McGrathNicol’s Financial Crime Exchange (FCX) recently hosted a webinar highlighting the growing menace of corruption in global business. The webinar followed release of the Transparency International Corruption Perceptions (CPI) Index Report 2020 earlier this year.
The webinar heard from an expert panel: Serena Lillywhite, CEO Transparency International Australia’ Tim Robinson, Chief Compliance Officer, BHP; and Robin Tarr, Partner, McGrathNicol. The moderator was McGrathNicol Partner and TIA Board member Siobhan Hennessy.
The UN estimates USD 2.6 trillion is paid in bribes annually equivalent to five per cent of the world’s GDP resulting in:
- inflated prices for the supply of goods or services;
- sub-standard delivery of infrastructure projects (some ultimately failing as a result); and
- diversion of funds from desperately needed community purposes.
The panel agreed that, in spite of significant effort on the part of Governments, NGOs and multi-national corporations, corruption continues to have a devastating impact on the world’s most vulnerable people. The panel discussed new corruption opportunities created by the COVID-19 pandemic through diversion of funding allocated to pandemic control programs.
So what is the answer?
Governments and NGOs including Transparency International can only do so much. Stamping out corruption is largely an issue for ‘bribe payers’, multinational corporations who actively (or passively via third party intermediaries) engage in bribery and corruption in order to gain or maintain a competitive advantage in developing economies. Global corporations need to take a stand on foreign bribery and go beyond minimalist compliance with foreign bribery legislation by:
- Having (and living) a strong anti-corruption statement which is ‘cascaded’ throughout the organisation particularly in off-shore operations
- Implementing ‘corruption disruption’ strategies that tackles the root cause of corruption in the countries in which they operate
- Embracing a zero tolerance anti-corruption policy and follow-through with that policy when corruption events occur
- Opening channels of communication internally and externally so that corruption suspicions can be raised and investigated