Corruption and integrity issues

Cat Barker, Foreign Affairs, Defence and Security

Key Issue
Corruption and integrity issues remained in the spotlight during the last two parliaments amid continued revelations of corrupt conduct and misconduct across various sectors.
Issues for the new parliament will include continued consideration of a national integrity commission and other potential agencies, improvements to foreign bribery and public interest disclosure laws, and Australia’s international obligations.

Australia continues to be perceived as one of the least corrupt countries in the world. Its score of 79/100 in Transparency International’s latest Corruption Perceptions Index gave it a ranking of 13 out of 168 countries. However, its decline on this index in recent years (from a score of 85 and a rank of seven in 2012), and continued revelations of corrupt conduct in the public and private sectors and some unions, highlight the need for continued attention to Australia’s anti-corruption and integrity framework.

Public sector and parliamentary integrity

Unlike each of the Australian states, which have established dedicated standing anti-corruption agencies, the Commonwealth has taken a multi-agency approach to combating corruption within or affecting the public sector. Within this system, a range of agencies have complementary roles. These include promoting integrity across the public service and investigating misconduct (Australian Public Service Commission), detecting and investigating law enforcement-related corruption issues (Australian Commission for Law Enforcement Integrity (ACLEI)) and preventing, detecting and investigating serious corruption that may constitute an offence under Commonwealth law (Australian Federal Police (AFP)).

Recent measures to improve public sector integrity have tended to focus on law enforcement, border protection and immigration agencies, which face particular corruption risks due to the nature of their work. ACLEI’s jurisdiction has gradually expanded since it began operations in 2007, most recently to include the Department of Immigration and Border Protection (DIBP) from July 2015. The Australian Customs and Border Protection Service (now the Australian Border Force, part of the DIBP) commenced reforms in 2013 to improve integrity and better combat corruption that have since been rolled out across the DIBP as part of its professional standards framework.

The Parliamentary Joint Committee on the ACLEI recommended in May 2016 that ACLEI’s jurisdiction be further expanded to include the whole of the Department of Agriculture and Water Resources, and that an independent assessment be undertaken to determine whether ACLEI should also oversee the Australian Taxation Office. The Government-chaired committee considered it preferable for ACLEI to retain its law enforcement focus instead of being expanded into an agency with anti-corruption oversight of the whole public sector. However, it was open to ‘further examination of the advantages and disadvantages of a broad-based federal anti-corruption agency’.

The Senate Select Committee on the Establishment of a National Integrity Commission was established in February 2016 to consider that very issue. However, it was only able to produce an interim report ahead of the dissolution of the Senate in May 2016. Citing shortcomings in the existing framework in addition to risks and challenges, the majority recommended in that report that the Government support research into potential anti-corruption systems appropriate for Australia. In additional comments, Coalition Senators disagreed that any shortcomings had been demonstrated. Shortly before the election, the Leader of the Opposition stated that the Australian Labor Party would reconvene the Committee if it won government.

The proposal to establish a national integrity commission along the lines of those operating in the states have resurfaced periodically since the 1980s. While it does not have unanimous support, it has been backed by several prominent anti-corruption experts and organisations. The Australian Greens introduced legislation to establish such a commission in 2010, 2012 and 2013. The 2013 Bill was the first to be debated, in 2014 and 2015, but it was not voted on.

Debate on a possible national integrity commission has included discussion of parliamentary standards and ethics. There are currently codes of conduct covering ministers and parliamentary secretaries, ministerial staff and lobbyists, but no code covering Members of Parliament. At the end of the 43rd Parliament, the House of Representatives endorsed a draft code of conduct, but did not consider the proposed changes to Standing Orders and resolutions required to give effect to the code before the House was dissolved in August 2013. The Senate did not endorse a code of conduct as ‘a meaningful and workable method of addressing parliamentary standards’. The issue was not considered during the 44th Parliament. Recent proposals by legal academics, the Greens and other crossbenchers have included a code of conduct covering all Members of Parliament, an independent parliamentary ethics adviser, and a Parliamentary Integrity Commissioner to investigate breaches of the code.

Foreign bribery

Australia moved relatively quickly to ratify the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (Anti-Bribery Convention) and implement it domestically through legislation. However, Australia has lagged behind other countries in its enforcement of the Convention. Increased priority and resources given to foreign bribery investigations since 2013 appear to be having some impact. However, the issue has been of continued interest to the Parliament. An inquiry commenced by the Senate Economics References Committee in June 2015 had not yet reported at the time of the dissolution of the Senate in May 2016.

Australia’s first prosecutions for foreign bribery were initiated in July 2011. In 2012, the OECD expressed serious concern at the low level of enforcement action in Australia and included a long list of recommendations in an evaluation of Australia’s compliance with the Anti-Bribery Convention. Australia has since stepped up its efforts. This has included the AFP reopening several previously finalised investigations, entering into a memorandum of understanding with the Australian Securities and Investments Commission (ASIC) and establishing the interagency Fraud and Anti-Corruption Centre. Legislation has also been enhanced with the Parliament passing amendments in 2015 and 2016 to clarify the scope of foreign bribery offences and create new false accounting offences, respectively.

As at April 2016, there were 18 active foreign bribery cases, including two before the courts and four with the Commonwealth Director of Public Prosecutions. Foreign bribery cases tend to be complex and lengthy, so increased enforcement can take some time to produce results.

The Senate Economics References Committee was considering, amongst other things, whether alternative or additional enforcement options such as those used in the United Kingdom and United States should be adopted in Australia. These include, for example, deferred prosecution agreements (on which the Government also released a consultation paper in March 2016) and suspension or exclusion from eligibility for government contracts on the basis of corrupt conduct.

Registered organisations

The Royal Commission into Trade Union Governance and Corruption reported in December 2015 and made 79 recommendations for policy and legal reforms. The Commission identified ‘widespread misconduct’ and made 93 referrals for possible legal proceedings against individuals, unions, companies and a charitable organisation. Taskforce Heracles, a joint federal and state police taskforce initially attached to the Royal Commission, was extended to the end of 2016 to continue investigating the potential criminal matters referred by the Commission and any related allegations.

It is likely that the new parliament will be asked to consider legislation proposed by the Government to respond to the Commission’s findings, in particular, Bills to re-establish the Australian Building and Construction Commission, establish a Registered Organisations Commission and introduce a significantly expanded penalty regime for breaches of duties by officers of registered organisations (which include unions). The repeated rejection of the relevant Bills by the Senate in the 44th Parliament provided the double dissolution trigger for the 2016 federal election.

Public interest disclosure (whistleblowing) schemes

Laws to facilitate disclosure of misconduct and other wrongdoing, and to protect those making such disclosures, are an important component of a broader integrity framework.

The public interest disclosure scheme that applies to the Commonwealth public sector was updated and considerably expanded in 2013, with the changes taking effect from January 2014. The former head of ACLEI, Philip Moss, completed a statutory review of the scheme’s operation and provided a report to the Government in July 2016. The Public Interest Disclosure Act 2013 requires that the Government table the report in parliament within 15 sitting days.

Legislative protections for private sector whistleblowers in Australia, first introduced in 2004, are much less comprehensive than the public sector scheme and not often used. Treasury released an options paper on the issue in 2009, but the review was discontinued in 2010.

In its June 2014 report on the performance of ASIC, the Opposition-chaired Senate Economics References Committee made several recommendations about improving protections for corporate whistleblowers. They included immediate legislative amendments to expand the scope of the whistleblower provisions in the Corporations Act 2001 and a broader review with a view to further enhancements that would bring protections afforded to private sector employees into line with their public sector counterparts. In its October 2014 response, the Government noted the recommendations and stated that ASIC had agreed to set up an Office of the Whistleblower. The Office has since been established, but the other recommendations do not appear to have been addressed.

Perhaps due to the lack of government action, the Senate Economics References Committee released an issues paper in April 2016 as part of its inquiry into scrutiny of financial advice, seeking submissions on several possible improvements to the current framework. That inquiry lapsed upon dissolution of the Senate in May 2016.

International engagement

G20 corruption agenda

The Anti-Corruption Working Group has been preparing the 2017–18 G20 Anti-Corruption Implementation Plan for endorsement at the September 2016 Leaders’ Summit in Hangzhou. China has flagged anti-corruption measures as a priority for its presidency, particularly the development of principles on tracking down high-level fugitives and establishing a research centre on fugitives and stolen assets. As part of its latest anti-corruption campaign, China has pushed for greater cooperation from other countries, including Australia, in repatriating persons alleged to have engaged in corruption, and their assets.

A proposed extradition treaty between Australia and China was tabled in parliament on 2 March 2016. The Joint Standing Committee on Treaties commenced consideration of the treaty, but its inquiry lapsed upon the dissolution of parliament in May 2016.

Open Government Partnership

The Turnbull Coalition Government and the former Labor Government both committed to finalising Australia’s membership of the Open Government Partnership as soon as practicable. Australia was due to finalise its membership in July 2016, but preparation of the required National Action Plan was put on hold when the election was called.

UN Convention against Corruption

Assessments of compliance with the United Nations Convention against Corruption take place over review cycles. A summary of findings on Australia’s compliance with the chapters on criminalisation and law enforcement and international cooperation was released in June 2012. The findings were largely positive, but also identified several areas for improvement, including whistleblower protections and development of a national, anti-corruption plan (which was underway at the time, but did not eventuate). A review of Australia’s compliance with the chapters on preventative measures and asset recovery is due to begin in 2017–18.

Further reading

C Barker, ‘Corruption and integrity issues in Australia—are we heeding the lessons from the past?’, Off the Shelf, Parliamentary Library, Canberra, March 2014.

OECD Working Group on Bribery, Australia: Follow-up to the Phase 3 report and recommendations, OECD, April 2015.

Senate Select Committee on the Establishment of a National Integrity Commission, Interim report, The Senate, Canberra, May 2016.

Transparency International Australia (TIA), ‘Australian political parties out-of-step with voters’, TIA website, 2016.


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