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Corruption is not an obstacle to business in Australia, which is known for its well-functioning and independent judiciary, transparent regulatory climate and overall low levels of corruption. However, corruption risks exist in relation to foreign bribery and the mining industry. The Criminal Code covers bribery of foreign and domestic public officials, while each of Australia’s states and territories has its own anti-corruption provisions. Public sector and private sector bribery are addressed, and both individuals and companies can be targeted. Persons convicted of corruption can receive a maximum penalty of 10 years’ imprisonment and/or a fine of up to AUD 1.1 million. For a business, the penalty is a fine of up to AUD 17 million, three times the value of the obtained undue benefit, or 10% of the annual turnover of the company during the period in question. Australian political parties commonly receive gifts and hospitality, but there is little information available on gifts and hospitality in the private sector. Provided they are recorded, facilitation payments are legal in Australia.
Last updated: December 2015
Australia’s judiciary bears very low risks of corruption for companies. It operates independently and acts impartially in civil matters (HRR 2014). Foreign businesses operating in Australia perceive the judiciary as independent (GCR 2015-2016), and the country ranks among the best in the world concerning the enforcement of contracts (DB 2016). Australia has well established legal and court systems for litigation and arbitration and is a pioneer in the development and provision of non-court dispute resolution mechanisms (ICS 2015).
The risk of encountering corruption within the Australian police service is low. Surveyed business executives place high trust in the Australian police services and report few business costs of violence and crime (GCR 2015-2016). The government has effective mechanisms in place to prevent and detect corruption in the police, and there are no reports of impunity (HRR 2014).
There is a low risk of encountering corruption when acquiring public services in Australia. Twenty-three percent of surveyed organizations reported having encountered bribery in the last five years, out of which 68 percent involved the private sector and 16 percent public officials (Delloite 2015). Companies do not believe corruption impedes business in Australia (GCR 2015-2016). Domestic and foreign companies operating in Australia enjoy great flexibility in the licensing process due to a strong rule of law that protects companies against corruption risks (ICS 2015). This is reflected in Australia’s good performance in relation to the ease of starting a business and dealing with construction permits (DB 2016).
Businesses are very unlikely to encounter corruption when dealing with Australia’s Land authorities. Property rights are protected by a strong rule of law (ICS 2015). Registering property takes only five days, which is much less than the OECD average of nearly 22 days (DB 2016).
There is a very low risk for companies operating in Australia to make undocumented extra payments or bribes in connection with tax payments (GCR 2015-2016).
Corruption when importing or exporting goods is not a concern for businesses in Australia (GETR 2014), and company executives do not perceive customs procedures as a burden on business (GCR 2015-2016).
There is a low risk of corruption in Australian public procurement, but some fraud risks exist. Australia’s public procurement system is transparent and well regulated, restricting opportunities for corrupt practices in this sector (ICS 2015). AusTender provides centralized publication of Australian Government business opportunities, annual procurement plans, multi-use lists and awarded contracts. Businesses do not report that procurement corruption is a problem (GCR 2015-2016), yet one-third of Australian companies report to have experienced procurement fraud in the past two years (PwC 2015). While globally fraud commonly occurs during the invitation of quotes and the bids process, Australian respondents cite vendor contracting and maintenance as the primary place of fraud (PwC 2015). Accordingly, businesses in Australia are recommended to use a specialised due diligence public procurement tool to assess potential risks.
Corruption cases surrounding the Australian coal and mining industry are frequently reported and investigated. For instance, in 2015, the NSW Independent Commission Against Corruption accused the mining company NuCoal of having exploration licenses tainted by corruption, which led to a court ruling suspending NuCoal’s licenses (SMH, Sept. 2015;The Australian, Oct. 2015).
Given the importance of its mining sector, Australia is currently undertaking a pilot of the Extractive Industries Transparency Initiative (EITI) (EITI 2015), but compliance with EITI’s voluntary and mandatory requirements of transparency and financial disclosure lags behind (International Affairs, June 2015).
Australian anti-corruption legislation is comprehensive and enforced. Anti-corruption laws are found at federal (national) and state and territory (regional) levels. At the federal level, the Criminal Code stipulates active and passive bribery of foreign and Commonwealth public officials, attempted corruption, extortion and money laundering as criminal offenses, applying to individuals as well as companies. Private sector bribery is primarily regulated by state and territory law, which criminalizes both active and passive bribery and (in some regions) specifies false accounting type offenses. Other relevant legislation includes the Anti-Money Laundering and Counter-Terrorism Financing Act, the Corporations Act and the Public Service Act. Australian law does not specify which gifts are legal; however, the Australian Public Service Code of Conduct can serve as a guideline (HSF, 2015). Provided they are recorded, facilitation payments are legal in Australia (Clifford & Chance, Oct. 2015). Persons convicted of corruption can receive a maximum penalty of 10 years and/or a fine of up to AUD 1.1 million. For a business, the penalty is a fine of up to AUD 17 million, three times the value of the obtained undue benefit, or 10% of the annual turnover of the company during the period in question. Bribery of foreign officials does not have extra-territorial effect (HSF, 2015).
Australia has ratified the United Nations Convention against Corruption (UNCAC) and the OECD Anti-Bribery Convention. However, a 2015 OECD evaluation report states that Australia needs to further reform its foreign bribery policies and points out that current anti-corruption creates substantial confusion about the scope of the facilitation payments defense. Access the Australian government’s ComLaw for a collection of national legislation.
Australia’s media landscape is diverse, with numerous public and private broadcasters, but ownership of private print media is highly concentrated (FotP 2015) Australia’s press environment is considered ‘free’ (FotP 2015). The government respects the rights to public assembly and freedom of speech (FitW 2015). Civil societyorganizationss (CSOs) operate freely, and anti-corruption bodies from Queensland, Western Australia, and New South Wales states actively collaborate with CSOs (HRR 2014).
- US Department of State: Investment Climate Statement 2015.
- The World Economic Forum: Global Competitiveness Report 2015-2016.
- The World Bank: Doing Business 2015.
- Freedom House: Freedom of the Press 2015 – Australia.
- Freedom House: Freedom in the World 2015 – Australia.
- Herbert Smith Freehills: Guide to anti-corruption regulation in Asia Pacific 2015.
- Deloitte: Bribery and Corruption Survey 2015 – Australia.
- Pricewaterhouse Cooper (pwc): Economic Crime Survey 2015 – Australia.
- Reporters Without Borders: World Press Freedom Index 2015.
- Clifford & Chance: Anti-Corruption Legislation, October 2015.
- OECD: Australia Follow-Up To The Phase 3 Report & Recommendations, April 2015.
- The Australian: “NuCoal US investor Ventry says it won’t put money in Australia” 23 October 2015.
- The Sydney Morning Herald: “NuCoal loses ‘futile’ case against ICAC over coal licence recommendation” 24 September 2015.
- International Affairs: “Transparency in resource payments why is australia dragging its feet” 4 June 2015.
- US Department of State: Country Report on Human Rights Practices for 2014 – Australia.
- The World Economic Forum: The Global Enabling Trade Report 2014.