Business corruption risks rising
The Berlin-based group on Tuesday released its latest corruption perception index, which ranks 177 countries based on their perceived level of public sector corruption.
South-East Asian countries including Vietnam, Cambodia, Laos, Myanmar and the Philippines ranked poorly on the list, as did African countries such as the Democratic Republic of the Congo and Mozambique. Mongolia and Kazakhstan, where a number of Australian mining companies including Rio Tinto operate, also ranked poorly, at 83 and 140 respectively.
Transparency International spokesman Tom McLeod said companies operating in these regions put themselves at greater risk of fraud or misconduct, particularly miners that operated global supply chains across a number of high-risk jurisdictions.
"Miners take resources out of the ground in West Africa and sell it to western China," he said.
"You're on a boat going through the Middle East. You're pretty much ticking every box of high-risk transaction."
Somalia, Iraq and Afghanistan were among the lowest-ranked countries on the index. New Zealand and Denmark were ranked the
highest.
China, where Australian companies increasingly do business, was ranked at 80.
Fairfax Media revealed in October that senior executives inside construction firm Leighton allegedly oversaw multimillion-dollar bribes in Iraq, Indonesia, Malaysia and other countries.
The company alerted authorities to problems in Iraq and is currently being investigated by the Australian Federal Police and the Australian Securities and Investments Commission.
Mr McLeod said Australian companies needed to prepare for greater regulation in the area of foreign corruption and bribery.
"We are starting to have global jurisdiction in corruption," he said.
"That's the way it is heading."
Frequently Asked Questions about this Article…
Australian companies are at risk of corruption due to their significant presence in countries that are prone to bribery, as highlighted by Transparency International. These regions often have high levels of public sector corruption, increasing the risk for businesses operating there.
Countries in South-East Asia like Vietnam, Cambodia, Laos, Myanmar, and the Philippines, as well as African nations such as the Democratic Republic of the Congo and Mozambique, are considered high-risk for corruption. Mongolia and Kazakhstan, where many Australian mining companies operate, also rank poorly on the corruption perception index.
Operating in high-risk countries exposes Australian mining companies to greater risks of fraud and misconduct. These companies often manage global supply chains that pass through multiple high-risk jurisdictions, increasing their vulnerability to corrupt practices.
Recent allegations have been made against the construction firm Leighton, where senior executives allegedly oversaw multimillion-dollar bribes in countries like Iraq, Indonesia, and Malaysia. These allegations have led to investigations by the Australian Federal Police and the Australian Securities and Investments Commission.
Australian companies should prepare for greater regulation in foreign corruption and bribery. This involves implementing robust compliance programs and staying informed about global jurisdiction trends in corruption to mitigate risks effectively.
The move towards global jurisdiction in corruption means that Australian businesses need to be more vigilant and compliant with international anti-corruption laws. This trend indicates a tightening of regulations and increased scrutiny on business practices worldwide.
Transparency International plays a crucial role in assessing corruption risks by releasing the corruption perception index, which ranks countries based on their perceived levels of public sector corruption. This index helps businesses identify high-risk regions and make informed decisions.
According to the latest corruption perception index, New Zealand and Denmark are ranked the highest, indicating low levels of public sector corruption. On the other hand, Somalia, Iraq, and Afghanistan are among the lowest-ranked countries, suggesting high corruption levels.
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