Ethical Standards of the Construction, Infrastructure, Mining and Concession Group - Case Study Example

Name: Name of instructor: Institution: Course Title: Subject Date: Introduction CIMIC (Construction, Infrastructure, Mining and Concession) formerly the Leighton Holdings was found in 1949 by an Englishman named Stanley Leighton. It started as a civil engineering, telecommunication, resource and mining, environmental services, property and building, and construction company. The company's subsequent restructure and Leighton's acquisition by ACS, a Spanish construction group, lead to the change of the business's name to CIMICS. This change resulted in the representation of a more profound purpose and services of the company as well as gave support to the new model's operating transformation. The company has filled several cases of corruption and bribe activities to oversea countries to be granted contracts. As a result, the Australian Investigation commissioners and Securities in conjunction with the federal police investigated on corruption cases on the Leighton Holding Company’s deals before the ACS took over. Some of its executives had to be executed due to bribe allegations linked to the Iraq oil pipeline contract where million dollars were unaccounted for their use. Other corruption charges were recorded when Munro, the Thiess Division manager, was demanded by Indian police. He was accused of cheating a coal business partner in the multi-dollar deal. Despite Australia being a signatory to the world’s Anti-bribery convention organization, its companies record high cases of corruption where they make offshore payments to secure contracts. The World Bank gives records of billions of dollars squandered on bribe scenarios to the public officials for maximum gain in their business transactions. Ethical standards of the CIMIC group as in Article 1 The CIMIC group’s ethical standards differ from the standards of practice documented on the 1st section of codes of ethics. The 1st joint practice of practice recommends the realtor to stay obligated by the duties imposed by the Code. The CIMIC Group follows the legalized facilitation payments in Australia for it business profitability. They give practice corruption through bribing under cover of "facilitated payment." They not only disadvantage their competitors but also the country as well. In the 2nd standard practice of the code, CIMIC Group is expected to perform the imposed duties of the code of ethics. Contrary, a duty it obligates. A realtor is restricted from misleading the clients with an intent of securing a listing as documented in the 3rd standard of practice. In contrast, the CIMIC Group bribed the middlemen who were part of the bold strategy for influencing the prime minister of Iraq and other Iraq officers with millions of dollars to get over 1.4 billion dollars in a contract on the oilfield. More millions were paid to Indian officials as a token for cover up of the bribing case. (Australia, 2007, pp. 127) Leighton is also found to have paid facilitated payment and kickbacks to several overseas contracts and his former executive, Mr. Gregg signed a 15 million dollar bribe offshore to an Asian Global project and trading which is a Dubai firm. The payments were made in favor for steel supply to Indian Laundry Company that laundered Iraq money previously. The steel was also to be used in an Australian construction company at commercially and preferred benefiting prices. According to Gregg’s defense, he claims the payment to be legitimate for facilitation of steel supply despite there being no iron acquired or delivered. This act by the group is contrary to the 4th standard of practice as denoted in the code of ethics that realtors should not mislead buyers to any benefits realizable through dealer's services or savings Dr. Kirstin, an Australian member of ABC board and a businesswoman, did not provide protection to a worker who raised the alarm over corruption scandals in the CIMIC Group's company. The servant was instead thrown out of the Thiess in the year 2014. This was documented in a newspaper by the Fairfax media in the link at (https://theconversation.com/lax-rules-boost-risk-of-organised-crime-snaring-government-contracts-44292). The confidential inquiry report on internal corruption which had bribe claims involving CIMIC Group and Thiess was then destroyed. This act by Dr. Kirstin was against the standard of practice as recorded in the code of ethics which demanded security to client and realtors. They are not to be disadvantaged for their honest in reporting cases of corruption and bribery. 1.3 million dollars are paid to Syam, an Indian agent who is found corrupt, by the Thiess as revealed by an Indian court file. This was done so that Syam could drop a bribery case or complaint which was raised against Thiess based on allegations that the CIMIC firm had defrauded him. This contributed to the increase in corruption risks in the country and a lot of money used in a no benefiting way to the state. Against the 8th standard of practice, which covers obtainment of an advice of legal counsel if questions on termination of a pre-existing contract, the company covered itself up by corrupting the officials handling their crime case in their favor to proceed with getting the contracts. (Australia, 2008, pp. 79) Remedies for CIMIC Group’s reputation restoration There are several possible actions that CIMIC Group should take as an initiative to restore its reputation and continue with its activities as an ethical corporate participant, both internationally and locally. These actions are mainly based on transparency, truancy, and anti-corruption. The executive officers need to be trained on truancy and transparency as those participating in corrupt activities be sucked from the organization. (https://www.theguardian.com/commentisfree/2017/feb/02/corporate-corruption-and-government-failure-to-act-whos-running-this-country). This initiative can build the Group's reputation thus many clients entrusting the agency with their projects and contracts. Rebranding the company is a remedy towards acquiring its reputation again. This should include sucking the executive officers who were ever caught with corruption cases and replace them with workers with proper codes of conduct. Change of the brand's logo and name should be included in the rebranding process. This gives a new impression ant attitude to the clients and contractors who had known then organization for a corruption zone to a better crime independent agency. In addition to this, changes and amendments to the already existing objectives are to be made. This could rank the company into a better servicing platform to its clients thus continuing to perform as a decent corporate player internationally and locally. (McGraw, 2010, pp. 394-396) The Group’s constitution needs to be adjusted as an increase in law enforcers be made who have to work under high supervision. This will reduce the cases where the police officers participate in bribe taking. Strict repercussions have to be faced by he who is caught either attending or not reporting corruption cases to the respective department. This will reduce the amount of money squandered in corruption practices. (Lingard, 2008, pp. 351) Also, the Group’s servants and workers need to be vigilant on bribe incidents which are mostly fueled by the corrupt police officers. Therefore training to the employees has to be organized to sensitize them on the effects of corruptions as well as the remedies towards corruption malpractice. They are also to be given the list of respective institutions to report all bribery or facilitation fee demands which are against the law. It is worker's responsibility to raise the alarm when faced by corrupt business partners and law enforcers. This will give the company good conduct practices which will market the organization better. As a result, the company is most likely to be in a better position for good paying contracts and projects. This will lead to an increase in their profitability curve thus increasing the chances for the company to grow adversely and launch its branches in other countries or continents. (McGraw, 2010, pp. 402) The CIMIC's capabilities can be in high demand internationally due to their excellent choice of Geographical position and the many opportunities in the markets. These geographic locations include Australia, New South Wales, North Sydney, South East Asia, New Zealand and the Middle East. In these areas, there is the availability of resources to their mining and processing industries, and since most of them are still developing in infrastructure, there are contracts of building and constructions as well. As documented in, (http://www.smh.com.au/business/comment-and-analysis/major-concerns-over-australian-corporate-corruption-but-convictions-few-20160331-gnv8ap.html ) Besides, more organizations with similar objectives as the Fairfax media, which brought on board the hidden corruption scenes, should be formed in support from the Australian government. It will push the company to monitor its servants, clients and official’s progress. This is to ensure no news lease off to the nation for their gross misconduct and law-breaking through corruption malpractices. Therefore the group will gain trust from other agencies thus a process of its reputation's restoration. The group needs to expand the capabilities that existed in adjacent market and services CIMIC Group has to continue strengthening its existing capabilities and fairly win the work shares in mining, constructing, processing of minerals, service and Public Private Partnership (PPP) and building a dynamic and competitive position for the Group. This can be achieved through offering the best quality services in comparison to other groups with similar objectives. Opening its branches internationally for easy access by the clients as well as modifying the quality of their products can help CIMIC restore its reputation. This is achieved by development and expansion of the services offered by the group through opportunity securing and finding benefit from complementary activities in market areas. This can apply either in Australia’s marketplaces or new geographical regions like America, Canada, and any other continents. (http://www.canberratimes.com.au/national/public-service/the-growing-case-for-a-federal-anticorruption-agency-20160427-gofwyo.html).CIMIC Group needs to get training on its new media tool-kits. This will reduce friction thus less time taken for their activities. The CIMIC Group need to invent, invest on and adopt the latest advertising soft wares and formulate new blogs and design for its products. Use the widely visited sites and highly viewed international programs will help the group continue and improve its performance internationally. Displaying attractive designs and arts of their services, mining, building, construction of roads, dams, bridges, borehole, etc., mineral processing among other activities calls for increased number of contracts awards internationally and locally. (Engineer, 2007, pp. 47) Making the MNCs responsible and compliant ethically Australia needs to overhaul its anticorruption laws to make MNCs more ethically compliant and reliable. The MNC stands for the Multinational corporations, which provoked debates on social justice and efficiency issues. The surge in inequality on economic growth has brought about a series of economic rights implications in the developing countries. To exert pressure on MNC, the lawsuits based on civil war and media exposure are entirely applicable despite the actions seeming private. Australia has many cases of corruption and bribery, but very few convictions are recorded over the same. As recorded in (http://www.abc.net.au/news/2014-01-06/australia-accused-of-failing-to-tackle-bribery-among-multinatio/5187070). These cases epitomize detrimental acts thus affecting the success and strength of the company adversely. It also represents an obstacle to the growth and stability of investor's long-term values. A sharp decrease in company's share cost and International criticism has accompanied allegations and incidents of corruption practices which have brought about a decline in the country's financial strength. As documented in (Afzal, 2017, pp.109), companies involved in such cases like the CIMIC Group's company are characterized by molecular processes of governance, inability to monitor and implement successfully its codes of conduct and the internal processes' failure to protect stakeholder's integrity. As the Australian companies are growing, so are the corruption risks increasing too. This is as a result of the introduction of penalties and strikers regulations on bribery, and corporate corruption can be a way of eradicating the increasing risks to Australia’s economy. Alternatively, the host country offers minimal protection to operators from foreign countries due to its weak and volatile governance. The country needs to overtake its anti-corruption organizations by reinforcing the signed laws against corruption. To make MNCs responsible and compliant ethically, the compliance standards must be met as well as complying with regulations and the laws. More penalty should be amended from the ten year imprisonment for bribery and corruption crimes. The police are at low risk of being corrupt. They are entrusted by the surveyed executives in the business field and file several cases of crime and violence too. Public services are also at a lower risk of being corrupt in Australia. Therefore the private services record a high risk of participating in corrupt activities. Thus foreign and domestic companies in Australia experience flexibility to maximum in the process of licensing as a result of firm rules of the law which protects companies from corruption crimes and risks. Conclusion The OCED had to suggest that AFP’s investigations should not be closed prematurely. (http://www.smh.com.au/business/comment-and-analysis/major-concerns-over-australian-corporate-corruption-but-convictions-few-20160331-gnv8ap.html) And they took a swipe on the pathetic records of enforcement at Australia. From the office of Transparency International, an Anti-corruption Organization, it is recorded the Australia had improved in recording fewer corruption cases for three consecutive years. The Federal Police in Australia is said to be under-resourced to handle complex and volume potential cases. The Australian government has to reinforce its laws and adhere to all the laws binding them with other countries. For maximum profit and economic growth of Australia, some vices practiced by businessmen and company holders need to me eradicated. Some of these vices being corruption, bribery, giving of facilitating fee to hasten services illegally. The court also needs to handle and judge all cases presented to them. Not taking the bribe and withdrawing cases for the prosecuted. This results in the disadvantage to those who report the cases. As a result, many will opt not to report any irregularity to the respective sectors in fear of the repercussions in cases of withdrawal of the case. The consequences may involve assassination as well as the retrenchment from work. More media agencies need to be formed to not only air Australia’s crime scenes but any other country. This will significantly impact the growth of the third world countries to the first growing countries. Is also results to the availability of many resources which are currently limited and job opportunities to many qualified citizens who are locked out of their profession due to the corrupt status of the world. Reference list Afzal, F., Lim, B. and Prasad, D., 2017. An investigation of corporate approaches to sustainability in the construction industry. Australia, A.C.C.A., 2008. Anti-bribery and corruption reporting disclosures. Australia, S., 2007. Code of ethics. Education Department of South Australia Lingard, H., Blismas, N., and Stewart, P., 2008. Corporate social responsibility in the Australian construction industry. Corporate Social Responsibility in the Construction Industry, p.351. Engineer, L.F.A.A., 2007. Rebuilding Afghanistan One Mud-brick At A Time. Point Blank, p.47 McGraw, P. and Dabski, S., 2010. Corporate Social Responsibility Reporting in Australia's Largest Companies. Labour & Industry: a journal of the social and economic relations of work, 21(1), pp.390-409. http://www.canberratimes.com.au/national/public-service/the-growing-case-for-a-federal-anticorruption-agency-20160427-gofwyo.html). https://theconversation.com/lax-rules-boost-risk-of-organised-crime-snaring-government-contracts-44292). http://www.abc.net.au/news/2014-01-06/australia-accused-of-failing-to-tackle-bribery-among-multinatio/5187070). Read More