Posted 15/10/2014 by Genevieve Butler
Ahead of the Group of Twenty (G20) meeting in Brisbane in November, G20 engagement groups are calling for the countries involved to take strategic anti-corruption and integrity action.
Australia is the current chair of the G20, which was set up in 1999 in the aftermath of the Asian financial crisis. Australia’s host year will culminate in a Leaders' Summit in Brisbane on 15-16 November 2014.
G20 engagement groups—civil society (C20), business (B20), labour movement (L20), young people (Y20) and thinktanks (T20)—are recommending that anti-corruption measures remain at the forefront of G20 action plans.
The proposed 2014-2015 priorities include transparency of corporate ownership, foreign bribery and other corruption law enforcement and whistleblower protection.
The G20 Anti-Corruption Working Group was established in 2010 in response to the massive impact of corruption on economic growth. The OECD estimates that corruption consumes more than five percent of global GDP annually, costing the world over $3 trillion. ‘It is not only a question of ethics; we simply cannot afford such waste,’ the organisation notes.
Corruption hampers economic growth and economic resilience, threatens the integrity of markets, erodes fair competition, distorts resource allocation, undermines the rule of law and destroys public trust.
Australia has played a key role in the G20’s efforts to combat corruption. It helped develop the G20 Anti-Corruption Action Plan, which includes stronger measures to prevent corruption-related money laundering, stronger international legal cooperation, and denial of visas and safe haven to corrupt leaders.
Australia is the co-chair of the G20 Anti-Corruption Working Group, which has a mandate until November 2014. With the mandate about to expire, engagement groups and anti-corruption experts are assessing the priorities going forward.
In a Parliamentary Library Lecture on 3 September 2014, Professor A. J. Brown, program leader for Public Integrity & Anti-Corruption at Griffith University’s Centre of Governance and Public Policy, said that the anti-corruption, transparency and integrity work of the G20 was pivotal to the G20 objectives of economic growth and economic resilience.
‘The anti-corruption work of the G20 focuses on issues that are of vital importance to Australia domestically, not just reputationally, but to actually preventing and containing corruption and corruption-risks in Australia,’ he said.
Professor Brown outlined several priority policy actions Australia could pursue both domestically and internationally:
- Transparency of corporate ownership
This involves overcoming the ease with which ‘shell’ companies are created, bought and sold around the world as anonymous vehicles for moving and hiding the proceeds of corruption.
According to Transparency International, ‘shell companies, secrecy jurisdictions and opaque corporate ownership structures represent the primary methods used by corrupt individuals to hide and stow away their stolen funds.’ One of the main loopholes in efforts to fight money laundering is that corporation laws in many countries do not require people forming a company to report who ultimately controls it.
- Foreign Bribery Law Reform
Targeting the bribery of government officials by corporations operating in foreign countries has particular significance for Australia, due to the Securency Australia and Note Printing Australia Ltd scandals.
In Australia it is a defence to an allegation of bribery of foreign officials that the payments were legal ‘facilitation payments’. Attorney-General George Brandis has said that this defence is under active consideration with a view to law reform.
Whistleblowing rules and systems are a strategic tool for improving prudential oversight, corporate governance and the rule of law.
Assessments of whistleblower protection in Australia have looked at both the public and private sectors. One of the biggest gaps in both sectors is clear statutory frameworks for internal disclosure procedures to encourage whistleblowing and make it work effectively, Professor Brown said.
The recent Senate Economics References Committee Report on the Performance of the Australian Security and Investments Commission included a chapter on whistleblower protection for the private sector. ‘Overwhelmingly, those witnesses who addressed the issue of Australia's corporate whistleblower framework were of the view that reform was needed in the area,’ the report found.
- Open Government partnership
Australia is committed to the Open Government Partnership, an international platform for domestic reformers working to make their governments more open, accountable, and responsive to citizens.
- Extractive Industries Transparency Initiative
The Extractive Industries Transparency Initiative is a global coalition of governments, companies and civil society working to improve openness and accountable management of revenues from natural resources. Australia is not a member but has provided strong financial support, and has been piloting participation in the initiative.
- Anti-corruption agencies, Parliamentary Integrity and political finance regimes
Significant developments include the new Fraud and Anti-Corruption Centre within the Australian Federal Police, which was designed to address gaps in the Commonwealth anti-corruption system. However, Professor Brown noted that there were still some remaining gaps.
‘Questions to do with our political finance and parliamentary integrity regimes are big issues and problems, not just for Australia but worldwide, which we need to figure out how to solve,’ he said.
Professor Brown said these were areas in which the Commonwealth Government and Parliament could continue to build on the anti-corruption progress of the past few years.