Corruption at top of B20 agenda

The government’s B20 advisory forum has made corruption a core issue.

The government’s B20 advisory forum of corporate heavyweights has set up an anti-corruption group in a move aimed at making the issue a core part of the business agenda for creating jobs and building economic resilience.

The Australian can reveal that the outgoing global chairman of accounting firm KPMG, ­Michael Andrew, is co-chairing a transparency and anti-corruption working group with the chair of Italy’s biggest company, Eni, Giuseppe Recchi.

Many of the members on the group are in existing B20 taskforces — a move that means the issue will be critical to the recommendations across the four priority areas of human capital, infrastructure and investment, trade, and financing growth.

Last year, the Australian B20 came under fire for dropping corruption from its top priorities for 2014 after it announced that it would set up four taskforces, but without a stand-alone anti-corruption taskforce.

In 2013, Russia’s B20 had a stand-alone taskforce, while Mexico’s B20 in 2012 had a taskforce on improving transparency.

Mr Andrew, who was on the Russian taskforce last year, has been liaising with the taskforces to make sure the issue is front of mind.

He told The Australian that Telstra’s David Thodey (infrastructure and investment), GE’s Steve Sargent (human capital), ANZ’s Mike Smith (financing growth) and BHP Billiton’s ­Andrew Mackenzie (trade) were all “incredibly supportive of this being a core part of their ­agenda”.

Governments were increasingly cracking down of the issue and investors would now “vote with their feet”.

“Capital flows and trade flows will be very dependent upon investor confidence in markets that actually are seen to be enforcing and tackling this particular issue,” he said.

B20 Sherpa and former Mallesons chief executive Robert Milliner said while laws had been passed, “it’s clear that it’s practices and behaviours of countries and corporates”.

“This is one of those things where business and government both need to work together to create not only the rules and regulations, but also more importantly the cultures, behaviours and approaches that do it,” Mr Milliner said.

“Business can influence that in the way it responds to governments that don’t have these processes involved.”

The group has met once now and will hold a series of meetings in the lead-up to the July summit, when business leaders will discuss the B20’s recommendations to the G20.

In February, Attorney-General George Brandis told a meeting hosted by the G20 anti-corruption working group and the government that “combating corruption to achieve broader G20 goals of growth and global financial integrity ... remains more pressing than ever”.

“Despite promising signs of global economic recovery, the agenda still has a long way to go,” Senator Brandis said.

Yesterday, amid concerns raised by groups such as Transparency International that infrastructure projects can be prone to corruption, Mr Andrew said the B20 working group was looking at “issues like government procurement guidelines, making sure that when major infrastructure projects come up, there is transparency and integrity around the bidding process”.

“One of the additional costs that has been identified is the amount of facilitation payments and payments to accelerate processes ... having a situation where we can have a degree of disclosure and enforcement around that is incredibly important to efficient infrastructure creation.’’

On trade, he said the aim was a mechanism “by which we can surface examples of corruption, expose them and prosecute them with the support of all of the G20 governments”.

On finance, there were issues such as money laundering.

‘‘You’ve seen a lot of governments quite rightly introduce legislation specifically targeting those. We’ve got to take the best practice and make sure we have that as a uniform code around the world, so that businesses can enforce the efficiently across all borders.’’

And on human capital, he said: ‘‘We can introduce all the rules and regulations we like, but unless you train people as to what is ethical behaviour and make sure they fully understand what is the international criteria around these things, it’s very hard ultimately to make a cultural change.’’