When conversations turn to corruption, it is often in the context of foreign jurisdictions and the risks confronting Australian companies and groups operating in these higher risk economies. Australia is a relatively clean country, especially by comparison to some of our largest trading partners such as China, India and Indonesia. However, a continuing number of high profile domestic allegations and convictions highlight the need to be more cautious and aware of the corrupt conduct that is occurring within our own borders. The individuals identified to be complicit in this conduct have been Federal and State elected officials and senior executives within Government Departments and statutory authorities. This conduct includes, but has not been limited to, conflicts of interest, partiality, bribery, extortion, procurement fraud, financial misreporting and misappropriation. The effects of corrupt conduct can be terminal on the confidence the community holds in its local, state or federal government.
Australia is dragging its heels
Corruption is estimated to cost the global economy $3.6 trillion a year and has the potential to:
- Bring catastrophic harm to economic development;
- Undermine good governance and the rule of law;
- Negatively impact service quality and efficiency; and
- Pose threats to the principles of democracy, justice and the economy.
From a local perspective, and according to Transparency International, Australia’s Corruption Perception Index (‘CPI’) rank has remained outside of the Top 10 for the fourth year in a row. The CPI ranks 180 countries from 0 (highly corrupt) to 100 (very clean) and measures the perceived level of public sector corruption within that specific country. Australia has been criticised domestically and abroad for its apparent inaction in regards to its commitment to implementing anti-corruption measures. Transparency International has specifically identified Australia as a “decliner” in relation to its ability to significantly control corruption occurring within its public sector institutions.
Desire, intent, plan & commit
Corrupt behaviour starts with the ‘desire’ to achieve a private or professional goal through their position within the public sector. This goal may be attributed to the organisational culture of their current employer and the messages emanating from the top in regards to ethics, integrity and transparency. The culture and tone within an organisation is a key influencing factor on how employees act within the organisation. It is expected that public sector senior executives and management express an observable commitment to controlling corruption and have a ‘zero tolerance’ towards anyone engaging in corrupt conduct.
The desire of an individual is transformed into an intent to act corruptly and once this intention is formed, the corrupt action is planned and the final details about when, where, how and the duration of the corrupt action is determined to commit the act. A person’s apparent control over their corrupt behaviour is higher if:
- The risk of being caught is low;
- The expected response to the conduct is minimal; and
- There are immaterial or minor transaction costs incurred to commit the act.
This highlights the ability of offenders to commit such crimes when the internal controls (three lines of defence) within an organisation are poor or ineffective, the organisation does not appropriately investigate matters of alleged misconduct nor does the organisation communicate regularly with its staff to raise awareness in respect of the key risks and threats of corrupt activity.
Once a corrupt action has been undertaken, individuals use different tactics to justify or rationalise their conduct. Using these tactics, people view themselves as an ethical individual, clearing their conscience and providing further justification to engage in additional corrupt activities. People use their past actions as benchmarks when they evaluate new actions, that is, once a practice becomes routine, people consider it to be as part of their day to day business.