Australia’s efforts to combat corruption are frequently assessed with the publication of Transparency International’s Corruption Perceptions Index (CPI). Despite maintaining a score of 75 out of 100, which ranks Australia 14th out of 180 countries, there is a pressing need for sustained efforts to address underlying vulnerabilities within the country's integrity framework. This article provides a comprehensive overview of Australia’s anti-corruption initiatives and their implications in the global context.
Understanding the Corruption Perceptions Index
The CPI ranks countries based on their perceived levels of public-sector corruption, offering insights gleaned from assessments by independent experts and business professionals. With scores ranging from 0 to 100, countries are positioned on a spectrum from highly corrupt to very clean, providing a benchmark for evaluating corruption risks.
Australia’s Anti-Corruption Endeavors
Despite Australia’s consistent CPI score, several noteworthy developments have shaped its integrity landscape in recent times:
National Anti-Corruption Commission (NACC)
The establishment of the NACC in July 2023 marked a significant milestone in Australia's anti-corruption efforts. Empowered to detect, investigate and report on serious or systemic corrupt conduct in the Australian Government public sector, the NACC has already received numerous referrals, signalling a proactive approach to tackling corruption at the highest levels.
Combatting Foreign Bribery (CFB) Bill
The recently passed Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023 aims to hold corporations accountable for foreign bribery perpetrated by their agents. The bill, passed by the Senate on 29 February 2024, introduces a new 'failure to prevent' foreign bribery offence for body corporates. Furthermore, it expands the existing foreign bribery offence by broadening the category of public officials and the range of conduct it covers. This legislative initiative underscores Australia’s commitment to combatting transnational corruption in alignment with international standards. However, unlike its two unsuccessful predecessors, the bill does not include a Deferred Prosecution Agreement (DPA) scheme. This sets the new Australian regime apart from the approach taken in the United Kingdom and the United States.
In the UK, specifically, DPAs are accessible for violations of its 'failure to prevent' offence, further motivating companies to voluntarily disclose suspected foreign bribery and collaborate with regulators. Nevertheless, many are optimistic that such a regime will be implemented as the bill progresses.
Preparing for the CFB Bill
The CFB Bill requires that the Attorney General provide guidance on adequate procedures with draft material released in 2019 - Draft Guidance.
Interestingly, 'failure to prevent' will not apply 'if the body corporate can show it had adequate procedures in place designed to prevent a foreign bribery offence being committed'. While there is currently no determination of 'adequate procedures' the scalability of this concept means that requirements will likely vary depending on factors such as the nature of the body corporate and its operating sector and location.
In light of that, companies should consider:
Refreshing risk assessments to evaluate their bribery risk profile.
Reviewing anti-bribery and corruption policies to ensure they address new compliance risks effectively.
Implement anti-bribery due diligence procedures before establishing new business and supplier relationships.
Establish effective reporting and complaint mechanisms for stakeholders to raise concerns about bribery risks, accompanied by an efficient response system for investigating those concerns.
Update anti-bribery training and increase awareness of new requirements.
Whistleblower Reforms
Recent amendments to the Public Interest Disclosure Act 2013 (Cth) demonstrate Australia's commitment to enhancing protections for public sector whistleblowers. Further consultations are underway to address existing complexities in the whistleblower framework, with a focus on establishing independent oversight mechanisms to safeguard whistleblowers' interests.
Strengthening Anti-Money Laundering Laws
Proposed reforms to Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime seek to modernise existing laws and extend regulatory oversight to non-financial sectors. These reforms aim to bolster Australia’s resilience against illicit financial activities and enhance cooperation with global stakeholders.
Enhancing Political Donation Transparency
The Joint Standing Committee on Electoral Matters (JSCEM) inquiry into political donation laws reflects Australia’s commitment to fostering transparency in electoral financing. Recommendations to lower disclosure thresholds and introduce real-time disclosure mechanisms underscore the government’s resolve to mitigate undue influence in the political sphere.
Lobbying Reform
The Lobbying (Improving Government Honesty and Trust) Bill 2023 endeavours to strengthen Australia’s lobbying regulations by expanding the scope of the Lobbyists Register and imposing stricter disclosure requirements. These measures aim to enhance transparency and accountability in government decision-making processes.
Australia in the Global Context
Against the backdrop of global trends, Australia’s CPI score remains relatively stable. However, continued vigilance is warranted, especially amid emerging challenges and geopolitical dynamics. As Australia navigates its economic partnerships with key trading partners, the CPI serves as a critical reference point for assessing corruption risks and fostering ethical business practices.
Looking Ahead
As Australia embarks on a path of reform to fortify its anti-corruption framework, the forthcoming years promise to be pivotal in shaping the country’s standing on the global integrity stage. While the efficacy of some of these reforms remains to be seen, stakeholders across sectors must remain engaged and proactive in upholding the principles of transparency, accountability, and ethical governance.
How we can help
With our extensive experience in corruption mitigation and investigations, RiskWise offers comprehensive support in enhancing internal and external controls within your organisation. Contact us today to speak with one of our specialist consultants.
Author: RiskWise Director Matt Truelove is a highly experienced investigator and advisor with over 15 years of experience leading complex investigations as a former Detective in the NSW Police Force, specialising in organised crime and counter-terrorism. Following this, Matt worked as a Senior Investigator at the Australian Criminal Intelligence Commission (ACIC), where he led numerous high-profile domestic and international operations targeting issues of transnational serious organised crime (TSOC), fraud, and corruption at the highest levels.