02.06.2025

A joint blog by Naomi Roht-Arriaza, Distinguished Professor of Law (emerita), University of California Law, and Lucie Binder, Senior Specialist, Governance and Integrity, Basel Institute on Governance.

Who are the real victims of corruption?

Traditionally, the answer has been “the state.” This stems from the fact that corruption typically involves the misuse of public office and the theft or diversion of public funds. In this legal framework, the state prosecutes the crime, claims the damage and receives any recovered assets.

But what if the state is part of the problem? In contexts of grand corruption or kleptocracy, where entire government systems are complicit or captured, treating the state as the sole victim makes little sense. The real harm falls on individuals and communities: children poisoned by unsafe food in corrupt school feeding programmes (as happened in Peru); patients denied treatment because health budgets were looted (as happened in Venezuela); or families displaced by infrastructure projects greenlit through bribery (as happened in Honduras and elsewhere).

These are not abstract harms – they are direct violations of human rights. As explored in Naomi Roht-Arriaza’s Fighting Grand Corruption: Transnational and Human Rights Approaches in Latin America and Beyond (Cambridge University Press), a growing movement of legal scholars, judges and practitioners is challenging the state-centric model. They are pushing for a more victim-centred approach to corruption: one that recognises and repairs harm and enables those affected to participate in justice processes.

Aligning anti-corruption and human rights: a Basel Institute priority

The convergence that Fighting Grand Corruption highlights aligns with the Basel Institute’s own work at the intersection of corruption and human rights. In Quick Guide 32, our Vice President Anne Peters explains how corruption contributes to systemic conditions that undermine human rights, especially access to healthcare, education and justice. It also directly violates rights through discriminatory practices, illegal detention or the suppression of freedoms essential to exposing corruption itself, such as press freedom and the right to information.

Furthermore, asset recovery and forfeiture mechanisms – as analysed in our Working Paper 54 – must adhere to international human rights standards to build trust and ensure fairness, and foster international cooperation.

Reimagining remedy: what reparations for corruption could look like

In our Quick Guide 31, we argue that countries already have a range of policy options to ensure that confiscated assets are used for the public good. These range from reinvesting funds into law enforcement or community programmes to enabling direct repatriation or co-managed development projects in countries where citizens have suffered the harms of corruption.

Models like Italy’s redirection of mafia assets to social initiatives or France’s development-focused asset return mechanisms show how the reinvestment of stolen wealth can foster both justice and sustainable development. Roht-Arriaza’s book explores these and related options for return and reparation in detail.

The Basel Institute has long emphasised the importance of such responsible asset return models. We actively support countries in developing frameworks that align with both anti-corruption and human rights principles.

How would these approaches affect the private sector?

Recognising that corruption and human rights violations are often systemic and deeply linked reinforces the need for companies to connect compliance efforts across both areas. Doing so enables businesses to more effectively:

• identify large-scale governance risks;
• understand their cascading impacts; and
• anticipate regulatory or reputational exposure, particularly in high-risk environments.

Integrating anti-corruption considerations into sustainability and human rights due diligence processes can help prevent costly missteps, such as inadvertently supporting abusive actors or financing projects that harm vulnerable communities.

For example, Dutch banks financing Honduran dams secured by high-level bribes and regulatory subterfuge suffered years of lawsuits and tarnished reputations. Importantly, identifying victims and documenting harm makes corruption tangible. It moves corruption out of the abstract and enables ethical businesses to distinguish themselves from competitors who profit from impunity.

In Honduras, Mexico, South Africa, Sri Lanka, Argentina and elsewhere, legal systems increasingly recognise victims’ rights to participate in proceedings and seek redress. These developments will also need to be reflected in corporate risk assessments, especially for marginal or politically exposed projects. Companies will need to ask not only “is this legal?” but also “what is the harm, and who bears it?”

Collective Action, in the sense of sustained, collaborative multi-stakeholder initiatives involving the private sector, provides a powerful vehicle for navigating these challenges. By engaging in such initiatives, businesses can help shape shared standards, mitigate systemic risks and demonstrate commitment to responsible conduct in environments where state capacity may be weak or compromised.

Such collaboration not only fosters more coherent and credible compliance approaches but also supports wider efforts to ensure that justice reaches those most affected by corruption.

Fighting Grand Corruption is available through the publisher or major bookstores.