Hamish Fletcher

Hamish Fletcher is a business reporter for the NZ Herald

Australasian companies at risk of bribery and corruption

A Deloitte survey of almost 400 Australasian organisations reveals almost 20 per cent of respondents with overseas operations have suffered from bribery or corruption in the past five years. Photo / Thinkstock
A Deloitte survey of almost 400 Australasian organisations reveals almost 20 per cent of respondents with overseas operations have suffered from bribery or corruption in the past five years. Photo / Thinkstock

Increased focus on overseas business opportunities combined with a volatile economic climate is putting organisations on both sides of the Tasman at a greater risk of bribery and corruption, says a report released today.

A Deloitte survey of almost 400 Australasian organisations reveals almost 20 per cent of respondents with overseas operations have suffered from bribery or corruption in the past five years. More than half of the reported cases occurred in the past year, the report said.

While this may be the result of a crackdown by regulators, Deloitte said unstable global markets could also have played a role.

"The combination of economic volatility and a growing focus on offshore operations is increasing exposure for Australian and New Zealand organisations to foreign bribery or corruption," the report said.

"Economic volatility makes winning and retaining business increasingly important and can also increase pressure on management to deliver.

"Further, it creates temptation and incentive to resort to bribery to close the deal, especially in countries where it might be an accepted practice."

The report also argues New Zealand companies in overseas ventures face the added risk of being caught by anti-bribery laws which came into force last year in the United Kingdom.

"If you've got a New Zealand company that has some form of operations in the UK and someone connected to that company gets involved in paying a bribe or corrupt activity in a high-risk jurisdiction [elsewhere in the world], the UK can have a crack at them," said Deloitte's Ian Tuke.

Organisations could be prosecuted for failing to prevent bribery by anyone associated with their company, not simply their own employees, he said.

"A New Zealand company who could be a joint venture in China and have agents working on their behalf, if those agents start paying bribes and the UK gets wind of it and you haven't put in place the framework to prevent corrupt activity you're on the hook."

- NZ Herald

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_a1 at 25 Apr 2014 03:51:29 Processing Time: 474ms