a third of its people are being illegally stripped species are believed to be unique of their land by their own to the country and it is home to government and police on the one of the largest rainforests on Logs in PNG © Global Witness payroll of logging companies have the planet. harassed, arrested and beaten 10 km Satellite, October 2013 landowners trying to stand up for International press, including 10 km Satellite, October 2013 their rights. Widespread abuse of National Geographic, reported on Drone image of oil palm frontier, Pomio District, East New a land-leasing scheme has seen our investigation, which led to a Britain Province. © Global Witness / Alessio Bariviera SPOTLIGHT 12% of the country given away to Chinese government delegation ON visiting Papua New Guinea to mostly foreign-owned logging and …NATURAL RESOURCES agribusiness interests for up to better understand the risks 99 years. associated with this trade. AND TRANSPARENCY

PAPUA PAPUANEW GUINEA In too many countries, natural resources NEW GUINEA NEW BRITAIN NEWISLAND BRITAIN ISLAND are ripped up, torn down, and extractedMu Mu on a vast scale to benefit a handful of businesses and government officials. The impact on communities living there is devastating as their homes and livelihoods

are destroyed. This is causing untold Satellite images: DigitalGlobe ©2017 Satellite images: DigitalGlobe ©2017 Lau damage to our planet,Lau subverting efforts Mauna to tackle climate Maunachange. Widespread abuse of a Our campaigning focuses on exposing land-leasing scheme has those who exploit natural resources for seen 12% of the country Drone, October 2016 their own benefit, taking money out Drone, October 2016 given away to mostly of desperately poor communities and foreign-owned logging and circumventing rules that exist to preserve agribusiness interests for the environment. We also push for better up to 99 years. enforcement of current laws protecting natural resources, and the introduction of

This page: Satellite imagery showsnew that from ones2011 to February to createOpposite barriers page: High-resolution to satellitethose imagery who of the area indicated by the This page: Satellite imagery shows that from 2011 to February Opposite page: High-resolution satellite imagery of the area indicated by the 2017, approximately 219 km2 of mostly intact rainforest was cleared white box on the map above shows intact forest (top image) cleared for 2017, approximately 219 km2 of mostly intact rainforest was cleared white box on the map above shows intact forest (top image) cleared for under three SABLs (green boundaries) in the Pomio District of Papua planting oil palm (lower image). An image taken by drone from the location and under three SABLs (green boundaries)seek in the Pomio profit District of Papuaat any plantingcost. oil palm (lower image). An image taken by drone from the location and New Guinea’s East New Britain Province. The deforested area is shown direction indicated on the lower image is shown above. New Guinea’s East New Britain Province. The deforested area is shown in red. The locations of villages named in this report are indicated. direction indicated on the lower image is shown above. in red. The locations of villages named in this report are indicated. See Appendix E for methodology. Background image: Google, Landsat / Copernicus. Drone image: ©Alessio Bariviera See Appendix E for methodology. Background image: Google, Landsat / Copernicus. Drone image: ©Alessio Bariviera Satellite, January 2017 Satellite, January 2017

Clearing Pomio’s forests PNG © DigitalGlobe 2017 22 ANNUAL REPORT 2017 23

PERU RUBBER Our undercover investigation into Peru’s biggest- We helped launch new Chinese guidelines to ensure “We have carried out 87 marches, ever timber scandal revealed how, contrary to rubber in the Mekong is sourced without land grabs ENVIRONMENTAL demanding that they respect our rights what they said publicly, exporters knew or had or deforestation. Following this, rubber giants Pirelli and we have had no response. The only reasons to suspect their exports from the Amazon launched a sustainable sourcing policy. We’re now DEFENDERS rainforest were illegal. Our footage is believed to be looking to work with Chinese and international response we have had is the bullet.” the first time exporters in Peru have been caught rubber producers, processors and purchasers to Francisca Ramírez, on camera acknowledging that official documents ensure the guidelines are implemented. Nicaraguan land defender are often falsified, and gives an insight into the scale of corruption that allowed the scandal to DRC LOGGING MORATORIUM happen. We are using our evidence to influence an Under ongoing pressure from a coalition of unprecedented, ongoing legal case in the country, Congolese and international NGOs – including one that could see timber exporters prosecuted for Global Witness – DRC’s ban on the allocation of new the first time in Peru’s history. industrial logging concessions remains in place, despite moves to lift it.

EU FUNDING Global Witness has exposed how major European investors have invested in projects such as rubber plantations in Cambodia which resulted in forced land grabs without compensation or palm oil plantations in Liberia, where communities have been harassed into signing away their land – we’re campaigning for a change in EU law to

Global Witness captured undercover footage of major timber stop this continuing. exporters discussing the cargo on board the Yacu Kallpa ship. It was subsequently detained and 96% of the timber on board was declared MYANMAR JADE ‘not of legal origin’. The case is recognised as the biggest timber sector We launched a new film exposing how jade is linked scandal in Peru’s history. © Environmental Investigation Agency “They threaten you so you to deadly armed conflict in Myanmar. will shut up. I can’t shut up. MINERALS DIAMONDS I can’t stay silent faced with After years of advocacy from us and others, a law We released two investigations revealing how all that is happening to my was passed requiring EU importers of four minerals diamonds associated with human rights abuse are linked to conflict and human rights abuse around still finding their way into global markets. people. We are fighting for the world to ensure they have full knowledge of their our lands, for our water, for supply chains and deal effectively with risks that our lives.” Jakeline Romero, arise along them. Left: Jakeline Romero has faced threats and intimidation after speaking out against abuses Colombian land defender of powerful corporations in Colombia. © Christian McLaughlin. Above: Francisca Ramírez has been threatened, assaulted and arrested for opposing plans for an inter-oceanic canal that would force up to 120,000 indigenous people from their land. © Global Witness In recent years, Global Witness has documented the dramatic upturn in This provides massive incentives to countries’ the murder of people who take a stand leaders to silence those defending their land and shut down their activism. xxxxxxxxxxxxxxxxxxxxxxxxxxxxXXXXXXXXXXXXXXXXX © XXXXXXXXXXX against companies that grab their land to turn their own profit, destroying In July, we launched our new report Defenders of the environment around them in the the Earth which found that nearly four people were process. Land rights are ripe pickings murdered every week in 2016 protecting their land and the natural world from industries like mining, for the corrupt elite who will use profit logging and agribusiness. To coincide with this, from the sale of land to fund lavish we launched an important new partnership with lifestyles, and not invest it into state the Guardian. Its online site logs and documents treasuries where it should go to help each and every defender death in real time. Our the poor and disenfranchised. work with the Guardian has kept up the pressure on governments and companies by tracking the appalling violence directed at brave activists who Freelance Yemase miners sit on the top of a hill near the fight not only to save their homes, livelihoods and Ngo Pin where Ever Winner, Pho Thar Htoo, Mya U Yin, land, but also to protect the environment for us all. Yadanar Yaung Chi and Wai comapanies are opearating, Hpakant, October 23, 2016. © Minzayar 24 ANNUAL REPORT 2017 25

SPOTLIGHT Who is behind the “They destroyed our ON murders? crops, they burnt ...HONDURAS - THE Following a two-year our food, they left MOST DANGEROUS PLACE investigation we revealed how us completely on the projects at the heart of conflicts TO BE AN ENVIRONMENTAL over land are linked to the street as if we have DEFENDER country’s rich and powerful never been there. A 2017 began with a smear campaign in elites, amongst them members community robbed of Honduras against both Global Witness of the political class. everything.” Roberto and other human rights organisations as We shed light on the back-door we launched our new report into deaths Gonzalez deals, bribes and lawbreaking of environmental and land defenders in used to impose projects and Despite the horrifying situation the country. By the end of the year we’d silence opposition. We also for so many defenders in seen the suspension of constitutional scrutinised how the US is Honduras this year, there was rights and widespread mostly peaceful bankrolling Honduran state also some good news. Backers demonstrations against alleged fraud forces, which are behind some for a development project in in the Presidential elections shattered of the worst attacks. the Agua Zara dam pulled out as scores of protesters were killed by after relentless campaigning state security forces. Farcically, while Among those linked to the from many groups, including this was happening the US government violence is Gladis Aurora López, Global Witness. This followed certified that Honduras had been fighting Nowhere are you the president of Honduras’ the shocking murder of corruption and supporting human rights, more likely to be ruling party and one of the acclaimed land defender Berta clearing the way for the government to killed for standing up most powerful politicians in Cáceres, a well known activist receive millions of dollars in US aid. to companies that grab the country. Documents leaked and a mother of four. She was land and destroy the to Global Witness reveal that brutally gunned down in her “You’d better make sure environment than in the planned Los Encinos own home because of her that car’s bullet-proof!” Honduras hydro-power project in opposition to the dam. Journalist speaking to the west of the country is controlled by López’s husband, We continue to push for Global Witness investigator, who aims to sell energy to the greater accountability from Billy Kyte in Honduras 2017 state despite appearing to have those banks who bankroll a clear, and illegal, conflict of such projects. interest. Both Gladis Aurora The findings and López and her husband deny recommendations in our any conflict of interest or Honduras report led to a call illegality in the approval of the for a change in US policy in Los Encinos project. Honduras by almost 80 US Roberto Gonzalez is an legislators. Part of the US’ indigenous activist who has aid to Honduras is being held vocally opposed the Los back because of human rights Encinos project. He spoke to concerns. Our report also us about the threats he and his led to charges being brought community have faced. against one of Honduras’ most powerful political figures. Global Witness investigator Billy Kyte is met by the media after being threatened on live TV.

Top: The former security head for the DESA dam company is one of seven people arrested for the killing of Berta Cáceres. © Giles Clarke/Global Witness Left: Dam construction is one of the main causes of violence against activists in Honduras. © Giles Clarke/Global Witness 26 ANNUAL REPORT 2017 27

SPOTLIGHT ON ...2018

In 2018, we remain focused > We are pushing for the on exposing the systems International Criminal Court that enable environmental in The Hague to take up and human rights abuse, an investigation into land and pushing for change. grabbing as a crime against Our investigations can take humanity. This will act as years of painstaking and a warning to international detailed research before we companies and financial have all the facts, evidence investors to steer clear of and sources in place to go projects that are linked to public. Throughout this entire land grabbing, human rights process, we rely on funding to violations and environmental enable our work and to drive destruction much needed change. > Following our success As well as longer term in lobbying Michelin and investigations, we’ll continue Pirelli, we are campaigning to work on the following; for other big tyre manufacturers, including > Anonymous companies Goodyear, General Motors have no place in modern and Continental, to develop ethical business practice and their own natural rubber there’s a growing appetite sourcing policies. These to tackle this. We’ll be using should commit them to the success seen in the EU to ending the purchase of galvanise support for similar natural rubber which is legislative action in the US driving deforestation and > We’re watching the Shell land grabbing and ENI trial with interest > Our pioneering work and will be working hard to engaging influential ensure it sets a precedent for Chinese ministries and top the oil industry, showing that leadership will continue in corruption can result in not China to increase awareness only financial penalties for of the damage illegal logging companies but also personal is having on the global penalties for executives environment > We will continue to > We will continue to defend US transparency expose the corruption and laws, particularly aimed at governance challenges the oil and gas sectors, and facing the US in order to will look to expose how big highlight why these laws oil companies, in particular can’t be dismantled Chevron and ExxonMobil, are working to undermine greater accountability

Global Witness has spent over 20 years exposing how a handful of people who hold the reins of power in Cambodia have used state security forces and violent tactics to evict people from their homes and seize valuable land. © Thomas Cristofoletti/Ruom 28 ANNUAL REPORT 2017 29

THANK YOU TO ALL OF OUR SUPPORTERS*

Trusts, Foundations, Norwegian Agency for Board of Directors Global Witness is a non-profit We want to thank all of our donors for Government Donors, Development Cooperation (NORAD) Mark Stephens CBE (Chair) organisation that relies on the generosity sharing our vision for a better world - NGOs and Multilaterals Omidyar Network Patrick Alley of our supporters and partners to where corruption in the global political Adessium Foundation Postcode Planet Trust Charmian Gooch continue our tireless investigations, and economic system is challenged and Alexander Soros Foundation Pro Victimis Foundation Juana Kweitel exposés and advocacy. Without your accountability prevails, people’s rights Arcadia - a charitable trust of support the victories we have struck to land and livelihood are protected, Peter Baldwin and Lisbet Rausing Revolution in Kindness Stephen Peel against conflict, corruption, human rights governments act in the public rather than Bertha Foundation Silicon Valley Community Simon Taylor abuses and environmental destruction the private interest, and the environment Foundation Bread for the World Jessy Tolkan around the world would never have on which we all depend is protected. Skoll Foundation Brook Foundation happened. Stories of Change, a project of CrossCurrents-UK Advisory Board Sundance Institute supported by Don Quixote Foundation the Skoll Foundation Bennett Freeman (Chair) Evan Cornish Foundation Sweden, represented by Swedish Misha Glenny DONORS Nomi Cohen Sam La Croix Will Snell FJC, A Foundation of International Development Stephen King Cooperation Agency (SIDA) James Darnton Edward Lazell Alexander Soros Philanthropic Funds Camille Massey Taylour Foundation Individuals Ken & Dana Design Hans Leptien Andy Spurr & Alisa Ford Foundation Bandi Mbubi The Foundation to Promote Fares Al-Hassan McFarland Designs - Johan Lim Voznaya Generations Fund of the Maine Arlene McCarthy OBE Community Foundation Open Society Laura & John Arnold Ethical Custom Jewelry Wendell Lionarons Kevin Starr Christopher Mitchell Grantham Foundation for the The Paul Foot Award 2017 Harriet Beaumont Charles Dickerson Karen Litfin Richard Stebles Aryeh Neier (Honorary Chair) Protection of the Environment Third Sector New England Alberto Begue Paul Elwell-Sutton Jane Thurnell-Read Anita Ramasastry Stephen Mangan Horace W. Goldsmith Foundation Tilia Fund Dominic Belfield Charles Fianko Dimitri Tsamados Silas Siakor George Martin Irish Aid Trellis Charitable Fund Douglas Bender George Gallagher Danielle van Oijen Alexander Soros Samuel Mary IUCN NL UK Department for International James Bennett Isabelle A Georgeaux Mark Van Wijk Mabel van Oranje Nessa Matthews JMG Foundation Development (DFID) Nikolai Berkoff & Patrick J Healy Brian Veitch Edward Zwick Graym McMillan Jocarno Fund Wallace Global Fund Eva Bermúdez Amy P. Ginsburg Aryeh Neier Matthew Weinbaum Kestrelman Trust William and Flora Hewlett Zimmerman William Gray Foundation Georgia Oetker Emma Whitlock Ministry of Foreign Affairs Trustees of Global Simon Bianco Lee Hambling David Oglaza Hayley & Samuel of Denmark Witness Trust (UK) Mateusz Bieniek Jessica Hamer Willingale Christopher Mitchell (Chair) Michelle Patterson Vicky Bowman Antoine Hardy Eddie Willman Jeremy Bristow Stephen Peel Gerco Broekstra Sarah Harrison Hitoshi Yamauchi Caroline Digby Timothy Phillips Viggo Brun Kimberley Hikaka Tony Stevenson Benedict Prescott James Carrier Nicola Hodges Pierrette Quintiliani George Cheeseman Brent Hourd Directors of Global Benjamin Rutledge Montha Cheng Dave Johnson Witness Foundation Val Schaffner Richard Cheng Eric Johnson (US) Mike Servent Aaron Clements- Charles Klein Stafford Matthews Susan Seymour (President) Partridge Sebastien Patrick Alley Korwin-Wroblewski Ana Simeon Bennett Freeman

*These are the donors that have given their consent to have their gift acknowledged in our Annual Report 31

30 ANNUAL REPORT 2017 31

INCOME AND EXPENDITURE STATEMENT

3% 2%

INCOME BY SOURCE 2017 2017 2016 2016 15%

Governments 2,244 21% 2,284 22% 21% Trusts and Foundations 6,254 59% 5,434* 51% 2017 SUMMARISED ACCOUNTS Individuals 1,586 15% 1,603 15% INCOME For the year ended 31 December 2017 (in £ thousands) Other NGOs and Multilaterals 296 3% 790 8% 2017 2016

Donated services and facilities 193 2% 398 4% INCOME 10,573 100% 10,509 100% 59% Income from donations and charitable activities 10,492 11,665 Interest and other income 81 94 Total income 10,573 11,759

12% 9% EXPENDITURE EXPENDITURE 2017 2017 2016 2016 Environmental and human rights research and campaigning > Conflict and fragile states 1,946 1,800 Campaigns 7,600 79% 7,353 80% 2017 > Corruption 3,016 2,989 Indirect costs and governance 1,121 12% 972 11% EXPENDITURE > Forests, Land and Climate 3,759 3,536 Cost of raising funds 915 9% 849 9% Subtotal campaign expenditure 8,721 8,325 9,636 100% 9,174 100% Cost of raising funds 915 849 79% Total Expenditure 9,636 9,174

Net movement in funds, being net income for the year 937 2,585 Net movement of unrestricted fund 359 2,087 Net movement of designated fund (28) (18) Net movement of restricted fund 606 516 BY CAMPAIGN 2017 2017 2016 2016 22% Increase in net assets 937 2,585 Conflict and fragile states 1,946 22% 1,800 22% 43% 2017 Corruption 3,016 35% 2,989 36% BY CAMPAIGN Net assets at the beginning of the period 5,599 3,014 Forests, Land and Climate 3,759 43% 3,536 42% Net assets at the end of the period 6,536 5,599 8,721 100% 8,325 100% 35%

*Does not include Challenge Fund income (2016 £1.25m) “The black mist” “Kuroi Kiri” Japan “Trebles all round” UK “Little carp” Czech Republic “To grease the palms” US “Kite” Argentina “Nokia box” Hungary “To wet someone’s beard” “Mouiller la barbe de quelqu’un” Cameroon “Rice cake expenses” “Ttokkap” South Korea “Cooking the books” US “Pulling strings” UK “Little way” “Jeitinho” Brazil “Grease money” “Schmiergeld” Germany “Wine jar” “Pot de vin” Democratic Republic of Congo and Cameroon

People will do anything to avoid straight-talking. At Global Witness we call it corruption.

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