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Australia fails to improve ranking in global corruption index amid mounting push for federal watchdog

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Category: Corrupt Politicians

Created: Wednesday, 25 January 2017 10:37

Written by Sam Clark and Dan Oakes - ABC News

Australia has maintained its position in a key corruption ranking, ending a four-year slide down Transparency International's global corruption ladder, but experts warn the reprieve may be short-lived if major reforms are not implemented.

The index ranks countries based on perceptions of corruption in the public service. Nations at the top of the list are seen as the least corrupt.

For the second year running, Australia placed 13th in the rankings. In 2012 Australia was ranked 8th.

Transparency International Australia board member Professor A.J. Brown said the data used in the latest report was compiled before the recent political expenses scandal that dominated headlines over much of the summer.

"We have every reason to be concerned that next year, unless we start to take some concrete steps to build international confidence, then this may just have just been a little step on a continued way down," Professor Brown said.

The report's authors also criticised Australia for what it described as "unrelenting" attacks on the credibility of the Human Rights Commission, saying that the criticisms undermined the commission's independence.

New Zealand and Denmark topped this year's rankings as the least corrupt nations, with our near neighbour climbing three places since last year to regain top spot. Timor Leste was one of the biggest improvers, climbing 22 places to 101st place.

Somalia was perceived to be most corrupt country on the index for the second year running, sharing the dubious honour with war-ravaged South Sudan.

Lack of federal anti-corruption body 'a big gap'

Professor Brown said changes in Australia to foreign bribery laws and the announcement of a new compliance body to oversee parliamentary entitlements were both positive moves, but did not go far enough.

"The big gap is in the lack of a federal anti-corruption agency to really cover the gaps that we know exist in terms of public officials and parliamentarians being covered by the right sort of oversight," Professor Brown said.

"I think our big problem has been the assumption that we don't need to make this investment because we don't have a very big problem relative to other countries."

Former AFP fraud investigator Peter Morris, now a partner at PPB Advisory, agreed that a federal anti-corruption body would improve Australia's international standing when it came to tackling corruption.

"I think that would go towards assisting the perceived efforts dealing with corruption in the public sector as well, so I think that would be a positive step also," Mr Morris said.

"There has been success at all the state based levels there, they have had some significant wins, and they're proving the worth of having a body such as that at all levels."

The stabilisation of Australia's position on the globally recognised index also follows changes to foreign bribery laws, which now make it an offence to destroy or conceal financial documents that relate to the payment of a bribe to foreign officials.

The changes, introduced in March last year, mean prosecutors are no longer required to prove a corrupt payment was made for a financial officer of a company to be found guilty of what is known as "false accounting".

Professor Brown said the changes targeting the private sector helped to send a message that Australia was serious about countering corruption globally.

China, Australia's largest trading partner finished 79th on this year's index highlighting the risks for local companies doing business in lucrative markets where bribery and corruption are commonplace.

A number of major corruption allegations have been levelled at Australian companies in recent years, including claims that Tabcorp paid bribes to the family of the Cambodia's strong-man Prime Minister Hun Sen in an effort to secure a lucrative online gambling license.

The allegations, first reported by Fairfax Media in March 2016, cost former Tabcorp chief executive Elmer Funke Kupper his job as the head of the Australian Securities Exchange.

The allegations are now the subject of an AFP investigation. Mr Funke Kupper denies the allegations.

Whistleblowers rewards should be 'on the table'

PPB's Peter Morris said Australia should increase protections for insiders who blow the whistle on corrupt behaviour and even consider financially rewarding whistleblowers who risked their careers to report wrongdoing.

"There's no silver bullet, but certainly I would say whistleblower rewards is one of the things that needs to be on the table both at a government level and at an organisational level," Mr Morris said.

"There's an almost complete lack of that type of reward system in Australia, and it does exist quite extensively overseas at both the private and a governmental level."

The calls for greater protection and compensation for whistleblowers come as it emerged a former senior compliance officer at Origin Energy, Sally McDow, launched legal action against her former employer alleging it victimised her and made her redundant after she raised concerns about safety and compliance at the company.

Origin Energy told Fairfax Media it would strongly fight Ms McDow's claims.

Companies should be allowed to pay fines to avoid prosecution

Transparency International's Professor Brown said the Australian Government should consider following the US and the UK's lead in implementing what are known as Deferred Prosecution Agreements (DPA) and Non Prosecution Agreements (NPA) in an effort to reduce foreign bribery and corruption.

The agreements allow companies to self-report corruption and avoid prosecution by cooperating with investigators and paying fines for corrupt behaviour.

"If they can avoid a prosecution by really cleaning up their own act then that's part of the discussion that needs to be had but again it's like part of a jigsaw, it's got a role to play, it won't be a silver bullet in and of itself," Professor Brown said.

"If it's not done properly it could be quite retrograde, so that's why we need to have a serious conversation and we're calling for a serious conversation at the national integrity conference that we've proposed."

Transparency International will hold a conference in March to discuss ways to strengthen Australia's anti-corruption policies.

Australia's largest miner, BHP Billiton, also supports the adoption of the agreements.

In a submission to an ongoing senate inquiry into foreign bribery, the company said NPAs were a more efficient and cost effective way to resolve complex investigations.

The mining giant recently paid a $US25 million fine to US regulators over hospitality it provided to government officials during the 2008 Beijing Olympics.

Under Australian law, such a deal with regulators would not have been available to the company had a case against it been pursued by authorities.

A spokesperson for the AFP said it was investigating 22 foreign bribery allegations and it had established new fraud and anti-corruption teams in Sydney, Melbourne and Perth to combat the crime type.

Related Story: Australia perceived as 'more corrupt', urged to 'ramp up' effort on foreign bribery

Source : http://www.abc.net.au/news/2017-01-25/australia-fails-to-improve-ranking-in-global-corruption-index/8212226