The Corruption and Bribery Levels in Australias Corporate World - Case Study Example

SUSTАINАBLЕ INTЕRNАTIОNАL BUSINЕSS FUTURЕS Name: Course: Professor: University: City: Date: Sustainable International Business Futures Introduction Every year, corruption reports are released in different countries showing the trend in which issues such as corruption and bribery have been progressing. Countries such as Denmark and Sweden have shown to be among the countries that have constant increase in the rate of corruption and bribery in the different sectors. The prevalent state of bribery and corruption in other countries has owed to the fact that the government has failed to ascertain that the policies and laws it has put in place will be followed strictly (Barr & Serra 2010). Among the most affected areas is the business sector that has experienced constant evaluation and audits based on alleged corruption schemes. Therefore, this analysis intends on evaluating the corruption and bribery levels in Australia’s corporate world and determines whether the laws regarding such issues offer any remedy. Australia has experienced increased rate of corruption and bribery in the corporate sector with more companies having to face the wrath of the law. From reports released by Transparency International, Australia’s reputation has fallen from being a corrupt-free nation into a corrupt country (Knight 2016). The drop owes to the failure of most organizations and companies to take note of the effects that bribery may cause to its economy. Although the corporate world has experienced massive changes in the number of emerging companies that have pitched camp in Australia, the need to evaluate the increasing cases of bribery is imminent (Tiffen & Gittins 2004). Discussion Question One Most businesses desire to develop and carry out any business activities based on the laws and policies that have been set. BHP Billiton is among the major companies in Australia that focus on production and manufacture of oil ore, metallurgical coal, copper and uranium. The company has gained massive popularity in different countries owing to the vast sales and marketing skills it employs during business. Although it has emerged as one of the most successful mining companies, BHP Billiton has often been under evaluation for taking part in corruption and bribery at different levels to acquire business deals and avoid different evaluations by the business controllers. Among the charges the company has faced is the $US25m fine that hit the company over corruption allegations (Ryan 2015). In the allegations, BHP Billiton apparently violated the Foreign Corrupt Practices Act when it was engaged in a relationship with the government to foster business regulatory affairs. Although the company failed to plead guilty of the charges, it agreed to pay the fines due but displayed their dissatisfaction in the way the US Department of Justice handled the case (Ryan 2015). Fostering relationships with potential groups or people tends to improve on how business is performed. Once a supplier or consumer feels safe about taking up a business deal, it is impossible to change their decision. In this case, BHP Billiton from a sustainable business perspective was not ethically wrong to offer hospitality to the people who would affect its business operations. As much as BHP Billiton invited the government officials and other consumers and suppliers to the Olympics, the company was not ethically wrong considering the unknowing nature of the implications. Although the invitation was not a scapegoat to any bribe, BHP Billiton failed to follow the admissible procedures that pertained to the invite. Arguably, the company needed to take necessary precautions such as training their staff regarding the risks involved in engaging with the government officials (Ryan 2015). Businesses need to ensure that they stick to the laws and policies that are related to business associates. In this case, BHP Billiton believed that the ethical basis for the invite was to foster relationships with the stakeholders oblivious of the process rules that are to be followed. As much as the company took up the consequences that came with the activity, they are bound to act ethically through ensuring that they create a monitoring program that will prove effective in detecting criminal and other fraudulent activities. This is done through availing an audit team that will establish all options and ensure the participants of such a hospitality activity are aware of the situation. It is through this that BHP Billiton will be able to defend its stand even through a corruption allegation. BHP Billiton threatened its reputation from employing substandard business practices and failing to act within the ethical limitations in the business field. However, the company assured the US Department of Justice that it intends on evaluating the internal controls that correspond with the ethical perspective in hospitality to government agencies. They argued against any plea not to offer government officials, suppliers and other consumer hospitality (Ryan 2015). As a highly regulated organization, BHP Billiton needs to establish an internal effective compliance and ethics program to detect any improper conduct by the employee staff or management. All this would be geared towards ensuring that the organization is geared towards ensuring the legal and ethical obligation that relates to corruption and bribery is covered (McDonald 2015). Furthermore, BHP Billiton’s ethical stand regarding offering any hospitality services to government officials may prove effective considering that it eliminates any possibility of conviction for corruption and bribery. Corruption and bribery describes unfair business practices that the consumer, government official or institution should be exposed. Failing to deal with such issues beforehand, tend to affect the business finances and reputation on the face of potential consumers. Australia lags behind when it comes to curbing malpractices in business such as corruption (In Carr & In Minns 2014). Therefore, building a reputation that solely eliminates such activities will spearhead any country towards business success. The public and the private sector need to be more conscious of the leaders and managers that handle sensitive business issues to ensure that they adhere to the policies regarding ethics (Ryan 2015). Reforms that foster better understanding on the potential ways and consequences that are related to corruption will enable companies such as BHP Billiton act within their limits. Nonetheless, as much as BHP Billiton was fined for alleged bribery through acts of hospitality, the credibility of the law should be evaluated regarding the people who accepted the invite. It would be ethically wrong to overlook one angle based on power and jurisdiction. Question Two With the increasing cases of bribery and corruption in Australia, it is possible that the country is likely to lose its reputation in the vast global market. Integrity is among the important factors that foster business interactions among countries. Australia has failed to ascertain the relate business countries that it is at the forefront of dealing with corporations, government agencies and businesses that take part in illegal regional and international trade (Hoy 2014). Once the government and business controllers fail to recognize the effects that corruption and bribery bring to the economy of most countries, it will be impossible to carry out any business dealings that result to limited trade. A breach of this integrity would alter the purpose of multinational trade that is to steer free and fair trade. It is likely that the business relationship with other countries will change considering there would be a difference in objectives. Adhering to the international standards in business dealings shows that a country or business is competent enough to be part of the global market. However, Australia with a staunch reputation of constant events of corruption is likely to show that the country is unable to adhere to the international policies (Bowman & Gilligan 2007). Their attitude towards corruption may be considered as ambivalent as even the government is involved in a certain amount (Hoy 2014). Cooperation with such a nation in the international scene is likely to cost a countries economy owing to the large amounts of finances lost through bribery. To some, it may take less to follow the set rules regarding various dealings but most companies take up the contrary as a measure of ascertaining a business deals. Such financial exploits may be used at different levels of business such as increasing incentives. Corruption has become a rising culture in countries such as Australia and failure to counter this issue may cause a recession in the economy. Australia is considered among the fast growing and globalized nations that are at the forefront of most advancements. Therefore, potential investors may identify it as a good source for developing business. However, the investors are forced to part with extravagant amounts of finances to incorporate any business activities into the market (Sawer, Abjorensen & Larkin 2009). Some of the factors that encourage investors to pursue certain locations are the ability to ensure free and fair trade while implementing strict policies in business. Investors open the market for economic and business development. However, countries such as Australia are likely to lose their reputation to investors who have identified a need and gap in the market. An evaluation of the prosecutions that have emanated from cases of bribery and corruption shows that the people involved in such activities dominate over the law. Corrupt officials sweep off the number of incidences brought to the Australian Federal Police (Knight 2016). In this case, investors may lose interest terming it as a poor investment regardless of the calculated return. In the legal perspective, the Australian judicial system is likely to be questionable among the business countries associated with Australia. More often, business transactions may go bad or the possibility of fraud is imminent. In such cases, people rely on the judicial system to offer some sort of remedy through court trials or hearings. People who do not have the capability of matching to the costs of bribing officials are at a disadvantage of loosing the case. Arguably, Australia needs a more robust legislative and judicial system comprehensive enough to handle cases pertaining to corruption and bribery in the corporate sector (Lucica & Ani 2009). However, without this, companies are exposed to exploitation that tends to strain their financial ability much further. Australian police fail to launch domestic and international investigations on the corruption activities by dominating companies and agencies. Therefore, they are likely to lose their reputation as a fast growing business country. Values and ethics are an important part of business as they ascertain the consumers of complete integrity and concern for their welfare. Australia fails to ascertain ethical responsibility in most of its activities in the corporate realm as in the case of facilitation payment. Government officials are required to adhere to the values as stipulated in their code of conduct where they are required to act diligently and serve without any facilitation. However, in Australia, the payment is mandatory if any person desires to get service. This act is likely to cause Australia its reputation because it will eliminate the sole purpose of government officials, which is free, and fair service to all. Although the payments are in small amounts, the frequency of payment is warranting and costs businesses and other people a great deal. Question Three With the rising state of corruption and bribery in the corporate scene, Australia needs to overhaul its anti-corruption laws that will ensure multinational corporations are ethically responsible. Government officials that are conscious of the implications that corruption and bribery have in Australia have issued a stand firm on the importance of reviewing the laws that manage such issues. They have offered their opinions regarding adopting regulations that apply in the United States arguing on the functional and implementation aspect they pose. Among the policies that are likely to steer an improvement in the ethical behavior of multinational companies include the broadening of foreign offences covered in the Australian Criminal Code Legislation that incorporate the private sector. Previously, the law covered the extensive effects that bribery had on the public sector. Similarly, Australia needs to develop a strict penalty for people who are found guilty of corruption offences (McCusker 2006). Australia needs to provide a different approach for companies that are at a risk of experiencing corruption at the face of government officials. This will ensure that the companies are ethically responsible for their actions and the law meets any violations. Australia with an aim of achieving an ethically responsible structure in business need to adopt a culture of compliance in its criminal code that will warrant multinational companies to direct their activities towards ethical realization. An evaluation of the corruption and bribery incidences in Australia showed that most of the crimes were committed under the supervision of a senior officer. A culture of compliance will assist companies to come up with an anti-corruption program that educates the officials and staff in various companies on the crimes regarding corruption (Cameron et al. 2009). This will assist the companies to focus on improving their ethical perspective and approach towards business. Mitigating aspects of control and compliance are also among the policies and procedures that are to be included in the compliance programs to provide guidelines on the procedures of approaching corruption and bribery. The removal of the facilitation payment procedure that is vaguely considered a policy would provide a better approach to corruption and bribery. With the removal of this procedure, companies and agencies are able to carry out and report issues to the necessary authority for action to be taken. A change in the defiance would provide companies the opportunity to manage their assets and books with careful scrutiny allowing auditors the opportunity to determine malpractices with reduced procedures. Similarly, officials and business people who face a rough patch in the hands of the government officials should be offered protection as they seek amendments in the law. They will be able to engage in ethical business practices without any discrimination (McDonald 2015). Such people with a review of the anti-corruption laws should experience reduced sentence in the court of law. It will encourage more business people to take up whistle blowing. Australia needs to be conscious to determine that corruption and bribery offers illegal businesses and malpractices the opportunity to creep into the economy and an explosion in such areas is likely to cost the country. Conclusion Corruption and bribery prevent most multinational businesses from realizing a sustainable business future. Although the prevalence extends across different nations and countries, corruption in Australia warrants immediate attention considering the positioning of the country in the economy. Practicing business ethics is not wanting. The policies that have been put in place to cater for issues of bribery and corruption need to be followed aggressively by organizations if they are to achieve the ethical objective. It is the role of every business stakeholder to uphold ethical practices that will see them experience smooth processes at expected financial costs. As much as Australia may seek to pursue ethical practices, it needs to evaluate the implementation structures that are in place to deal with alleged and occurred instances of corruption. The Australian Federal Police need to act precisely and competently while carrying out investigations that will provide insight on corruption allegations. Australia needs to display a sole commitment to transparency in business with the incorporation of internal and external controls will help businesses cover threats and risks involved with corruption as in the case of BHP Billiton. ReferencesTop of ForTop of FormTop of Form Top of Form Top of Form Top of Form Top of Form Top of Form Bottom of Form Barr, A, & Serra, D 2010. Corruption and culture: An experimental analysis, Journal of Public Economics, 94, 11, 862-869.Top of Form Bowman, D, & Gilligan, G 2007. Public awareness of corruption in Australia, Journal of Financial Crime, 14, 4, 438-452. Cameron, L, Chaudhuri, A, Erkal, N, & Gangadharan, L 2009. Propensities to engage in and punish corrupt behavior: Experimental evidence from Australia, India, Indonesia and Singapore, Journal of Public Economics, 93, 7, 843-851.Top of Form Hoy, G 2014. Australia 'failing' to tackle bribery by multinationals, ABC News. Retrieved 26 September 2016, from http://www.abc.net.au/news/2014-01-06/australia-accused-of-failing-to-tackle-bribery-among-multinatio/5187070.Top of Form In Carr, B, & In Minns, J 2014. Australia and Latin America: Challenges and opportunities in the new millennium, Canberra ACT, Australia : Australian National University Press.Top of Form Knight, E 2016. 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