Michael Morris: United front required to combat corruption

Widespread systemic corruption is not an issue that leaps on to New Zealand's electoral stage once every three years.

We locked up a former MP this year for fraud, and in 1997 we locked up an Auditor-General for the same crime, but, deplorable though these cases may have been, they are notable because of their rarity not their frequency.

New Zealand, according to the index published annually by Transparency International's secretariat in Berlin, is one of the least corrupt countries in the world, second equal with Finland and only behind Iceland.

This means that all of the countries in which we do business are more corrupt than we are, and many of them significantly more corrupt.

Recent concern that New Zealand companies may have been party to the payment of bribes to the regime of former Iraqi President Saddam Hussein, via the UN Food for Oil programme, has focused attention on the ethical standards of New Zealand businesses, especially exporters.

Although the companies have been found not to have paid any bribes, our exporters trade amid varying degrees of corruption, and taxpayers' funds are used by New Zealand's diplomats and our international aid agency, NZAID, to help combat corruption abroad.

Regrettably, few of the people who run New Zealand's export businesses know that they risk prosecution if they stoop to the standards of some of their competitors and of the officials in the countries in which they trade.

New Zealand is a signatory to the OECD anti-bribery convention, and in 2001 Parliament passed legislation making it a crime for a New Zealand citizen or company to pay bribes to public officials of a foreign country, even if the bribe is paid in a foreign country.

This law was passed as more and more countries began to realise that corruption was a huge contributor to inequality and poverty and an understandable cause of much of the world's social and political unrest.

In many developing countries, bribes ensure the rich get richer while the poor suffer through the replacement of pharmaceuticals by inferior or even dangerous, counterfeit drugs.

Bribes allow building codes to be regularly bypassed, only for buildings to collapse from earthquakes or floods.

Bribes allow huge contracts to be awarded to the wealthy cronies of the national elites.

Relief for the victims of natural disasters gets stuck on wharves or on-sold and never reaches those who need it.

The result of this is more suffering, growing inequality, entrenchment of undemocratic and unaccountable governing elites, accumulating popular resentment and eventual outbursts of destructive political upheaval - and yet more suffering.

The international community wants to sever this vicious cycle. But conventions sponsored by the OECD and the UN show a realisation that corruption can not be countered if it is only confronted by a leaky, fractured front.

The more nations that stand together the more effective the action, and New Zealand's Parliament has decided that this country should form part of such a united front.

This is no small matter, as exporters of goods or services will face pressure for bribes from foreign politicians and customs and procurement officials. At the same time, some of New Zealand's competitors will be offering bribes.

It is all too easy to take the attitude that we may as well do as everyone else does.

But it is not possible to reconcile willingness to turn a blind eye to offshore bribes, with a society which seeks to adhere to the rule of law at home. We can't condemn bribery at home then ignore our own laws intended to combat foreign bribery.

It is our willingness to abide by the law which gives us a reputation for integrity. If we are to expect our domestic laws to be observed it is not tenable to argue that some laws should be observed and others ignored.

Actively fighting corruption is also in our interests as a trading nation which has made a virtue of shunning subsidies and letting our businesses survive on their own merits.

The more we can bring a united front in the international campaign against corruption, the better it will be for our exporters, who face obviously unfair competition from those who willingly pay bribes.

Unfortunately, while New Zealand has made the right legal moves, little has been done by the Government and the relevant professions to make our exporters aware of the legal risks they face if they pay bribes overseas.

Research by Transparency International New Zealand, presented at the OECD earlier this year, found almost nothing had been done to make New Zealand businesses aware of the 2001 anti-bribery law.

The accounting and legal professions have been equally inert.

Considerably more effort is needed to ensure that New Zealand businesses and professions are aware of the law and are enlisted in the global campaign to combat corruption.

Without some action to back up our legislation we are likely to be seen as hypocritical, and face the added risk of importing into our own relatively clean environment the business practices that we condemn overseas.

If we do not see more action on this front, the novelty of seeing an MP or an Auditor-General locked up for fraud may become less novel and our reputation, which is of incalculable value, may be irreparably damaged.

* Michael Morris is chairman of Transparency International New Zealand (TI-NZ), a chapter of Transparency International, the only international anti-corruption movement.

* Declaration of interest: TI-NZ will be receiving funds from NZAID to support the work of the Pacific chapters of Transparency International.