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Corruption and the AWB.

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Thursday 9 February 2006

Michael Ahrens, Executive Director, Transparency International


Corruption and the AWB  


I have found that the widespread media coverage of the dealings by the Australian Wheat Board with the former Iraqi regime under the oil-for-food sanctions program has, in fact, given great impetus to our cause in tackling corruption. 


We at Transparency define corruption as the abuse of entrusted power for private gain; this means that decisions in government are taken not for public benefit, but to serve private interests. 


Backhanders and bribes are bad enough in the private sector, where they lead not to competition based on price and quality, but, to the opposite - to competition to bribe the most. That is, a race to the bottom. 


Where politicians and officials regularly take suitcases of money the effects are even more pernicious. 


Democratic institutions are then weakened and we see a clear loss of trust and legitimacy in the system. 


Politicians are then viewed as businessmen, in power in order to maximise their own profit and that of their families. This leads to the Poverty Graft Trap. 


We are realists, however. While we can prevent companies continuing on a “business-as-usual” basis, we do acknowledge that we will not live to see bribery and corruption eradicated. 


That does not excuse us from the challenge of tackling it hard, wherever we can. That is all of us. 


The plight of the poor in developing countries, especially those which are rich in natural resources, such as oil, diamonds and gold, will never be relieved while corrupt politicians and officials prosper. 


Of course, the poor are not alone to suffer. The wanton destruction of tropical rainforests, from the Amazon to Papua New Guinea, at the hands of morally bankrupt logging companies and with the connivance of corrupt officials, is a reminder of the broader costs of corruption. 


By pure coincidence, on the same day as the inquiry into the Australian Wheat Board began, the OECD Working Group report on the state of enforcement of Australia’s laws which prohibit the bribery of foreign officials was launched.  


The report criticised the fact that in the six years since those laws were enacted as part of the OECD treaty commitment, no prosecutions have been launched in Australia. 


It made a number of recommendations to toughen the penalties and the enforcement processes. In fact, it gives us an interesting insight into how the system in Canberra currently works. 


I do feel confident that the government will act on this report. It does seem as if steps are already underway in Canberra to raise the whole issue of anti-bribery enforcement into the “high impact” category, and make the processes work better. 


We are proud of our good reputation in terms of overseas dealings. This reputation is currently at stake, and I think that this accounts for much of the interest in the Australian Wheat Board inquiry. 


Australia still ranks eighth out of the 159 countries in the Corruption Perceptions Index which Transparency last published. In fact, in 2002 Australian companies were perceived as the least likely to pay bribes in emerging markets. 


Now, the Howard Government has shown by its emphasis on governance in the recently approved Pacific Plan and the high percentage of foreign aid presently earmarked for governance and capacity building that they do take the issue of corruption very seriously. 


We will need to show our neighbours and the sceptics watching from Asia that we are able to deal with scandals and do what is necessary to cleanse our own house. 


Transparency’s view is that this is a critical time for our country. I am sure we are not alone in this. 


Finally, might I end on a note of real optimism. Curiously, this negative publicity could be a valuable opportunity for Australia to act to enhance our image and influence in the region. 


Why is this? We have tended at times to be seen as adopting a rather superior, “cleaner than thou” preaching Western attitude to the issue of corruption in sending our message abroad. 


I have even seen commentators refer to the real risk that Australia may be viewed in some Pacific Islands as something of a bully, so that the delivery of our funding and training to combat corruption is impeded or even resisted. That would be very unfortunate if it is so. 


Insofar as that view may have infiltrated, we can counter it. By openly recognising that we also have problems which need to be tackled and how difficult they can be, we can seize this opportunity to join more effectively in a common struggle against corruption in our region.  


Guests on this program:

Michael Ahrens  

Executive Director 

Transparency International Australia