Business corruption Down Under

Corruption in Australia
Chris Sheedy By Chris Sheedy, CA Today

8 December 2015

Corruption is on the rise in Australia, that much we know as fact. As another International Anti-Corruption Day – December 9 – comes and goes, what can be done to stem the tide?

It is unfortunately rare in the Australian media to experience a day in which corruption of some sort - in politics, law enforcement, sports management, organised religion, the union movement, other senior bureaucracy and business - is not exposed.

This is not just a result of an increasingly intense media cycle, it is simple fact.

Until 2014 Australia had never been outside of Transparency International’s list of top ten cleanest countries in terms of corruption.

Now the nation stands, not so proudly, at number 11. New Zealand, in comparison, is at number two.

Business corruption worldwide

Business corruption

A hefty 64% of Australians, the organisation says, believe their government’s efforts to fight corruption are ‘ineffective’ or ‘neither effective nor ineffective’. And 54% of people feel the level of corruption in Australia has increased since 2007-10.

Until 2014 Australia had never been outside of Transparency International’s list of top ten cleanest countries in terms of corruption. Now the nation stands, not so proudly, at number 11.

Perhaps unsurprisingly, after various media stories and Independent Commission Against Corruption (ICAC) investigations, political parties are seen to be the institutions most affected by corruption. But ‘business and the private sector’, ‘police’, ‘media’ and ‘religious bodies’ are not far behind, according to Transparency International’s Global Corruption Barometer.

In September 2015 Chartered Accountants Australia and New Zealand (CAANZ) issued a media release saying corruption in Australia and New Zealand is on the rise.

It is a big issue, CEO Lee White said, because “both Australia and New Zealand have traditionally traded on reputations of honesty and integrity…this reputation is at risk if the issue isn’t addressed, and steps put in place to mitigate the threat.”

What can be done?

More regulation, most believe, is not the answer. CAANZ recommends, amongst other measures, stock exchange anti-bribery and corruption policies, prohibitions on the reward of contracts from the public sector to businesses without corruption policies or people/businesses with past convictions, increased use of asset confiscation and rewards for whistle blowers.

Others believe anti-corruption bodies, such as Victoria’s Independent Broad-based Anti-corruption Commission (IBAC), do not have enough power.

Then there is the argument that has been put forward by various specialists for a federal anti-corruption mechanism. The state-based bodies have some effect, so surely a national system would do the same, but on a larger scale, they say.

Neville Tiffen, corporate governance, integrity and compliance consultant, is one of these specialists. In a 2014 article in The Age, Tiffen argued that a lack of transparency in government contracting “leads to suspicion of conflicts of interest and unfair advantage”.

For businesses it raises the question of how they best deal with allegations of corruption which, most often, are originally raised internally.

Such issues could be solved, Tiffen said, if all bids had to be declared once a contract was awarded, if businesses and individuals that had committed a past integrity offence were debarred from the bidding process, and if bidding businesses required an integrity and compliance program, including a built-in whistleblowing service.

Similar messages and recommendations, it seems, are coming from a number of angles.

For businesses it raises the question of how they best deal with allegations of corruption which, most often, are originally raised internally.

ICAC says a multi-pronged approach should be taken, possibly beginning with a well-conducted internal investigation adhering to natural justice principles. The person being investigated should be allowed to have their say, for instance. Investigators should be impartial and objective. And action taken should not be based on suspicion or speculation, but instead on evidence.

Other important steps can include timely communication with the Police and with any relevant anti-corruption body, and appropriate disciplinary action.

Most important, ICAC says, is “an ongoing review of corruption prevention controls” that helps to ensure lessons are learned and policies and procedures are altered in order to create less scope for corrupt actions in the future.

About the author

Chris Sheedy is one of Australia’s busiest and most successful freelance writers. He has been published regularly in the Sydney Morning Herald, Virgin Australia Voyeur, The Australian Magazine, GQ, In The Black, Cadillac , Management Today, Men’s Fitness and countless other big-brand publications. He is frequently commissioned to carry out copywriting and corporate writing projects for organisations, including banks, universities, television networks, restaurant chains and major charities, through his business The Hard Word.

Topics

  • Business
  • Australia

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