New Zealand:
A Pacific Perspective on Corruption
“Being 100% Pure in a Changing World”
5th ICAC Symposium
Hong Kong,
9-12 May 2012
Adam Feeley
Chief Executive
Serious Fraud Office
New Zealand
100% Pure?
PM dismisses worries of taint to 'Pure' brand
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100% Pure?
The Role of SFO
The Role of SFO
Small law enforcement agency of fraud investigators,
forensic accountants and lawyers, with external
Prosecuting Panel of QCs and Crown Solicitors.
Serious Fraud Office Act: “to detect, investigate and
prosecute cases of serious or complex fraud.”
Memorandum of Understanding with NZ Police: to be
the lead referral agency for all complaints of corruption
in New Zealand.
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The Role of SFO
6
SF
New Zealand’s place in the World
TI Corruption Perception Index: 1995-2011
NZ ranked 1st for 8 of 17 years, and Denmark 1st for 6 of 17 years
Country
Average ranking
Average score
Denmark
2.0
9.53
New Zealand
2.0
9.46
Finland
2.3
9.48
Sweden
4.2
9.24
Singapore
5.0
9.19
Iceland
5.4
9.16
Australia
9.5
8.69
UK
12.9
8.35
Ireland
16.2
7.72
Samoa
62.2
4.23
Tonga
108.2
2.88
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Factors in being ‘corruption-free’
Human development & national culture*
1. Increased human development (HD) = lower corruption
2. National cultures that strengthen the link between
human development and low corruption:
• Citizens disinclination to accept power imbalances in
society
• High levels of individualism
• A society built on traits of achievement; advancement;
and material wealth
• The ability to influence the decisions of others in power.
* A Contingency Theory of Corruption – Sims, Gong & Ruppel
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NZ: The Good; The Bad; and The Ugly
New Zealand: The Good
Democratic Institutions:
NZ
Denmark
High voter participation
5th
9th
Free press
8th
1st
Apolitical public service

Independent judiciary and Govt. ‘watchdogs’

Independent law enforcement agencies

Wide-ranging civil/human rights legislation

Freedom of information legislation

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New Zealand: The Good
Social factors:
NZ
Denmark
High life expectancy
15th
43rd
High literacy
10th
10th
High education enrolment
2nd
4th
High ‘life satisfaction’
11th
1st
High human development
3rd
14th
High gender equality
6th
7th
International reputation for being
‘clean and green’


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New Zealand: The Good
Economic Standards:
NZ
Denmark
High minimum wages
2nd
n/a
Govt. global competitiveness
5th
11th
Economic freedom
4th
11th
Strength of business environment
8th
6th
Low poverty levels
21st
5th
GDP/head
38th
8th
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New Zealand: The Bad
•
•
•
NZ has not ratified UNCAC
Relevant legislation is from 1910 and 1961
No prosecutions for foreign corrupt practice
TINZ 2010 Global Corruption Barometer:
• 4% of NZ’ers admit paying a bribe to win business
(c.f. 0% Denmark; 1% UK; 2% Australia)
• 73% NZ’ers believe corruption is increasing
• Only 44% of NZX top 50 companies have anti-bribery
policies (c.f. 72% UK; 69% USA; 50% Europe)
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New Zealand: The Bad
TVNZ website poll 2011
“Is NZ the least corrupt country in the world?”
47% “Yes, we’re squeaky clean”
57% “No, we’re deluding ourselves”
Auditor-General Public Sector Fraud Survey 2010
•22.5% have seen internal fraud in the past year
•Only 39% of known frauds are reported to enforcement
authorities
•Only 23% receive fraud awareness training
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New Zealand: The Ugly
Public corruption recent years
•R v Field: Cabinet Minister convicted of accepting bribes
perverting the course of justice
•R v Awatere Huata: MP convicted of fraud and
perverting the course of justice
•R v Chapman: Auditor-General convicted of workplace
theft
•R v Nua: Senior Customs official convicted of receiving
bribes
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New Zealand: The Ugly
Public corruption recent years
•R v Palmer: Official within GSF convicted of insider
trading on confidential government information
•R v Mason: Government property manager convicted of
receiving bribes/hospitality for approving leasing
contracts
•R v Griffiths: Government property manager convicted of
receiving bribes to secure leases
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The Changing Face of NZ Society
The Changing Face of New Zealand
Ethnic diversity
Different values, different practices:
R v Field – Thai and Samoan “cultural expression of
gratitude” included gifts and payments
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The Changing Face of New Zealand
Growing gap between rich and poor
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The Changing Face of New Zealand
• Increasing influence of transnational organised crime:
Vicam (Auckland) Ltd; SP trading Ltd – NZ ‘shelf’
companies aiding international criminal networks
• Increasing dependence of NZ companies on
international trade:
“Kiwi Firms Must Work Around Corruption” – Prime
Minister John Key
• Growing international links:
Oceania ‘vote selling’ for FIFA 2018
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The Changing Face of New Zealand
‘Corruption’ a more frequent media issue
2008 election:
Political party
donations:
‘Glenngate’
3000
2005 election:
Exclusive
Brethren &
Labour's
pledgecard
2500
2007:
Electoral
Finance
Act
1999:
Labour
campaign
on Govt.
sleaze
2000
1500
1000
2010:
Minister
credit card
scandal
1996:
First MMP
Election
2009: MP
expenses
debate;
Early 1990s:
Diversification of
political parties in
NZ
Ex-MP
Phillips Field
convicted of
corruption
500
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0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Staying ‘Pure’
What Can Be Done – Domestically
•
•
•
•
•
•
Promote much more discussion about corruption
Education for NZ companies at risk of FCP laws; e.g.
UK Bribery Act
Work to ratify UNCAC
Work to modernise bribery/corruption legislation
Work with TI, IBE etc. to promote public expectations
around ethical corporate behaviour
Acknowledge the economic link between the “100%
Pure” & “Clean and Green” brands and the
international reputation for being corruption-free
There is no basis for complacency!
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What Can Be Done - Internationally
1.
2.
•
•
An international crime needs international solutions
The law enforcement solutions are multi-layered
Prevention: Education
Detection: Intelligence sharing: International agreements:
s.51 SFO Act: “The Director may enter into any agreement or
agreements with any person in any other country whose functions
include investigation or prosecution of fraud”
•
•
•
Investigation: Joint operations: s.36 SFO Act
Prosecution: Common objectives; effective outcomes
- ICAC/NZ SFO
Reform: Alternative powers and sanctions
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Conclusion
Corruption in Society
History is no guarantee to future corruption trends
Corruption is a growing threat to previously ‘pure’
countries because:
•Crime is increasingly trans-national
•Rising social inequality in a post-GFC era
•Societies are increasingly diverse and fragmented with
differing and values
Every country will have (or need to find) their own unique
motivators for deterring corruption.
•The “100% Pure” reputation resonates emotionally with
Kiwis, but also has important economic value
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Corruption & Law Enforcement
Cooperation and Coordination
•The good must associate, but the talented must also
teach
•Operational pragmatism not legal bureaucracy
•Forum for building operational links
•Nothing succeeds like success…and trusted
relationships
•“100% Pure” is an admirable goal for us all
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THANK YOU.
QUESTIONS?
WWW.SFO.GOVT.NZ