Overview of Corruption in Australia - Assignment Example

Overview of Corruption in Australia: Name: Course: Instructor: Date: Introduction Many states globally today rank corruption as first among the other drawbacks of economic developments. According to Brown, Wood and Hogan (2012, p.17), corruption refers to a form of dishonest and unethical demeanor by an individual or a group of people entrusted with a given position of authority to receive a given personal benefit. Corrupt dealings may include many activities such as bribery and embezzlement of funds by a person entrusted with custody (Corduneanu-Huci, Hamilton and Ferrer, 2013, p.19). Corruption may also involve practices that are rendered legal in some countries. This unacceptable code of conduct may also occur in governmental offices when a given leaders accept bribes or misuse funds bestowed upon him or her in the office; this may also be called political corruption. Even though African states take the lead in this league, Many European nations are also not free from this economic threat. It is a major drawback in Economic development, Political stability and even deteriorates social status of a country (Eicher, 2013, p.89). The fight against corruption should l be a united effort by both the government and the private sector in a country. In most cases, the governments have been left as the flag bearers in fighting this issue, and no results have been attained. Corruption starts with an individual and it’s a joint responsibility of all the Citizens to realize the negative aspects of corruption and put a stop on it. The spirited fight against this behavior from all the sectors will help countries like Australia and others who are still held in this threat move a step in overcoming it (Thompson & Maginn, 2012, p.23). The government and corruption Australia is not an exception of these states where corruption has taken a center stage (Graham and Stroup, n.d.). With the reputation sliding from 80 to 79 on a scale of 0 to 100, Australia is considered as one of those European countries which are always dropping in rank according to the annual global report on corruption released (Thompson & Maginn, 2012, p.31). Can we attach some reasons to the government and business practices? To a greater extent government and politics may boost corruption even with democracy (Saint-Martin and Thompson, 2006, p.65). A formal democratic system of governance does not guarantee a society to be free from corruption. Petty and simple corruption tends to be far less widespread in strong autonomous systems with more open systems of operations and governance, but one can still find sufficient examples of political corruption at elevated levels or of money influencing national politics (Manacorda, Centonze & Forti, 2014, P.95). These may include scandals linking questionable government and party financing, the selling of political power to the principal donors, and politicians using connections to line their campaign stocks. Campaign financing has not been an open agenda in Australia. Several reforms on campaign finance continue to be a subject of much discussion in Australia, where the electorate remains anxious about distinct moneyed interests having a great undue influence over the legislators (Trautman, and Altenbaumer-Price, (n.d.). Not only on party finance does corruption exist but also in other branches of politics. In Australia, some politicians have turned their offices a corruption den. They give big donations that they can’t account for from their salaries. It has been taken as a normal occurrence, and even the people expect such monies without questioning their sources. In this case, the politician is left with no otherwise other than to look for an unclear way of raising funds to finance this even if it is through corruption (Findlay, Odgers & Yeo, 2014, p.09). Government -Business on corruption. Business operations are the major driving blocks of a nation economy. It is an informal and formal aspect of the economy. Corruption has a direct influence on the size of the informal economy. It upsurges the cost of creating new businesses and staying in operation in the formal sector. Unofficial payments and irregularity of their size and regularity drive the costs and risks so high that the entrepreneurs and businesspeople prefer to undertake their businesses underground to avoid bribes that they have to incur for services such as startup, registration, licensing, and operation permits (Homel, Lewis and Ransley, 2010, p.51). Corruption in other social services makes them more expensive and leads to the creation of substitute services in the informal sector. Corruption at elevated levels of government such as the capture of the state by conferred interests has even a more deep impact on the degree of informality in the countries’ economies: it forms large barriers to entry by creating a limited competitive business environment and increases business risks by increasing the level of unpredictability of government policies (Findlay, Odgers & Yeo, 2014, p.49). Many businesses also try to evade tax. This evation happens in two significant ways. The first one is through the dishonest government officials who prefer to receive small bribes through shortcuts. The business owners feel they are maximizing their profits by reducing their tax liability hence participating actively. How corrupt dealings affect foreign businesses and investors. Foreign investors play a significant role in the development of a nation. They bring funds and also bridge the provision of vital services and primary products to the citizen of the country. The foreign direct investment are affected both directly and indirect with the corrupt dealings of the government and citizen of that country. Bribery and corruption are progressively a matter of concern for many multinational companies, especially when they are seeking to invest in “high-risk” jurisdictions or investments. Historically, the primary concern in this area has always been the exposure to civil and criminal consequences for flouting of anti-bribery and corruption legislation (Michalik, and Budziński, 2009, p.112). However, the past decade has seen a growing positive trend towards governmental expropriation of investments alleged to have been obtained through bribery and corruption dealings. This aspect poses a substantial additional risk to foreign businesses. Investors who are found to have directly or indirectly engaged in corrupt acts will have trouble defending against expropriation or seeking compensation for expropriation that may otherwise have been obtainable under either public or domestic international law (Rotberg, 2009, p.69). Corruption will also affect the quality of services these multinational would provide to the country (Rose-Ackerman, 2009, p.119). For example, if a foreign company is given a construction contract after incurring higher costs to acquire that deal, it will be forced to cater for that amount in the contract and this result in poor or substandard construction. The Australian government has many times issued statements that any foreign company found engaging in corrupt dealings shall be barred from operating businesses in the country. Unfortunately, in many undocumented cases, government officials may take reactive action against an investor for failing to pay a bribe. With companies fearing these penalties, they accept to give bribes to safeguard their operations in the country (Findlay, Odgers & Yeo, 2014, p.13). Many traditional beliefs and perception in some minor jurisdictions that a bribe or “facilitation payment” is an ordinary, customary and necessary part of business dealings, such payments can put the investor at the notion of the host government (Miller, Grødeland and Koshechkina, 2011, p.73). Even though corruption is only seen to affect the host country or government, investors should also be aware of how this unethical conducts may affect their businesses. Investors should know that the legal sanctions brought about by anti-bribery legislation in a range of jurisdictions in most nations including Australia and the United States, a transaction an investment agreement procured or implemented through corrupt dealings may be rendered null and void (Findlay, Odgers & Yeo, 2014, 53). Upon the establishment that the agreement or right was obtained through ‘illegal’ or improper Avenue, the right or contract can be canceled under local law and the investor cannot enforce for any payment of compensation through court action. The investor may not obtain any assistance from the international law or the doctrine of clean hands in case of any contract cancellation after proof of bribery or corruption (Morris and McGann, 2010, p.35). A government which tacitly receives bribes in exchange for opportunities to investors may be considered less likely to raise corruption or bribery as a primary reason for canceling the contract or rights granted. However, foreign investors who have indulged in local malpractice of bribery may be exposed to high risk if the social or political climate turns against such conducts (Mauro, 2010, p.41). It would be my advice that foreign investors and businesses must remain vigilant on corruption and anti-bribery compliance. They should also be aware of the defenses that they have at their disposal about corruption on investment treaties for unfair state conduct that breaches the international operation standards. The steps Australian government requires to take to stop the slide and make both public and private sector operators more ethically responsible in their activities locally and internationally. Offer better salary in government jobs: Poor salary in government offices facilitate the issue of bribery and corruption. Many government employees in lower positions like clerks, office staff, receive a lower salary. Hence, they expect to make extra money from other avenues like bribery. To accomplish this, they try to delay the work for so long that many clients get fed up and opt for bribes for progress in the work. If their salary could be raised, they will not need to try raising extra cash through bribes, and this will reduce corruption (Matsumoto, 2011, p.53). Apply job rotation and increase number of workers. The number of government employees is low in Australia. This lower number lead to employees being overwhelmed by the customers they need to serve to opt for a bribe as a selection procedure. Rotation in the job will also enhance internal control in the government offices since different people are found in different locations at different point of time and reduce connections and ties that may facilitate corruption (Manacorda, Centonze & Forti, 2014, P.83). Pass legislation on dismissal if found corrupt This seems a good option. For example, if you see instances where anti-corruption bureau takes officers to his residence and finds disproportionate assets, the officer is suspended from office and handed in for proper judicial trials. But after a few years, you will find them in the same offices or even better positions. So this shows how the constitution has loopholes. Embrace new technologies especially in contracting and taxation: Technology has revolutionized how businesses are done. Payments can be made online to reduce instances where companies evade try to escape tax by cash payment after bribing officers (Gross, 2013, p.19). Application of contracts should be conducted online to enhance transparency in these contracts. In other words, the governments should opt for cashless transactions as much as possible. Install cameras in most government offices: Camera installation in government offices will ensure that unethical receipts of bribes in these offices are recorded on these cameras. Most of corrupt dealing go through and cannot be lawfully executed due to lack of evidence. Cameras will record these dealings and facilitate prosecution of these corrupt officers and bring them to book. Cameras also ensure that records of any officer trying to delay service to promote shady dealings and enhance prosecution. Cancel contracts obtained in bribes. The government should cancel contracts obtained through unethical practices by the companies. This will be a lesson, and it set a good precedent for other businesses that may be planning such. Conduct awareness campaigns on the dangers of corruption. The government should carry out an awareness campaign nationally to enlighten businesses and citizens in the dangers of corruption to economic development. This awareness will help reduce this menace and hence give the government an easy way of reducing corruption. Conclusion Many countries globally and Australia, in particular, are miles away in validating corruption-free societies and as stated among other things, the national political will and financial support from both central governments and international organizations have to be sacrosanct for the fight against corruption and bribes in particular to succeed (Hatchard, 2011, p.125). Corruption interferes with the reputation of a country (Green, 2012, p.131). As illustrate in the global report, Australia is lagging behind in the fight against this Economic threat. Corruption interferes with federal standards and social behaviors. Foreign direct investment is also interfered with since investors may also fear to invest in countries with unclear dealings due to corruption (Itō and Krueger, 2014, p.83). It is not only the government bestowed with the responsibility of fighting corruption. Corruption is fought by everyone regardless of the sector. Laws should be passed punishing corrupt officials and businesses as they take the lead in facilitating this unethical demeanor. If all the stakeholders come together in this fight, there is a bright future and Australia will move steps up in the ladder of corruption and help tame her image and reputation. References Brown, G., Wood, M. and Hogan, N. (2012). Understanding the securities laws, 2012. New York, NY: Practising Law Institute. Corduneanu-Huci, C., Hamilton, A. and Ferrer, I. (2013). Understanding policy change. Washington, D.C.: World Bank. Eicher, S. (2013). Corruption in international business. Farnham, England: Gower. FINDLAY, M., ODGERS, S., & YEO, S. M. H. (2014). Australian criminal justice. Graham, B., and Stroup, C. (n.d.). Cross-Border Mergers and Anti-Bribery Legislation. SSRN Electronic Journal. Green, M. (2012). Losing our democracy. Naperville, Ill.: Sourcebooks publications. Gross, M. (2013). A call for revolution. New York: Ballantine Books. Hatchard, J. (2011). Combating the Bribery of Foreign Public Officials: The Impact of the UK Bribery Act 2010. The Law and Development Review, 4(3). Homel, R., Lewis, C. and Ransley, J. (2010). The Fitzgerald Legacy. Bowen Hills, Qld: Australian Academic Press. Itō, T., and Krueger, A. (2014). Governance, regulation, and privatization in the Asia-Pacific Region. Chicago: University of Chicago Press. MANACORDA, S., CENTONZE, F., & FORTI, G. (2014). Preventing corporate corruption: the anti-bribery compliance model. http://dx.doi.org/10.1007/978-3-319-04480-4. Matsumoto, M. (2011). 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Planning Australia: an overview of urban and regional planning. Cambridge, Cambridge University Press. Trautman, L. and Altenbaumer-Price, K. (n.d.). Lawyers, Guns and Money – the Bribery Problem and U.K. Bribery Act 2010. SSRN Electronic Journal. Read More