Is Australia ‘soft’ on corruption?

The Independent Commission Against Corruption (ICAC) in NSW has been much in the news with a recently high-profile High Court case loss which some politicians and commentators have argued will impede the fight against corruption in the state. Others have argued it had over-reached its remit.

Without commenting directly on that case, casual observers could be forgiven for assuming that anti-corruption campaigning is high on the agenda in Australia. It’s true that we, along with New Zealand, have a reputation as one of the world’s least corrupt countries. But this is largely based on the ratings in the Transparency International Corruption Perception Index.

Looking back over the last five years or so, there have been lots of bribery & corruption allegations involving the public and private sectors in Australia, so it’s fair to say we are identifying the issues. However, we don’t seem to prosecute bribery & corruption with the same vigour that applies in countries such as the US, UK and, more recently, China. ICAC and its equivalent bodies in the other states do pursue allegations of bribery and corruption with vigour, and there have been plenty of findings of corrupt conduct, by ICAC in particular, but the findings don’t always result in criminal prosecutions.

This issue has now been highlighted by the OECD’s working group on bribery, which issued a report in April 2015 that gave Australia a bare ‘pass mark’ for its implementation of anti-bribery measures but said more law reform was needed to boost prosecutions. It suggested strengthening sanctions and enforcement for false accounting offences, and introducing rules that could bar companies found to have bribed foreign officials for bidding on government work. It also wants Australia to widen its whistle-blower protections to safeguard private and public sector employees, and encourage greater self-reporting by companies.

I would have to agree that Australian companies have been slow to adapt – the approach to compliance is far from best practice, and therefore increases the exposure to significant regulatory, reputation and operational risk. A KPMG Australia study of ASX listed companies on overseas bribery in 2009 showed that nearly half of respondents did not have anti-bribery and corruption compliance programs in place. A more recent study found the same result – nothing much has changed in the last 5 years.

I believe corruption is a serious issue in Australia, just as it is in many countries. One only has to look at some jurisdictions in Africa and Asia to realise the massively detrimental impact bribery has on economic development. Developing countries lost a total US$5.9 trillion in dirty money to crime, corruption and dubious business in the decade 2002- 2011. If corruption were an industry, it would be the world’s third largest at around US$2.6 trillion, over 5 percent of GDP.

It is true that there is a greater focus on governance and transparency in business dealings now than there has been in the past, but, my concern is that the lack of prosecutions and the fact that people don’t seem to go to jail for engaging in corruption, will erode the interest of the public in the issue. At a time when one of Australia’s major trading partners, China, is stepping up its efforts to deal with corruption, it cannot afford to be seen as a ‘soft touch’ in addressing the same problem.  

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