Commonwealth Approach to Anti-Corruption

8/11/2019 Commonwealth Approach to Anti-Corruption

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The Commonwealths approach to

Ant i -Corrupt ion

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RELEASED UNDER THE FOI ACT 1982 BY THE ATTORNEY-GENERAL'S DEPARTMENT FOI-1


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Introduction 3

Background 4

Have Your Say 6

Representative Democracy 9

Multi-Agency Model 12

Strong, Modern Legislative Regime and Guidelines 16

Working in Partnership Commonwealth, State, Territory and Local Governments 20

Working in Partnership Civil Society and the Private Sector 21

Effective International Engagement 23

Table of Contents

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Introduction

Corruption is a corrosive global phenomenon that has a wide range of devastating impacts.It undermines democracy and the rule of law; discourages investment and distorts

markets; diverts resources from important services like schools, hospitals and roads; andprovides a breeding ground for organised crime and terrorism.

In combating corruption, the Australian Government seeks to adopt a cooperativeleadership role internationally, regionally and domestically.

At the international level, Australia is a party to both the United Nations Convention againstCorruption (UNCAC)and Organisation for Economic Co-operation and Development(OECD)Convention on Combating Bribery of Foreign Public Officials in International BusinessTransactions. Australia is a key member of the G20 Anti-Corruption Working Group, havingparticipated in the negotiation and development of the G20 Anti-Corruption Action Plan.Australia is also an active member of the Asia-Pacific Economic Cooperation (APEC)Anti-Corruption Working Group and the OECD Working Group on Bribery in InternationalBusiness Transactions.

At the regional level, Australia is committed to working bilaterally with partnergovernments to support their own efforts against corruption. Effective governance is one ofthe five key strategic goals of the Australian Governments aid program. Australia providesaround A$1 billion each year to assist partner countries to strengthen their governance andanti-corruption systems.

While Australia has a strong record of domestic action to prevent and expose corruptionin both the public and private sectors, the government is conscious that we must not

be complacent. In order to ensure Australia continues to be a leader in anti-corruptionactivities, the Australian Government announced the development of a NationalAnti-Corruption Plan in 2011.

The plan will present the Commonwealths approach to anti-corruption. In doing this,the plan will outline the comprehensive measures that are already in place across theCommonwealth to combat corruption as part of Australias multi-agency approachto corruption and identify national priorities in this field. The plan will also examinewhether the Commonwealths arrangements are adequate to combat existing andemerging corruption threats and align with international best practice. The plan willreflect the result of an extensive public consultation process and cooperation across all

levels of government.

The National Anti-Corruption Plan will ensure that the Commonwealth is well positioned toaddress emerging corruption risks and that anti-corruption initiatives are well coordinatedand targeted into the future.

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1. BACKGROUND

In September 2011, the Australian Government announced its intention to develop andimplement Australias first National Anti-Corruption Plan. A key objective of the plan is tostrengthen Australias existing governance arrangements by developing a Commonwealth

policy on anti-corruption. The plan brings all relevant Commonwealth agencies togetherunder a cohesive framework and strengthens the governments capacity to identify andaddress corruption risks.

Australia has a strong record of global, regional and domestic action to prevent and exposecorrupt activity. It was again ranked as the eighth least corrupt nation in the world in therecent Transparency International Corruption Perceptions Index. Recognising the need toensure better coordination of Australias anti-corruption efforts and to effectively addressemerging corruption risks, the Australian Government decided to develop aNational Anti-Corruption Plan. The plan not only draws together the significantanti-corruption initiatives and arrangements already in place within Australia, it recognises

that efforts to combat corruption must be shared between all levels of government, theprivate sector and civil society.

What is the purpose of the National Anti-Corruption Plan?

Around the world corruption continues to have a serious and harmful impact on society andindividuals lives. The recent upheavals in the Middle East and North Africa demonstratethe tragic and powerful role corruption plays in political instability and violence. WhileAustralia has a strong record of successfully tackling corruption, there are instances ofcorrupt conduct in both the public and private sectors.

The primary purpose of the National Anti-Corruption Plan is to develop a cohesiveframework to coordinate and guide anti-corruption activities in Australia. The plan will bestructured in three parts:

1. a comprehensive outline of existing Commonwealth arrangements to combatcorruption;

2. the results of a risk analysis of current and emerging corruption risks; and

3. a framework to ensure the plan is able to effectively address these risks into the future.

The plan will comprehensively outline the existing multi-jurisdictional approach to

anti-corruption. In Australia, a number of different agencies have specific responsibilitiesfor tackling corruption in different levels of government, and in relation to specific typesof corruption. For example, many states and territories have independent anti-corruptionbodies or are considering their establishment.

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At the Commonwealth level, a number of agencies or office holders have specific rolesin relation to corruption. For example, the Australian Commission for Law EnforcementIntegrity provides independent assurance to government about the integrity of the AustralianFederal Police, the Australian Customs and Border Protection Service and the AustralianCrime Commission. The Australian Public Service Commissioner is responsible for

promoting the Australian Public Service (APS) Values and Code of Conduct and evaluatingthe extent to which agencies uphold the APS Values and the adequacy of compliance withthe Code of Conduct. Among other things, the Code of Conduct states that agency headsand APS employees must not use their employment improperly for personal gain.

The plan will also examine the Commonwealths current anti-corruption arrangements andassess their adequacy in light of existing and emerging corruption risks. This assessmentof corruption risks will be informed by public submissions and risk-profiling activitiescurrently being undertaken. This evaluation will result in the development of an actionplan with proposals to ensure the Commonwealth can effectively tackle corruption risks inthe future.

The National Anti-Corruption Plan also meets a number of other important objectives,including:

improving Australias compliance with UNCAC and assisting with the review currentlyunderway of Australias compliance with the Convention;

providing guidance to government stakeholders and members of the public onAustralias approach to anti-corruption, including the roles and responsibilities ofrelevant agencies, and mechanisms for coordination across sectors;

identifying national priorities in the fight against corruption; and

addressing corruption risks identified in the Commonwealth Organised Crime StrategicFramework, and other relevant government reports such as those produced by theAustralian Crime Commission and the Auditor-General.

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What is corruption?

While definitions of corruption abound, a commonly agreed definition is the misuse ofentrusted power for private gain. It can take many forms and vary depending on localculture and context. For these reasons, the primary international instrument in this field,

the UNCAC, does not offer an agreed international definition.Corruption could be viewed as one end of a continuum of other undesirable behaviours,including maladministration and improper conduct. Identifying maladministration andimproper behaviour is important as these types of behaviour may indicate an increased riskof corruption, or may lead to the development of a corrupt culture. At the other end of thecontinuum is the highest standard of ethical behaviour. The table below is indicative of howparticular types of behaviour might be categorised but it is not intended to be definitive.

Highest Standards of Ethical Behaviour

Acting with honesty

Managing resources appropriately

Using powers responsibly

Explaining reasons for decisions

Striving to do things in the best possible way

Maladministration Improper Behaviour Corruption

Managing badly

Inefficiency

Bad judgement anddecisions

Incompetence

Lack of due process

Inappropriate personalbehaviour (e.g. harassment)

Misuse of governmentsystems

Misuse of governmentresources (could also becorruption)

Misuse of entrusted poweror office for private gain

Behaviour that may be administrative misconduct

Behaviour that may be criminal

Maladministration refers to the making of an official decision in a manner whichis inefficient, incompetent, contrary to law, arbitrary, unreasonable, without properjustification, lacking in procedural fairness, or made without due consideration of themerits of the matter. Maladministration may breach the APS Code of Conduct.

Improper behaviour can include inappropriate personal behaviour, misuse of governmentsystems or misuse of government resources. Improper behaviour may also breach the APSCode of Conduct.

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Corruption can occur on many levels, from small illicit payments as part of routinebureaucratic processes, to the large scale diversion of public resources to corruptindividuals. Corruption affects both the public and private sectors and can be facilitated bybribery, embezzlement, money-laundering, nepotism and cronyism.

How does corruption affect Australias national interests?Corruption has the potential to threaten a range of Australian Government interests, including:

Australias international reputation Corruption has the potential to undermineAustralias reputation for high standards of governance, robust law and justiceinstitutions, and transparent and fair markets. The 2012 Index of Economic Freedomfoundthat Australias judicial system operates independently and impartially, with consistentapplication of laws. Property rights and contract enforcement are very secure. Effectiveanti-corruption measures discourage bribery of public officials and uphold cleangovernment. However, even one corruption or bribery matter can damage Australias

international standing. For example, the Inquiry into certain Australian companies inrelation to the UN Oil-for-Food Programme(the Cole Inquiry, 2006) found that the adverseconsequences of the Australian Wheat Boards (AWB) bribery of Iraqi officials wereimmense. Trade with Iraq worth more than A$500 million per annum was forfeited,and AWB cast a shadow over Australias reputation in international trade. TransparencyInternational attributed this scandal to Australia temporarily losing its place in 2007 asone of the ten least corrupt countries in the world.i

National and global security The Australian Government identified serious andorganised crime as a national security priority in the Commonwealth Organised CrimeStrategic Framework.The framework identifies corruption as a major challenge in

addressing organised crime. Criminal networks actively seek out individuals withinlaw enforcement and other public sector entities to corruptly undertake and concealillicit activities, and to launder the proceeds of crime. Similarly, the Australian CrimeCommissions 2011 report, Organised Crime in Australia, analysed the internationalconvergence of corruption, political instability and violent extremism. This convergenceprovides an enabling environment for moving and exchanging drugs, arms, people,stolen or pirated goods and for funding criminal and extremist activities. The reportfound that states with high levels of corruption feature prominently among failed,failing and rogue states. Such states provide a base for both transnational organisedcrime and terrorist groups.

International development The UN General Assemblys 2010 report Keeping thepromise: united to achieve the Millennium Development Goalsemphasised that fightingcorruption is a high priority as corruption diverts resources away from poverty eradication,the fight against hunger and sustainable development. The World Banks Stolen AssetRecovery Initiative(StAR) estimated that developing countries lose between US$20 billionand US$40 billion each year to bribery, embezzlement, and other corrupt practices.

Domestic public sector governance and financial integrity Data from the mostrecently published Australian Public Service Commissioners State of the Service Reportshows the level of misconduct in the Australian Public Service continues to be low,with less than four in every 1,000 employees being found to have breached the APS

Code of Conduct.ii

Any instances of fraud, however, can be damaging to the AustralianGovernment, both financially and in terms of reputation.iii

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3. REPRESENTATIVE DEMOCRACY

Australia has a strong federal and democratic system of representative governmentthat is, government by representatives of the people who are chosen by the people. Thisfundamental principle is enshrined in the Australian Constitution and, together withindependent and impartial courts and non-partisan public services, provides a strongfoundation upon which anti-corruption measures can be built.

Respect for the rule of law, accountability and having the highest ethical standards are thefoundations of any democracy and provide the grounding for a society that is resilient tocorruption. Indeed, the Australian public rightly expects high standards of behaviour and ahigh level of performance from their government, public institutions and the business sector.

Our federal system of government has developed a comprehensive anti-corruption systemof checks and balances for both the public and private sectors. Continuing to ensure allelements of this system are appropriate and functioning effectively is critical to the success

of these efforts. This includes ensuring laws are appropriate and effectively enforced,ensuring the correct institutions and frameworks are in place, working in partnership acrossall sectors to ensure our efforts are coordinated, continuing to educate and innovate onanti-corruption measures, and ensuring continued political commitment to combatingcorruption.

In 2007, the Australian Government introduced new Standards of Ministerial Ethics,requiring Commonwealth ministers to conduct themselves to a high standard of conduct.The standards are underpinned by the principle that ministers and parliamentarysecretaries must act with due regard for integrity, fairness, accountability, responsibilityand the public interest ensuring that corrupt behaviour is not tolerated at the most senior

levels of national government.iv

Constitutional framework

Commonwealth legislative power

The Australian Constitution establishes a federal system in which legislative, executive andjudicial powers are shared or distributed between the Commonwealth and six states. It alsoenables the Commonwealth Parliament to make laws in relation to territories. There areten territories, of which three are self-governing.

The Constitution does not confer on the Commonwealth Parliament the power to makelaws on all subjects but lists subjects about which it can make laws. While the list ofpowers given to the Commonwealth Parliament does not expressly refer to corruption, theCommonwealth can rely on various heads of power to support laws designed to prevent andpunish corrupt conduct across a wide range of activities regulated by the Commonwealth.

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State legislative power

The states each have their own constitution, but these must be read subject to theAustralian Constitution. Except for a few matters, a state parliament can make laws on anysubject of relevance to that state. Accordingly, state parliaments can pass laws on a widerrange of subjects than the Commonwealth Parliament.

Criminal law

The Commonwealth Parliament does not have specific power with regard to criminal law.However, the Commonwealth can enact criminal laws relying on other powers, for examplethose that are expressly provided for under the Constitution. Commonwealth criminallegislation is primarily restricted to criminal activity against Commonwealth interests,officers or property or is directed at crimes with an international element such as thebribery of foreign officials.

Most criminal activity is governed by the laws of the states. This is true for offencesof corruption, including fraud and bribery. For example, in addition to regimes at theCommonwealth level, the states and territories have their own domestic fraud and briberyoffences, and supporting regimes such as proceeds of crime legislation.

The overlap between federal and state and territory criminal law does not cause difficultiesin practice, as the Commonwealth Parliament has vested state and territory courts withextensive jurisdiction to hear matters arising under federal law.

Separation of judicial power

The Australian Constitution embodies a strict separation of federal judicial power fromlegislative and executive power. Federal courts may only exercise judicial power andpower that is incidental to judicial power. The parliament and the executive governmentcannot exercise judicial power. This supports the rule of law and the independence ofjudges, helping to uphold public confidence in the administration of justice. The conduct ofAustralian judges is characterised by very high standards of impartiality.

Three levels of government

Australia is a federation and power is shared between three levels of government. Eachlevel of government is run by a democratically elected council or parliament. Local

government is a legislative responsibility of the states and territories and is recognised inthe constitution of each state. State parliaments determine the roles and responsibilities oflocal governments, and those responsibilities vary from state to state.

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Democratic institutions

Robust democratic institutions play an important part in promoting a fair and transparentsociety and combating corruption. Among these institutions are the following:

Parliamentary committeesParliamentary committees have an important

role in scrutinising government activity and proposed laws. For example,the Parliamentary Joint Committee on the Australian Commission for LawEnforcement Integrity was established in 2007 to examine trends and changes inlaw enforcement that relate to corruption. The committee is also empowered toexamine corruption in Australian Government agencies with a law enforcementfunction, as well as the integrity of staff members of those agencies.

A free mediaAustralia has a free and independent media, which can report onallegations of corrupt behaviour by public officials and the private sector.

Civil societyIntegrity agencies, academia, the public and private sectors as well

as non-government organisations play an important role in raising awareness ofcurrent and emerging corruption risks through their contribution to public debateand analysis. The Department of the Prime Minister and Cabinet has establishedthe Office for the Not-For-Profit Sector to coordinate reforms that strengthen thesector and promote the National Compact: Working Together.v

Royal commissionsFrom time to time, Australian governments also establishroyal commissions to inquire into and report on matters of public concern,including allegations of systemic corruption.

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4. MULTI-AGENCY MODEL

In accordance with Australias multi-agency approach to combating corruption, a numberof Australian Government agencies play a role in combating corruption through promotingaccountability, transparency and effective enforcement.

i. Attorney-Generals Department

The Australian Attorney-Generals Department is responsible for a number of domesticcriminal laws that are critical to combating corruption such as foreign bribery, organisedcrime, money laundering and proceeds of crime provisions. The department leads Australiasengagement on UN, OECD, Asia-Pacific Economic Cooperation (APEC), Financial ActionTask Force (FATF) and G20 anti-corruption related initiatives. The department is responsiblefor managing the review of Australias compliance with UNCAC. The department is also

Australias central authority for extradition and mutual assistance in criminal matters.The International Criminal Cooperation Central Authority facilitates international legalcooperation to and from foreign countries, including in corruption matters.

The Attorney-Generals Department leads a Commonwealth Inter-Departmental Committeeon anti-corruption, which meets on a quarterly basis to discuss the coordination andmanagement of anti-corruption initiatives. Key members of the committee include theAustralian Federal Police, the Australian Taxation Office, the Treasury, the Australian CrimeCommission, the Office of the Commonwealth Director of Public Prosecutions, AustralianTransaction Reports and Analysis Centre (AUSTRAC), the Australian Commission for LawEnforcement Integrity, the Department of the Prime Minister and Cabinet, the Office of the

Commonwealth Ombudsman, AusAID, the Department of Foreign Affairs and Trade and theAustralian Public Service Commission.

AUSTRALIAS MULTI-AGENCY APPROACH

STANDARDS &

OVERSIGHT

DETECTION &

INVESTIGATION

PROSECUTION

Attorney-GeneralsDepartment

Australian PublicService Commission

Auditor-General

Australian ElectoralCommission

Office of theAustralian Information

Commissioner

Department of Financeand Deregulation

ParliamentaryStandards

Australian FederalPolice

Australian Commissionfor Law Enforcement

IntegrityAustralian Crime

Commission

Inspector-Generalof Intelligence and

Security

Office of theCommonwealth

Ombudsman

Australian TransactionReports and Analysis

Centre

Office of theCommonwealth

Director of PublicProsecutions

International CrimeCooperation Central

Authority

Attorney-GeneralsDepartment Portfolio

Agencies

AusAID

INTERNATIONAL

COOPERATION

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v. Australian Crime Commission

The Australian Crime Commission (ACC) was established under theAustralian Crime Commission Act 2002as a statutory authority to combat serious andorganised crime. The ACC is Australias national criminal intelligence agency with uniqueinvestigative capabilities. The ACC conducts special operations and investigations againstAustralias highest threats from serious and organised criminals. This includes:

providing national strategic criminal intelligence assessments

maintaining national criminal intelligence holdings

developing national responses to organised crime

developing partnerships, providing coordination and collaboration across theCommonwealth, states and territories and the private sector

providing an independent view on the risk of serious and organised crime across

Australia and the impact of offshore threats.

The ACC works with partners to disrupt, disable and dismantle serious and organisedcriminal syndicates. The agency seeks to harden the Australian environment against thethreat of nationally significant crime by developing prevention strategies and influencingpolicy and legislation at Commonwealth and state and territory levels.

vi. Australian Public Service Commission

The Australian Public Service Commission supports the administration of thePublic Service Act 1999. This Act provides for the management and leadership of APSemployees and defines the powers, functions and responsibilities of agency heads, the

Public Service Commissioner and the Merit Protection Commissioner.

The Act also sets out the APS Values and Code of Conduct. Among other things, the Codeof Conduct requires all agency heads and APS employees to act honestly and with integrity,and not use their employment improperly for personal gain and to disclose and takereasonable steps to avoid any conflict of interest, real or apparent.vii

Agency heads are responsible for putting in place systems and processes for ensuringtheir employees understand and carry out their responsibilities under the Code of Conductand other legislation. Agency heads are also responsible, under the Act, for processes forinvestigating misconduct.

The Act provides protection for whistleblowers (ie an APS employee who has reported abreach of the Code of Conduct to an authorised person). (See also Section 5)

The responsibilities of the Public Service Commissioner include:

promoting the APS Values and Code of Conduct

evaluating the extent to which agencies incorporate the APS Values and theadequacy of systems in agencies for ensuring compliance with the Code of Conduct

inquiring into whistleblowing reports made by APS employees in certain circumstances,and inquiring into alleged breaches of the Code of Conduct by agency heads

considering and reporting to the Minister for the Public Service and Integrity on anymatter relating to the APS.

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The Merit Protection Commissioners responsibilities include inquiring into whistleblowingreports made by APS employees in certain circumstances and inquiring into any APS actionat the request of the Minister for the Public Service and Integrity.

In 2009, the Australian Government launched the Ethics Advisory Service, a dedicatedtelephone and email service for APS employees seeking advice and information about theethical framework in which they work, including their obligations under the APS Values andCode of Conduct.

vii. Office of the Commonwealth Ombudsman

The Office of the Commonwealth Ombudsman takes complaints and enquiries frommembers of the public about government administrative action, and undertakesinvestigations into those complaints and other systemic problems on an own motion basis.The Commonwealth Ombudsman also conducts compliance audits of law enforcement andregulatory agency use of covert information gathering powers and cooperates internationallyto improve ombudsman services in the Asia-Pacific region. The Commonwealth

Ombudsmans mission is to promote fair and accountable government administration.

viii. Auditor-General

The Auditor-General, assisted by the Australian National Audit Office, provides independentassurance about the use of public sector resources to parliament, the government, chiefexecutive officers and the public. Through the delivery of an integrated range ofhigh-quality audit reports and other publications, the Auditor-General aims to support andimprove public sector performance and accountability.

ix. Australian Electoral Commission

The Australian Electoral Commissions (AEC) role is to ensure the safe, fair and impartialconduct of parliamentary elections. The AEC is an independent electoral managementbody responsible for maintaining an impartial and independent electoral system for alleligible Australian voters in accordance with the requirements of the constitution and theCommonwealth Electoral Act 1918.

x. Office of the Australian Information Commissioner

The Office of the Australian Information Commissioner (OAIC) is an independent statutoryagency established under theAustralian Information Commissioner Act 2010. The OAIC wasestablished as part of major changes to federal freedom of information law made in 2010.

These reforms brought together, for the first time, functions relating to freedom ofinformation and privacy, as well as new functions relating to information policy. The Officeof the Privacy Commissioner, which was the national privacy regulator, was integrated intothe OAIC on 1 November 2010.

xi. Inspector-General of Intelligence and Security

The Inspector-General of Intelligence and Security (IGIS) reviews the activities of theagencies that collectively comprise the Australian intelligence community. IGIS has itsown motion powers in addition to considering complaints from members of the public orrequests from ministers. The overarching purpose of IGIS is to ensure that each agency

in the Australian intelligence community acts legally and with propriety, complies withministerial guidelines and directives, and respects human rights.

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5. STRONG, MODERN LEGISLATIVE REGIME AND GUIDELINES

Australia has a strong legislative regime criminalising corrupt behaviour.

Australias corruption offences cover a broad range of crimes, including bribery,

embezzlement, nepotism and extortion. For this reason, Australias corruption offences arenot contained in any single Act of Parliament and are found in both Commonwealth andstate and territory legislation.

At the Commonwealth level, a number of pieces of legislation contain corruption-relatedoffences.viiiFor example:

The Criminal Code Act 1995criminalises the laundering of proceeds of crime, domesticand foreign bribery, embezzlement, trading in influence, abuse of public office andother fraudulent conduct, money laundering, and extensions of criminal responsibility.

The Proceeds of Crime Act 2002 establishes a comprehensive regime to trace, restrain

and confiscate the proceeds of Commonwealth indictable offences and certain foreignoffences. This Act also contains unexplained wealth provisions, which allow courts toorder individuals to show that their wealth was lawfully acquired.

The Financial Management and Accountability Act 1997(FMA Act) provides the frameworkfor the proper management of public money and public property by the executive armof the Commonwealth.

TheAnti-Money Laundering and Counter-Terrorism Financing Act 2006(AML/CTF Act)establishes a regulatory regime that strengthens the capacity of business to identify,mitigate and manage the risk of their businesses being used to launder money or

finance terrorism. The provisions include customer identification and verification,and reporting and record keeping obligations on certain businesses. These measuresenable businesses to know their customers, their sources of wealth and monitorfinancial transaction movements. They enable law enforcement and intelligenceagencies to follow money trails in potential cases of corruption. Compliance withobligations under the AML/CTF Act is supervised by AUSTRAC.

The Commonwealth Authorities and Companies Act 1997regulates certain aspects ofthe corporate governance, financial management and reporting of Commonwealthauthorities that are in addition to the requirements of their enabling legislation, and thecorporate governance and reporting of Commonwealth companies that are in addition

to the requirements of the Corporations Act 2001. Part V of theAustralian Federal Police Act 1979establishes the scope for a strong

professional standards framework within the AFP. This framework targets thecontinuum of activity that leads to corruption and includes prevention, detection andinvestigation activities. Allegations of serious misconduct and corruption within the AFPare overseen by ACLEI. The Act makes provision for additional powers to investigateserious misconduct allegations against AFP members by a specialised unit within theAFP. This unit works closely with ACLEI. Part V of the Act was enacted in 2006, followinga review of professional standards within the AFP. It reflects a management-orientedapproach to less serious misconduct balanced against a swift and effective response to

serious allegations, including corruption.

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Other Commonwealth legislation is designed to effectively prevent or enable reporting oncorrupt conduct:

Australias administrative law system (including theJudiciary Act 1903, theAdministrative Appeals Tribunal Act 1975, theAdministrative Decisions (Judicial Review)Act 1977 and theLegislative Instruments Act 2003) protects against abuse of powerby providing for merits and judicial review of government decisions and promotingtransparency in government processes.

The Freedom of Information Act 1982(FOI Act) creates a general right for membersof the public to obtain access to documents, and sets out a range of obligations andrestrictions on departments and the public for exercising these rights. The AustralianGovernment has reformed the FOI Act with the principal object of promoting apro-disclosure culture across the government and building a stronger foundationfor more openness in government.

Whistleblower protection in the Commonwealth public sector is provided by law,

including under section 16 of the Public Service Act 1999and section 16 of theParliamentary Service Act 1999. These Acts provide that a person must not victimise ordiscriminate against an Australian Public Service or Parliamentary Service employeebecause that employee has reported breaches (or alleged breaches) of the APS Code ofConduct or the Parliamentary Service Code of Conduct to an authorised person.

Some whistleblower protection in the private sector is provided by law, includingunder Part 9.4AAA of the Corporations Act 2001, the Banking Act 1959, the InsuranceAct 1973, the Life Insurance Act 1995and the Superannuation Industry (Supervision) Act1993. These protections are designed to encourage people within companies, or withspecial connections to companies, to alert the Australian Securities and Investment

Commission and other authorities to illegal behaviour.

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Recent initiatives

Whistleblower Protection Scheme

In March 2010, the Australian Government tabled its response to the House ofRepresentatives Standing Committee on Legal and Constitutional Affairs report entitledWhistleblower protection: a comprehensive scheme for the Commonwealth public sector.

A Public Interest Disclosure Bill is being developed to give effect to the governmentresponse and introduce the first stand-alone whistleblower protection scheme for theCommonwealth public sector.

The legislation will facilitate reporting and provide for investigation of alleged wrongdoingin the public sector.

Public Service Act Revision of the Australian Public Service Values and otheramendments

In 2010, the Advisory Group on Reform of Australian Government Administrationreleased its report,Ahead of the Game: Blueprint for the Reform of Australian GovernmentAdministration. Among other things, the report recommended broad changes to the APSValues to make them shorter, more memorable and more effective in driving change.

The Public Service Amendment Bill has been drafted to implement legislative changesrecommended in the report and to improve the operation of the Public Service Act. The Billis expected to be introduced early in 2012.

Commonwealth Fraud Control Guidelinesix

In 2011, the Australian Government issued the revised Commonwealth Fraud ControlGuidelines under the Financial Management and Accountability Act 1997(FMA Act). Theseguidelines define the Australian Governments requirement that all agencies subject tothe Act put in place practices and procedures for effective fraud control. Agencies mustprepare fraud risk assessment and fraud control plans that comply with the guidelines.

Under the guidelines, agencies must also refer all instances of serious or complex fraudinvolving Commonwealth interests to the AFP.

Officials must have regard to the guidelines when performing duties related to the efficient,effective, economical and ethical management of Commonwealth resources. Breaches of

the guidelines may attract a range of criminal, civil or administrative remedies.

Commonwealth Procurement Guidelinesx

The Commonwealth Procurement Guidelines represent the policy framework under whichpublic service agencies govern and undertake their own procurement. The Guidelines focuson value for money and transparency.

Commonwealth Grant Guidelinesxi

The Commonwealth Grant Guidelines establish the grants policy and reporting frameworkfor all departments and agencies subject to the FMA Act.

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Strengthening legal protections

In February 2010, the Commonwealth Parliament passed two bills to further strengthenthe criminal confiscation system: the Crimes Legislation Amendment Act (SOC Act No.1)and the Crimes Legislation Amendment Act(SOC Act No.2). The amendments focuson confiscating the proceeds of crime while strengthening national law enforcementcoordination and capability. The strategy is two pronged: to remove the profitability ofcriminal activity, and increase the likelihood of criminals being caught.

In the next twelve months, parliament is scheduled to consider legislation to help theAustralian Crime Commission share intelligence with the private sector to support theirefforts to harden the environment against serious and organised crime threats.

The Commonwealth Parliamentary Joint Committee on Law Enforcement is alsoconducting an inquiry into Commonwealth unexplained wealth laws and arrangements.The committee is examining the operation of the unexplained wealth provisions of theProceeds of Crime Act 2002, which can be used to target serious and organised crime

bosses who arrange their affairs so that they can enjoy the proceeds of crime, withoutcommitting the actual crimes themselves.

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6. WORKING IN PARTNERSHIP - COMMONWEALTH, STATE,

TERRITORY AND LOCAL GOVERNMENTS

Coordination on anti-corruption measures is currently pursued through a number of

forums, such as the Council of Australian Governments (COAG), COAG standing councilsand through inter-agency coordination.

Australian Anti-Corruption Commissions Forum

The Australian Anti-Corruption Commissions Forum comprises the heads of Australiananti-corruption agencies. It provides the means for these agencies to interact;exchange information, knowledge and ideas; work cooperatively; share training andresources; and promote common areas of interest. Under this umbrella, the AustralianCommission for Law Enforcement Integrity and state counterparts participate inoperational forums, including legal, intelligence, research and communication

subgroups. Presently, the Integrity Commissioner chairs the forum.

Council of Australian Governments

COAG is the peak intergovernmental forum in Australia, comprising the Prime Minister, statepremiers, territory chief ministers and the President of the Australian Local GovernmentAssociation. COAGs role is to initiate, develop and monitor the implementation of policyreforms that are of national significance and that require cooperative action by Australiangovernments. For example, in April 2009, COAG leaders agreed to progress work indeveloping a nationally coordinated response to organised crime through the StandingCouncil on Law and Justice and the Standing Council on Police and Emergency Management.

Standing Council on Law and Justice

SCLJ is a national, ministerial-level council established by COAG. Its members are theAustralian Attorney-General, the state and territory Attorneys-General and the New ZealandMinister of Justice. SCLJ provides a forum for members to discuss and progress mattersof mutual interest relating to law and justice, including legal policy and service provision.The SCLJ focuses on initiatives of high-level, strategic and national significance that requirecooperation between jurisdictions. It also works closely with the Standing Council on PoliceManagement to implement the National Organised Crime Response Plan.

Standing Council on Police and Emergency ManagementSCPEM is a ministerial-level council also established by COAG. Its members are theAustralian, state, territory and New Zealand ministers with responsibility for policeand emergency management matters and a representative from the Australian LocalGovernment Association. SCPEMs purpose is to promote a coordinated national responseto law enforcement and emergency management issues.

Public Service Commissioners Conference

The Public Service Commissioners Conference is held twice a year. The conference is across-jurisdictional forum for Australian, state and territory public service commissioners

and New Zealands State Services Commissioner.The conference provides opportunities for commissioners to discuss contemporarychallenges in public administration. It also serves as a forum for exchanging informationand sharing experiences.

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7. WORKING IN PARTNERSHIP CIVIL SOCIETY AND THE

PRIVATE SECTOR

Australia values the development of strong partnerships with civil society, international

organisations and the business community. Civil society plays an important role in termsof raising awareness, obtaining access to information and supporting and enforcingbusiness ethics.

The Australian Government works closely with non-government organisations suchas Transparency International to empower civil society, government and private sectorstakeholders to advocate for anti-corruption reforms, and analyse the extent and causes ofcorruption. Australia provides political and financial support for civil society to participatein multilateral anti-corruption forums.

Domestically, there are several agencies that investigate or provide intelligence aboutcorruption in the private sector.

AUSTRAC: The Australian Transaction Reports and Analysis Centre providesfinancial intelligence on potential crimes, including corruption.

ACCC: The Australian Competition and Consumer Commission educates thebusiness community and the publicfor example, how to make a complaintandadvises small businesses how to avoid corrupt conduct.

APRA: The Australian Prudential Regulation Authority oversees banks, creditunions, building societies, insurance companies, and the superannuation industry.

ASIC: The Australian Securities and Investment Commission has powers to

investigate offences by corporations and corporate officers. This includes powersto investigate bribery offences, the misleading of shareholders or other abuses forpersonal gain.

EFIC: As Australias export credit agency, the Export Finance and InsuranceCorporation was established to help grow Australian businesses, trade and investmentactivities internationally by providing finance, guarantee and insurance facilities. EFICworks to eradicate corruption in international business transactions by:

a) informing exporters and, where appropriate, other relevant parties, of the legalconsequences of engaging in bribery;

b) requiring exporters and, where appropriate, other relevant parties, to provide ano engagement in bribery declaration; and

c) informing law enforcement authorities if there is credible evidence that briberywas involved in the award or execution of an export contract.

Conduct of the private sector

The regulatory framework governing Australias private sector is covered under theCorporations Act 2001, theAustralian Securities and Investments Act 2001, the ASX CorporateGovernance Councils Corporate Governance Principles and Recommendationsas well as

individual corporate codes of conduct. Australia adheres to the OECD (Organisation forEconomic Co-operation and Development)Guidelines for Multinational Enterprises, whichare recommendations on responsible business conduct, including provisions on how theprivate sector can help combat bribery.

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The Corporations Act 2001regulates the conduct of directors and officers of companies andincludes offences such as failure to act in good faith, and fraud by company officers. Inaddition, corporate criminal responsibility has been established for all offences containedin the Criminal Code Act 1995, meaning that corporations may be found guilty of any offencecontained in the code, including those punishable by imprisonment.

TheAnti-Money Laundering and Counter-Terrorism Financing Act 2006imposes obligationson business when they provide certain services (financial, gambling and bullion) to identifyand verify their customers, lodge reports with AUSTRAC, monitor the relationship withtheir customers and make and retain records of the services provided. Similarly, under theProceeds of Crime Act 2002, financial institutions can be made to provide certain informationand documents to specified law enforcement officers upon request.

Recent initiatives

Education

To support a business culture of transparency and accountability, the Australian Governmentruns a national anti-corruption education and outreach program called Trading withIntegrity. The program informs Australian businesses of their responsibilities to conductactivities in accordance with Australian law. It covers the various international anti-briberyand anti-corruption frameworks supported by the Australian Government including theAPEC Code of Conduct for Business and OECD instruments including the Guidelines forMultinational Enterprises, the Anti-Bribery Convention and the Risk Awareness Tool.

The Department of Foreign Affairs and Trade also publishes web-based resources on anti-corruption for Australians and Australian businesses travelling, working or operating overseas.For more information, visit www.dfat.gov.auand search for measures against corruption.

Lobbying Code of Conduct and Register of Lobbyists

Since 2008, the Department of the Prime Minister and Cabinet has administered theLobbying Code of Conduct and Register of Lobbyists, which was established to improvetransparency in the third party lobbying sector.

National policy on match-fixing in sport

On 10 June 2011, Australias sports ministers agreed to a national policy on deterringmatch-fixing in sport, representing a commitment by the Australian, state and territorygovernments to work together to address the threats match-fixing and associated corruption

pose to the integrity of Australian sport.

In line with the national policy, governments have since agreed to pursue a nationally consistentlegislative approach to deter and deal with match-fixing. This will introduce specific legislationto address agreed match-fixing behaviours, with these criminal offences to carry a maximumpenalty of ten years imprisonment.

Further, all Australian governments have endorsed an operational model to protect the integrityof the sports betting industry. The model supports the development of integrity arrangementsbetween sports and betting companies to share information, provide sports with a right to vetobet types and provide a financial return to sports from sports betting.

To oversee these national arrangements, a new National Integrity of Sport Unit will beestablished. Government funding will be contingent on sports implementing appropriateanti-match-fixing and anti-corruption policies and practices, including match-fixing code ofconduct principles, education programs for players and officials, and disciplinary frameworks.

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8. EFFECTIVE INTERNATIONAL ENGAGEMENT

International corruption is far reaching and deeply damaging. The Australian Governments2011 Aid Policy emphasises that corruption undermines efforts to lift people out of poverty,diverts funds from services and undermines investor confidence, which is critical forcreating jobs. Australia has committed to working with its partners to support efforts totackle corruption, increase transparency and improve accountability. Australias approachto combating corruption internationally focuses on four categories of sustained effort:

1. Design- supporting the development of international anti-corruption standards.

2. Implementation- working with partner countries and international bodies andmechanisms to implement anti-corruption standards.

3. Cooperation- strengthening practical international cooperation against corruption.

4. Review- learning lessons from implementing international standards.

Design

As part of its commitment to a global, rules-based order, Australia participates closely inthe development of multilateral conventions to prevent and disrupt corruption, enhancetransparency, and promote the sustainable rule of law. Australia is a long-standingcontributor to the following international anti-corruption standard setting initiatives:

UN Convention against Corruption:UNCAC is the premier global framework in thefight against corruption. Australia ratified UNCAC in 2005 and actively supports the

UNCAC Conference of States Parties and its subsidiary working groups. Australiaparticipated in the design of the UNCAC Implementation Review Mechanism,particularly to ensure it is transparent, fit for purpose, and inclusive of civil society.Australia is a leading financial supporter of the UNCAC Implementation ReviewMechanism with contributions totalling A$2.1m over 2011 and 2012.

Organisation for Economic Co-operation and Development:Australia ratified theOECD Convention on Combating the Bribery of Foreign Public Officials in 1999.The convention requires signatories to criminalise the conduct of foreign bribery,implement sanctions for the offence, apply standards for law enforcement andbusiness accounting, and establish arrangements for international cooperation.

Australia is an active member of the OECD Working Group on Bribery. Financial Action Task Force:Australia is closely engaged in developing international

anti-money laundering and counter terrorism financing (AML/CTF) standards.Australia supports the current revision of the FATF Recommendations related tocorruption. Australias AML/CTF regime includes a range of measures that detect anddeter laundering of the proceeds of crime (including corruption) with some measuresspecifically focussing on corruption risks posed by politically exposed persons.

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2005 Paris Declaration on Aid Effectiveness and the 2008 Accra Agenda for Action:The Australian Government is a signatory to the international aid effectivenessagenda as articulated in the 2005 Paris Declaration on Aid Effectivenessand the 2008Accra Agenda for Action. Under these agreements, Australia is committed to assistingpartner countries to strengthen their financial and procurement systems. The World

Banks Stolen Asset Recovery Initiative(StAR) estimated that developing countries losebetween US$20 billion and US$40 billion each year to bribery, embezzlement, andother corrupt practices. In view of these losses, the G20 Anti-Corruption Action Plan,which Australia supports, includes measures to protect developing country budgets,and the global financial system, from abuse by corrupt leaders and officials.

Implementation

The following Australian government agencies support effective international engagement:

AusAID: AusAID is the agency responsible for Australian Government efforts to

reduce the impact of corruption on global poverty. Australias aid program tacklescorruption regionally and internationally, working with partner governments tosupport their efforts to reduce corruption, increase transparency and improveaccountability. AusAID also supports international and regional anti-corruptionactivities, including helping civil society to reduce corruption; promoting revenuetransparency in the mining, gas and petroleum sectors; assisting countries torecover assets stolen through corruption; and supporting the operation of theUNCAC against Corruption. AusAID protects Australian aid flows from corruptionthrough its fraud control program.

Attorney-Generals Portfolio Agencies:The AFP, ACC, AUSTRAC, ACLEI, and the

Attorney-Generals Department all assist partner governments to strengthen theirinstitutional capacity to resist corruption and promote the rule of law. A unifyingstrategy for portfolio agencies is strengthening legislative and operational capacityto detect and disrupt the financing of corruption, and to trace and recover theproceeds of corruption.

Australias International Crime Cooperation Central Authority (ICCCA) providessignificant assistance to its foreign counterparts in anti-corruption matters,and has facilitated the return of some A$8m in proceeds of corruption to Chinaand Indonesia. These efforts are supported by close inter-agency cooperation incriminal asset tracking and recovery.

Commonwealth Ombudsman:The Commonwealth Ombudsman cooperatesinternationally to improve ombudsman services in the AsiaPacific region. One ofthe key responsibilities of ombudsmen in this region is to prevent corruption. Thiswork builds linkages and provides mutual support for ombudsman functions, aimedat improving government integrity and accountability, and is part of the broaderfight against corruption within our region.

Treasury:The Treasury provides capacity building support, through its deployments,to help strengthen the institutional capacity of economic and finance ministries inthe Asia-Pacific region. Amongst other things, capacity building promotes improved

economic governance and public financial management so that these institutionscan better address corrupt practices.

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Cooperation

Australia actively supports key multilateral anti-corruption forums:

G20 Anti-Corruption Working Group:Australia contributed to the development

of the G20 Anti-Corruption Action Plan, and is an active member of the G20Anti-Corruption Working Group. The comprehensive G20 plan includes strongermeasures to prevent corruption-related money laundering, stronger internationallegal cooperation, and denial of visas and safe haven to corrupt leaders. Incooperation with partner countries, Australia is leading a review of G20 prioritiesto strengthen international cooperation against corruption, and is developing theG20 Guide to Mutual Legal Assistance. Australia is also committed to implementingthe G20 Anti-Corruption Action Plan and will examine any necessary reforms indeveloping the National Anti-Corruption Plan.

APEC Anti-Corruption and Transparency Experts Taskforce:Australia is an active

contributor to the APEC Anti-Corruption and Transparency Experts Taskforce.Australia led the development of theAPEC Code of Conduct for Businessand workedwith Chile, Thailand and Vietnam to implement the code. The United States isnow building on this work by extending the code to specific industry sectors. Todisrupt the financing of corruption, Australia worked with Thailand and other APECmembers to promote the pioneering use of anti-money laundering systems againstcorruption, including hosting several international conferences for this purpose.Following the 2007 APEC Sydney Declaration, which called for further actionagainst deforestation and associated climate change, Australia hosted the Fish,Forests and Filthy Lucre Conference in 2010. The conference identified practicalstrategies to use anti-money laundering and asset confiscation systems against

deforestation and illegal fishing.

Egmont Group of Financial Intelligence Units:Australia is an active participant in the127-member group of countries who work together to improve cooperation in the fightagainst money laundering and financing of terrorism. The Egmont Group is developinga white paper on the role of financial intelligence units in combating corruption.

International Anti-Corruption Academy:Australia is a founding member of theAssembly of Parties of the International Anti-Corruption Academy. Australia supportsthe academys objectives to improve the effectiveness of organisations and peopleengaged in the prevention, investigation, prosecution and adjudication of corruption,

and to develop standards and best practices for anti-corruption education and research.

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International organisations:Australias aid program provides the following supportto international organisations and mechanisms:

o Assisting civil society to reduce corruption by supporting TransparencyInternationals work in the Asia Pacific region (A$7.1 million since 2006).

o Promoting revenue transparency in the mining, gas and petroleum sectorsby supporting the Extractive Industries Transparency Initiative (EITI). TheEITI sets a global standard for transparency in these sectors, enablingrevenues raised from natural resources to be spent on health, educationand other developmental priorities. Australia is currently the highest singlecontributor to the EITI with contributions and future commitments totallingA$12.7 million.

o Helping countries to recover assets stolen through corruption bycontributing to the Stolen Assets Recovery Initiative (A$3.1 million since2009). This supports StAR to help developing countries build the necessary

tools and institutions to recover proceeds of corruption, provide supportand training on asset recovery processes, facilitate collaboration acrossgovernments, regulators, banks and civil society and share informationabout good practice.

o Supporting the operation of UNCAC by providing financial assistance tothe UN Office on Drugs and Crime and UN Development Program to helpcountries sign up, implement and review compliance with UNCAC ($A1.9million since 2009).

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Review

Australia strongly supports evaluation of how we implement international anti-corruptionstandards and conventions.

Australias compliance with UNCAC is currently being reviewed. Australia is committedto a transparent and inclusive approach to the review and will help civil society toparticipate in the process. Although the review is still in progress, it has already identifiedopportunities for Australia. The review provides a strong incentive to take advantage ofother international and domestic anti-corruption developments and opportunities, suchas fulfilling our commitments to the G20 and APEC, in addition to UNCAC. Similarly, civilsocietys submissions to our review suggest possibilities to further strengthen ouranti-corruption arrangements. Australias response to the UNCAC review will be addressedin the National Anti-Corruption Plan.

Australia is also scheduled to undergo its Phase 3 evaluation against the

OECD Anti-Bribery Convention in 2012. This evaluation is another opportunity to ensurethat our anti-bribery laws and policies are aligned with global best practice. Consistentwith Australias obligations under the OECD Anti-Bribery Convention, the AustralianGovernment issued a public consultation paper on the facilitation payments defence tothe foreign bribery offence, in November 2011. The government will consider the views ofall stakeholders provided during the consultation. The consultation paper raises possiblechanges to Australias anti-bribery laws in the Criminal Code to remove the facilitationpayments defence and other amendments to improve the operation of the laws.

The Australian Government acted promptly on the results of previous reviews of itsanti-bribery regime. In February 2010, the penalties for foreign bribery were increased

following the OECD Working Group on Briberys Phase 2 review of Australiasimplementation of the Anti-Bribery Convention, in 2006.

Australia sees significant opportunities to use UNCAC implementation reviews to guideinternational technical assistance and capacity building programs. UNCAC implementationreviews provide a consistent framework and methodology for evaluation. This will helpcoordinate and target whole-of-government and wider international donor assistance.The National Anti-Corruption Plan will specify Australias approach to using internationalreviews as a basis for future development assistance against global corruption.

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Endnotes

i. AWB Scandal Takes Its Toll, Says Corruption Watchdog

ii. http://www.apsc.gov.au/stateoftheservice/1011/chapt3.html

iii. Data on fraud is provided through the Australian Institute of Criminologys report onFraud against the Commonwealth, the report to Parliament on Compliance with theFinancial Management Act requirements and the State of the Service Report (2011Publications and Ministerial Statements, address by the Hon Gary Gray, AO MP).

iv. A copy of the Ministerial Standards can be found athttp://www.dpmc.gov.au/guidelines/index.cfm

v. http://www.nationalcompact.gov.au/.

vi. All references to legislation in this discussion paper are to Commonwealth legislation,

unless otherwise specified.

vii. A copy of the APS Values and Code of Conduct can be found at http://www.apsc.gov.au/conduct/.

viii. View Commonwealth laws on anti-corruption at http://www.track.unodc.org/LegalLibrary/Pages/Home.aspx.

ix. Further information can be found athttp://www.ag.gov.au/www/agd/agd.nsf/Page/Fraudcontrol_CommonwealthFraudControlGuidelines-May2002.

x. A copy of the Commonwealth Procurement Guidelines can be found at: http://www.finance.gov.au/procurement/procurement-policy-and-guidance/CPG/index.html

xi. A copy of the Commonwealth Grant Guidelines can be found at: http://www.finance.gov.au/financial-framework/financial-management-policy-guidance/grants.html

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Commonwealth Approach to Anti-Corruption

Documents

Transcript of Commonwealth Approach to Anti-Corruption