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PM PUTS POLITICS BEFORE POLICY

Thursday 30 January 2014

MEDIA RELEASE
30 JANUARY 2014

Prime Minister Tony Abbott has moved quickly to investigate claims of rife bribery and corruption in the building industry. On Wednesday, he announced a possible Royal Commission into union activity specifically. It raises the question, if issues of corruption and bribery are now a priority of the government, why stop with the unions?

The joint investigation from the ABC and Fairfax on the building industry, includes some damning allegations that warrant close scrutiny from law enforcement agencies. Yet more worryingly, it is just the latest in a recent spate of stories that highlight the fact Australia’s reputation for doing business in a clean and transparent manner is slipping.

To this point in time, the Government, and indeed the last Government in its final days, has remained largely silent on the issue of bribery and corruption. The chance to build political capital against Mr Abbott’s union adversaries and former Australian Workers Union boss, now Opposition Leader, Bill Shorten, has enlivened the Government’s interest in corrupt practices within Australia.

This is welcomed by the GRC Institute and we applaud any move by the Government to tackle bribery and corruption. Yet it would be a shame and to Australia’s great detriment if the focus remains purely on union activity. A narrow Royal Commission Inquiry into the unions may prove nothing more than a costly political point scoring exercise, particularly considering there is already stalled legislative reforms in place that addresses many of the issues highlighted by the building industry scandal.

The previous government outlined plans to create a National Anti-Corruption Plan as well as remove the fGRCIlitation payments defence contained within the Commonwealth Code. After the initial public consultation concluded almost 2 years ago, no further action has been taken by either side of politics.

Australia is now lagging many of its international peers on bribery legislation. The UK Bribery Act was introduced in 2010, while Canada followed with similar legislation last year and Brazil has introduced a Clean Companies Act this year. Meanwhile the US Department of Justice has led the international crack-down with several large enforcement actions, while even China has begun to take the issue seriously since the leadership change last March, with several pharmaceutical companies fGRCIng stiff penalties.

The Australian legislative initiatives have fallen off the radar, just as our reputation has begun to slip internationally. Transparency International (TI) released its annual ranking of countries by perceived risk of corruption occurring late last year and Australia had slipped from 7th to 9th. In addition the OECD handed down a very critical report on Australia's anti-corruption efforts in the past 12 months.

These international reports are consistent with the number of high profile cases over the last 12 months. It is not just the unions and the building industry involved. Others cases have included the RBA’s embarrassing Securency woes, Leighton's Holdings bribery and sanction violation allegations and the suspended mining leases involving former NSW Ministers Eddie Obeid and Ian McDonald.

Hopefully, these revelations prove to be the catalyst the Prime Minister and Attorney-General, George Brandis, needs to finally take some action to support efforts to remove the risk of corruption from Australia’s business environment.

To date international pressure and an increasing number of home grown corruption issues has failed to pique the interest of the Government.  Now that he has an opportunity to play politics and put the boot into the union movement, the government may finally have the impetus to revive the stalled legislation that tackles this very issue.

For further information, contact Martin Tolar, Managing Director, the GRC Institute on P +61 2 9290 1788, M + 61 416 012 162 or email martin.tolar@thegrcinstitute.org

ABOUT THE GRC INSTITUTE

Established in 1996, the GRC Institute’s (formerly GRCI) mission is to be the preeminent body for compliance and enterprise risk management professionals across the Asia PGRCIfic region. We provide leadership and advocacy on behalf of our members, with a strong focus on the development of their expertise in business governance practices that support the achievement of their organisation's objectives. With events held across Australia, Hong Kong, New Zealand and Singapore, GRCI aims to unify and strengthen the above disciplines to provide a community in which individuals can come together to share ideas and mould their vision for the future.