Risk of corruption and bribery higher than ever
THE risk of corruption and bribery is higher than ever in Australian and New Zealand organisations, according to a new report, with incidents occurring in 23% of surveyed companies.
Deloitte Forensic partner Frank O'Toole says the Deloitte Bribery and Corruption Survey 2015 report also found that many Australian and New Zealand organisations - private and public sector and not-for-profit - also remain ill-equipped to identify, manage and prevent those challenges.
"The risk is actually higher than ever and, for many organisations, it will only be a matter of time before a corrupt offer or demand is made and someone gives in to a temptation and takes advantage of a control gap," he said.
"The work we are doing confirms this, and we have been involved with numerous investigations related to dozens of suspected bribery and corruption incidents over the last two years."
Deloitte surveyed more than 250 Chief Financial Officers, Chief Risk Officers, other executives, directors and employees responsible for risk management.
Key findings of the 2014 survey include:
23% of respondent organisations have experienced one or more known instances of domestic corruption in the last five years
40% have operations in high risk jurisdictions, and 35% of these have experienced a known bribery and corruption incident in the last five years
23% of respondent organisations with offshore operations are not concerned with risks arising from non-compliance with applicable legislation, and 77% of these have never undertaken a bribery and corruption risk assessment
- 40% of respondents with offshore operations don't have (or don't know if they have) a formal compliance program in place to manage corruption risk.
"Bribery and corruption risk and incidence is real and complex," Mr O'Toole said.
"And while organisations understand the reputational and even bottom line risks an incident can present, and take a robust approach to mitigating the risks, we haven't seen any tangible decrease in levels of corruption in recent years, or any major shifts in attitudes towards it, especially in offshore jurisdictions."
The survey is supported by, among others, the Australian Federal Police and Transparency International. They confirm that Australian anti-corruption and law enforcement agencies are busier than ever.
"Anyone who believes that domestic corruption - risk and repercussions - is not an important issue is seriously mistaken," Mr O'Toole said.
"And despite a fall from the 2012 results, many organisations don't have a formal bribery and corruption compliance program in place."
As Australian and New Zealand organisations explore offshore opportunities, they face the dual risk of operating in higher corruption risk jurisdictions and ultimately having to face extra-territorial bribery laws that are more rigorous than local foreign bribery laws.
"Australian and New Zealand organisations are clearly pursuing opportunities in developing countries, with almost half of respondents having offshore operations, and 84% of these respondents have them in high risk jurisdictions.
"That many organisations with offshore operations don't regard foreign bribery and corruption as a serious future risk is a concern, and there are still too many not giving bribery and corruption the attention it deserves."