United Kingdom's OpenCorporates

2013 saw the UK Government concurrently host the Open Government Partnership (OGP) summit and hold the presidency of the G8. Prime Minister David Cameron used this joint platform to launch a positive commitment to beneficial ownership transparency (identifying the real owners of corporate entities—a key tool in eliminating the ability of anonymous shell companies to mask financial corruption) that has the potential to drive global norms on the issue. Behind the scenes, a coalition of civil society groups focussed on corruption, fraud, overseas development, and tax justice were driving the agenda, aided by open corporate data pioneer OpenCorporates.

This case study shows how OpenCorporates was able to leverage its expertise in order to play a critical, if minor, role in the success of the campaign for beneficial ownership transparency. It also discusses two issues in open data impact as a driver for social change: the continuing role of traditional advocacy and the limits of so-called exhaust PSI.

• Moving the needle on complex issues like corruption and governance reform requires much more than opening government data: The success of just this one chapter in the campaign for beneficial ownership transparency relied upon a concurrence of factors including political mood, external events, and focussed, concerted efforts from traditional advocacy organisations.
• OpenCorporates’ expertise, gained from years of handling government data (open and not open) about companies, had a critical, if minor, role to play in this success. OpenCorporates could not have gained this success on its own.
• The role of the open data community should not just be to use the government data it is given, but to demand the government data it needs.

In 2010 the World Bank published a report showing that of 213 grand corruption investigations across 80 countries, 150 involved corporate vehicles that shielded the true beneficiaries of financial transactions. In these 150 cases, the total proceeds of corruption amounted to approximately $56.4 billion. The report, The Puppet Masters: How the corrupt use legal structures to hide stolen assets and what to do about it, opens with the example of a tender put out by the Kenyan government to replace its passport system:

Despite receiving a bid for €6 million from a French firm, the Kenyan government signed a contract for five times that amount (€31.89 million) with Anglo-Leasing and Finance Ltd, an unknown UK shell company, whose registered address was a post office box in Liverpool. The Kenyan government’s decision was taken despite the fact that Anglo-Leasing proposed to subcontract the actual work to the French company. Material leaked to the press by whistle-blowers suggested that corrupt senior politicians planned to pocket the excess funds from the deal. Attempts to investigate these allegations were frustrated, however, when it proved impossible to find out who really controlled Anglo-Leasing.1

One of the report’s key recommendations was that information available at company registries should be improved and made more easily available. The recommendation echoed that made by a similar report published by the OECD in 2001, Behind the Corporate Veil: Using Corporate Entities for Illicit Purposes, which called on governments “to ensure they are able to obtain information on the beneficial ownership and control of corporate entities”2.

OpenCorporates is the largest open database of companies in the world. Founded by “open data veterans”3 Chris Taggart and Rob McKinnon, it launched at the end of 2010 covering 3.8 million UK past and present companies. As Chris Taggart told the Open Data Institute in 2012:

We take messy data from government websites, company registers, official filings and data released under the Freedom of Information Act, clean it up and using clever code make it available to people.4

The launch of OpenCorporates predates the decision by Companies House to release all the data it holds as open data. But Companies House has made more basic datasets available for several years, and it was this data, combined with other government data sources (for example government spending data and Health and Safety notices) that fuelled OpenCorporates in the beginning. Taking the same mixed input approach, OpenCorporates has now expanded its coverage to over 105 jurisdictions and 85 million companies today.

In 2012, Global Witness, a civil society group that investigates and exposes the links between natural resources, corruption, and conflict, began dedicating more resources to moving the needle on the beneficial ownership issue. Though their original advocacy target was EU Money-Laundering Regulations, which were about to be updated, Global Witness soon became aware that political forces in the UK were aligning to make the UK’s hosting of the G8 summit at Lough Erne a favourable venue for pushing reform. If they could get the G8 leaders to commit to beneficial ownership transparency, they could begin establishing a global norm.

The UK government was under pressure to respond to several financial scandals, including angry press coverage of the tax avoidance in the UK of major US firms Amazon, Starbucks, and Google, and the 2012 US Senate investigations into British bank HSBC’s involvement in money-laundering for Mexican drug cartels. Speaking at the World Economic Forum in Davos in January 2013, David Cameron called on the G8 to get its own house in order on corporate transparency, citing the “long and tragic history of some African countries being stripped of their minerals behind a veil of secrecy”, and outlining a three-pronged agenda for his presidency of the G8: Trade, Tax, and Transparency5.

Robert Palmer, head of Global Witness’ banks and corruption campaign, calls the speech “a real moment in the campaign, where … the direction of travel of the UK agenda [became clear]”6. In it, Cameron cites the work of the economist Paul Collier, Professor of Economics and Public Policy at the University of Oxford, and sources at the Cabinet Office confirm that Collier’s work had a big influence on the Prime Minister. Also influencing the Prime Minister according to these sources was the fact that G8 leaders “were unlikely to turn up to the meeting with their cheque books open”7. A coup like the one accomplished by Tony Blair at the Gleneagles summit in 2005, where G8 leaders committed significant funds in aid to Africa, was unlikely. A “new way of thinking”8 was therefore needed.

Also looking to repeat the successes of the UK’s last G8 presidency were a group of civil society organisations involved in the original Make Poverty History campaign that targeted Gleneagles. The Enough Food for Everyone IF campaign was a coalition of major development NGOs, including Save the Children, Oxfam, Christian Aid, and CAFOD. A subset of this group, chaired by David McNair (then at Save the Children and now at the ONE Campaign), and including Robert Palmer (though Global Witness were never formally part of the IF campaign), began holding weekly calls on the beneficial ownership issue in the lead-up to the G8. Robert Palmer remembers:

It was one of the most impressive group of campaigners I have ever been around …. The G8 campaign was a real collaborative effort between groups like Global Witness who could bring our policy knowledge … and groups like Christian Aid, and the ONE Campaign, who had political access and campaigners and supporters they could mobilise.9

At Lough Erne in June 2013, the G8 leaders committed to a core set of principles “to prevent the misuse of companies and legal arrangements” that included measures on beneficial ownership10, and David Cameron committed the UK to a central registry of company beneficial ownership information11. He said he would consult on whether to make the registry public. Reporting on the results of the G8 summit to Parliament, Cameron stated that there were “strong arguments for public registers of beneficial ownership all over the world”12. Ensuring that the registry was open to all became the new focus of the civil society campaign.

Chris Taggart, the CEO of OpenCorporates, was in touch with the NGOs working on beneficial ownership transparency, but he wasn’t on the weekly calls that led up to the G8. Thanks to a small grant from the Alfred P. Sloan Foundation, OpenCorporates had been delving into the corporate structure issue separately to Global Witness and the NGOs involved in the IF campaign.

OpenCorporates was investigating a generalised approach to how complex corporate structures could be modelled and constructed using diverse official and regulatory data, and represented within the OpenCorporates dataset. The project kicked off with three separate datasets: shareholder data from New Zealand’s company registry, to which OpenCorporates already had access through an API key; and two datasets from US regulators13. At the heart of the project was the idea that in the age of the internet, “you can have corporate structure set ups appear that can be as complex as the computers that can cope with them”14, and that society could only combat the proliferation of complex corporate structures through better data.

To make this case, OpenCorporates worked with data visualisation studio Kiln on a series of visualisations to underscore the complexity of the structures behind a handful of the world’s more recognisable global companies, mainly in the financial sector. One of the visualisations—representing Goldman Sachs—is shown in Figure 6.

Figure 6: Detail from OpenCorporates and Kiln’s visualisation of complex corporate structures. Copyright OpenCoporates. Reproduced with permission.

Displaying the country of incorporation in a map-based way required “some significantly difficult maths,” says Taggart. But it lends the message a visual power: The landmass shown below the United States in Figure 6 is the Cayman Islands, an offshore tax haven in which Goldman Sachs has 739 registered subsidiaries15.

The visualisation was reported extensively but almost exclusively by the technology press17. Yet although it may not have enjoyed mainstream impact in and of itself, the work OpenCorporates had put in behind the scenes had a key role to play in the period between the G8 announcement and the UK’s hosting of the OGP Summit in October 2013.

Devising the generalised data structure for corporate relationships as part of the Sloan work was “one of the hardest things I’ve ever done in my life,” says Taggart. But a by-product of this sort of handling of open government data is the ability to speak the language of internal government bureaucracies. This turned out to be a key advocacy tool. The labour put into establishing, for example, how to represent the multiplicity of different structures, how to define what a subsidiary was in the face of different national interpretations, how to represent changes in a structure over time, paid off once OpenCorporates became more deeply involved in the campaign for a public beneficial ownership registry in the UK post-G818:

Going down to that sort of level is really important …. It’s not just the fact that there should be a public beneficial ownership register, nor even that there should be a public beneficial ownership register that is open data. How is the data stored? What’s being done on it? How is that being recorded? What level of granularity? What should we do here? What should we do there? Understanding the problem is a nontrivial part of the puzzle here.19

David McNair agrees:

The added value that I saw OpenCorporates bring was that very, very detailed knowledge of how this database would work …. If it was just OpenCorporates of course it wouldn’t have happened. But the example they were showing in terms of demonstrating that it’s possible to build a database, and the technical understanding that they had as a result of that, was really critical for making the standard robust.20

Robert Palmer echoes this sentiment, calling what OpenCorporates did “data-based advocacy”. He recalls a moment when the Department for Business were consulting on whether directors’ and shareholders’ full dates of birth should be published on the register: OpenCorporates were able to demonstrate using real data that were dates of birth to be partially redacted, investigators would be unable to identify individual directors and shareholders robustly in cases numbering in the tens of thousands.

Palmer also argues that OpenCorporates was instrumental in pushing NGOs to demand the registry be made publicly available:

One of the biggest impacts that OpenCorporates had on the campaign was to insist that the new beneficial ownership information be provided as open data and this was a key part of the eventual NGO position and the final government announcement.21

In October 2013, David Cameron announced at the OGP summit that the UK’s registry of beneficial owners would indeed be public. It was a major success for the campaign.

Commitments to beneficial ownership transparency are now spreading as a global norm, just as Robert Palmer and his fellow campaigners had hoped. But the campaign is by no means won. Indeed, when the G20 announced its commitment to beneficial ownership transparency in November 2014, language around making national registries public was very much missing22, to the disappointment of transparency NGOs.

In the UK, Chris Taggart will be watching for the impact of the new rules:

What’s going to be interesting is the number of companies that dissolve and remove themselves from the register before the beneficial ownership requirements come in.23

The expertise OpenCorporates has gained across years of handling government data about companies, and especially the work it did on complex corporate structures, played a critical, if minor, role in achieving the overall impact discussed in this study: the Prime Minister’s commitment to a public register of beneficial owners in the UK.

The success of this chapter in the campaign for beneficial ownership transparency relied upon a rare concurrence of factors including political mood, external events, and focussed, concerted efforts from traditional advocacy organisations. The combination of the UK hosting the G8 as well as chairing the Open Government Partnership was also a lucky break. Open data expertise had some role to play in this success, but it could not have gained it in isolation. This last point is perhaps the point of this study: Moving the needle on complex issues like corruption and governance reform requires much more than opening government data. Chris Taggart says he has “so much respect for the other actors involved”, and the lobbying work they did:

That stuff’s really hard. I mean, the stuff I do, the data, the coding stuff, that’s way easier than that sort of stuff.

Could the G8/OGP summit campaign have succeeded without OpenCorporates? The G20 commitment contained no language on beneficial ownership registers being public, and it’s tempting to speculate that this could be because no equivalent organisation to OpenCorporates was involved in the campaign running up to the G20. However, it’s likely that individual and entrenched political cultures in the G20 group played a larger role: Insiders say China was the major block in making beneficial ownership registries public.

The story of OpenCorporates’ role in the campaign for beneficial ownership transparency has been picked up by Jonathan Gray and Tim Davies in their arguments for participatory data infrastructures24:

We think the case of campaigning for a public registry of beneficial ownership in the UK is an interesting example of where calling for the disclosure of existing datasets was not enough—as the information needed was not routinely collected by the public sector. Civil society organisations had to undertake a more creative, sustained and holistic engagement with shaping and influencing the development of data infrastructures as socio-technical systems.25

Their argument, that most government open data is an administrative by-product and may not therefore capture aspects of its subject needed by data re-users such as advocates, is radical and relevant.

We contend that a politics of public information fit for the digital age should go beyond the question of what datasets are disclosed when and to whom, and should additionally ask what information should be collected and generated in the first place.26

Traditional advocacy organisations, with their political experience, strategic thinking and networks of influence, make powerful allies in campaigns to open up government data.

For open data practitioners

A by-product of daily handling of open government data is the ability to speak the language of internal government bureaucracies. That ability can be a powerful tool in advocacy.

For funders

Traditional advocacy efforts can be complemented and enhanced by open data approaches. This might mean a new presentation of the facts based on open data sources, or simply the inclusion in civil society coalitions of open data practitioners able to speak the language of internal government bureaucracies thanks to their daily handling of government data.