• Australian companies want to stamp out corruption? Then they need to stop paying bribes

    Posted by Ben

    10 July, 2013

    I wrote this blog post about Australian mining companies arguing for the continued right to pay small bribes ("facilitation payments") for the global Exposed 2013 campaign a few weeks ago. I didn't expect the same Australian mining companies to be making the same arguments in public so soon.

    In today's Australian Financial Review (paywalled), Bill Turner (chair of the Australia-Africa Mining Industry Group) argues that Australia should not follow the lead of Canada and the UK and close off a loophole in our bribery laws that allows companies to defend themselves against a charge of bribing a foreign official by claiming that it was merely a "facilitation payment". This defence relies on the payment being made to secure or speed up a routine service to which the payer is legally entitled, and for which the payer has kept a record of the transaction.

    The Australia Government has been considering, for over two years now, removing the "facilitation payments" defence from the law. An increasing number of countries don't recognise any distinction between a bribe and a "facilitation payment" and the UN Office on Drugs and Crime states that "a facilitation payment is simply another term for a bribe." Some Australian States already define bribery in a way that includes facilitation payments.

    Mining

    Mr Turner – on behalf of the Australia-Africa Mining Industry Group, which represents a number of Australian mining and mining services companies – argues that these payments are an integral and necessary part of doing business in many African countries. He claims that "we would all like to conduct business in Africa without the need for facilitation payments" but sadly laments that they are more like a natural hazard or an inevitable part of a certain stage of a country's economic development than a considered and illicit transaction between two willing parties.

    None of these arguments stack up. Rather, they serve as a reminder of why we all need to stand together to shine the light on corruption. 

    In contrast to the Australia-Africa Mining Industry Group, investor groups and The Certified Practicing Accountants Australia have publicly urged the Australian Government to ban facilitation payments. They recognise that breaking foreign laws might seem like a short-term solution to an obstacle, but is bad in the longer-term for both the business and the country in which it is operating. The not-for-profit international organisation TRACE interviewed 42 companies engaged in international business and found none of the companies that carefully and comprehensively prohibited facilitation payments suffered any significant or prolonged disruption to their business activities.

    The reality is that these facilitation payments entrench corrupt behaviour. While the challenges for delivering effective public service might well be greater in poorer countries, making these payments further distorts the priorities of officials away from serving the public good towards seeking private gain. They undermine the efforts of governments to combat corruption in their own public services and they rob citizens of their rights to live, work and invest in an environment free from corruption.

    Micah Challenge coalition member, the Uniting Church's Vic-Tas Justice and Mission Unit has been leading a call for the Australian Government to ban these payments. Please contact them on 03 9251 5271 or jim@victas.uca.org.au for campaign postcards and add your voice to the campaign against bribery.