Three cases

  • Category:
    Business
  • Document type:
    Case Study
  • Level:
    Undergraduate
  • Page:
    4
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    2659

Australia Corruption Cases 4

AUSTRALIA CORRUPTION CASES

(Student Name)

(Lecturer)

Introduction

Corruption is one of the plagues which keep on affecting and haunting the modern nation. Several agencies and corporations within the contemporary countries engage in practices which violate the Global Anti-corruption agreements. In several countries, various agencies and commissions exist which perform the watchdog role over corruption activities in the country. However, research proves that many agencies have failed to carry out their intended roles leading to a heightened corruption index in the global front.

Australia remains as one of the countries which actively participate in the corporate world. Various corporate and business entities in Australia engage in international activities. This has attracted the attention of the global anti-corruption agencies mandated to perform an oversight and prosecutorial roles for companies implicated. One challenge which continues to face the Australian government is the unwillingness and lack of action of the country to investigate and prosecute major corruption scandals in the country. This paper intends to discuss the case of BHP as one of the renowned mining companies in the country and its ethical stand. Also, this paper seeks to establish the corruption cases in Australia and the manner in which the country handles most of these cases. This assessment focuses on determining whether the country has lost the war on corruption and the recommendation to make MNC more ethically responsible and active.

BHP’s Ethical stand

BHP Billiton is one of the leading companies in Australia. The company engages mostly in metal mining activities and operates international networks. The major scandal which implicated the company regards the hospitality gesture for top most managers and personnel in the government in the corporate world. The company extended an invitation to 176 government officials including 98 top most managers in the corporate scene to attend the 2008 Olympics. The initiation followed the ‘Global Hospitality’ platform where a company could invite individuals; cater for their costs and hospitality requirements for attending the games. This gesture by the company attracted the local and global anti-corruption agencies. The main argument was that BHP Company followed irregular methods to make the invitation, to make the expenditure and also to target those who made a great impact in the company affairs (Vaughn 2012).

The hospitality gesture to top government officials has been argued as a way of influencing their decisions and attitude. Besides, the invitation and the means of expenditure failed to follow the anti-bribery and corruption laws which Australia subscribes to. The decision by the company to invite various officials who had the power of influence and directly involved with the company was deemed to be a violation of the Foreign Corrupt Practices Act. The global players came in to investigate and assess the occurrence in the process of invitation. The gist of the matter was that a majority of those invited by the company were mainly government officials, suppliers and customers of the company. The process of making invitations to tem never took into consideration the internal controls beneficial to prevent any corruption scandal.

One challenge which cropped up in the invitation process regarded the insufficiency or lack thereof of the internal compliance function. The company had not yet established proper compliance functions to mitigate possible corruption case. This led to the company settling the charges that went up to about $30 million. The company never agreed nor denied the corruption allegations. However, it complied with the charges and played the whole amount as agreed by the courts (Groves 2014).

The ethical stand of the company was that it extended such invitations under the ‘Global Hospitality’ platform requirements. The management further admits that it had no proper internal controls in place at the time of making such invitations. One challenge of the action taken by BHP Billiton relates to the possibility of seeking favourable corporate and business environment and favours (Sarre, Das & Albrecht, 2004). The company extends lavish gifts and spends a lot of money hosting such a huge list of invitees in the hospital games. The challenge posed in this kind of practice is the violation of the anti-corruption policies which would have prohibited the expenditure of such enormous money on self-interest. Most of the people hosted in this event had a direct link with the company. Therefore, it’s deemed that they sought to satisfy their interest by using the coffers of the company (Finch 2012).

Proper codes of ethics demand the performance actions which have a common good for the society as well as for oneself. In many instances, those who engage in ethical conducts tend to maximise the good by limiting and reducing any forthright harm from their actions. The holders of various offices and positions within the society are expected to behave in moral manner and pattern as a means of enhancing the ethical evidence in the society. The managers of a reputable company such as that of BHP are entrusted with the assets and the decisions on behalf of the members and the community. It’s incumbent upon the management to ensure that the decisions made have a positive impact on the resources in such a company as well as the position entrusted to them by the members and various shareholders (Finch 2012). This, therefore, requires an utmost due diligence in the manner of handling the assets of the company. Lack of proper internal controls exposes the management to possible corruption incidents. Also, making decisions which appear to be in contravention with the anti-corruption agencies equally instigate thoughts of mismanagement of the resources.

The practice of applying the assists (money) of the company without the institution of proper control mechanisms poses a great challenge to the accountability of the company. Besides, most of the people who benefited at the expense of the company included the customers and the directors of other companies. The intentions of management at these cases are deemed as non-ethical and meant to waste the coffers of the company. Scholars argue that the process of selecting those to invite to the functions and further the expenditure on lavish accommodation and gifts were penetrated by corruption (Vaughn 2012). This is an allegation which the management of BHP Billiton failed to justify or deny. Therefore, the practice raised eyebrows since it defeated the doctrine of ethical conduct and instead sought to justify self-interests and waste resources. This was later confirmed by the arguments of the anti-corruption agencies.

Australia losing its reputation by lack of proper enforcement framework

The fight over corruption remains as one of the top agenda issues for any successful government. The multi-million corporate institutions and the government agencies normally engage in various major transactions which warrant watchdog authorities to be on the alert and consider possibilities of divergence of anti-corruption laws. In many countries such as Australia, there exist watchdog authorities which came to force under the domestic laws of the countries. Also, some global anti-corruption agencies reside within the country to help monitor the activities of various multinationals and government operations. The Federal government is mandated to ensure that these bodies work in unison to bring great checks and balances to the Australian people over the action of the government and business entities in the country.

Recently, there has been growing outcry regarding Australian’s willingness to combat crime. Corruption is one of the major crimes that continue to face the country. However, little is attributed to the government regarding the intended strides towards combating crime in the country. One of the fundamentals of this argument concerns the lack of willingness to prosecute several cases brought to the attention of the MNCs and lax legal enforcement authorities (Sawer et al. 2009). The anti-corruption laws are in place, but the willingness to enforce such laws is greatly missing within the various government agencies. Scholars argue that the reluctance of the government and various law enforcing agencies to expedite execution of corruption cases has a sled to increase in the growing reported cases in the country. The processes of investigation of these cases have been reported to slow down. Besides, the ability to prosecute the already investigated cases suffers from laxity of the various bodies stacked with such a mandate (Finch 2012).

One of the requirements of an established government such as Australia is to have an efficient anti-corruption framework and bodies which investigate the report and recommend for prosecution the already identified cases. This series of activities requires the willingness form the government and the goodwill to expedite the reporting and investigation of corruption cases. Major scandals which happened in the country failed to be prosecuted. This has concerned the global watchdog authorises which continue to raise much concerns over the Australian government regarding its willingness to execute these corruption cases.

Several cases such as that of the Australian Engineering giant called Worley Parsons accused of global corruption scandals and using the money to secure foreign investments have failed to attract prosecution form Australian government. In fact, the Transparency International rating of Australia has extremely gone down. This is associated with its laxity in investigating and prosecution the corruption cases in the country. This has forced various international agencies such as OECD and other US regulators to come in and take up some of the cases. The global attention has been drawn to major international companies resident in Australia and top management officials indicted and also mentioned in mega scandals (Caiden 2001). However, most of these cases recommended to the Australian government pass without prosecution. This is attributed to laxity in the MNCs as well as the lax legal systems in the country. Scholars attribute the little commitment from the government to the growing and rise of several cases going unmentioned and ignored by the Australian government.

Australia has now been regarding as one of the countries slowly losing their reputation due to lack of a proper framework to execute corruption cases and expedite reforms. The international agencies continue to rise concerning Australia’s commitment towards the fight against corruption. Also, the loopholes which exist in the legal systems of the country have equally added to the level of reluctance in prosecutorial functions. For example, the AFP agencies have not been sufficiently empowered to take up prosecutorial functions. Besides investigation, this agency simply reports the findings to other authorities in charge of continuing such cases. Lack of empowering of such agencies has led to a reduced fight of corruption. The reduction in the rating of the Transparency International pitting the country among many corrupt nations has further injured the reputation of Australia in a great deal. This remains to be a matter of concern to the country.

Australia to overhaul its laws to make MNCs ethically responsible

Ethical responsibility remains as one of the guiding principles for any agency or organisation seeking to advance and be successful in its pursuits. Several cases souring the Australian government and its agencies to fight and combat corruption have attracted the global attentions. Major scandals happening within the country and those implicating top managers in the country have gone uninvestigated. In other cases, the investigated cases have failed to see the light of the day and therefore failed to be prosecuted. This has agitated global concerns since Australia is one of the signatories to the fight against corruption. One of the reasons attributed to this laxity in combating corruption in the country relates o the weaknesses in the legal framework. The country is believed to be having several loopholes and weaknesses in the legal framework (Sawer et al. 2009).

In many cases, MNCs have been able to identify some of the cases worth consideration against the anti-corruption radar. The identification process has however yielded little fruits since the legal framework within which these agencies operate and perform their roles. The MNCs have recently been accused of their reluctance towards combating crime and other corruption cases. This has worsened the countries rating regarding transparency trading. Currently, the country rates poorly regarding in its willingness to combat and fight cases of corruption. The main role of MNCs is to ensure that the corruption cases have been thoroughly investigated and considered for prosecution. These bodies operate under global anti-corruption laws that empower them to investigate and report cases of corruption for purposes of prosecution. Therefore, the templates of the framework within which these bodies operate originate from the global legal system (Vaughn 2012).

However, the Australian government plays a significant role in determining possible success or failure of these agencies to successfully investigate and recommend prosecution of many corruption cases in the country. Australia operates under its domestic constitution which warrants the government to establish the legal framework and the various agencies to help combat corruption in the country. These domestic legal systems need to work in harmony with those of the global players to combine and help fight the menace. There has been a recent outcry from several quarters in Australia concerning the extent to which the government is committed towards fighting cases of corruption. Most of these quarters remain pessimistic towards the establishment of the legal framework in Australia to support the fight against cases of corruption.

To overhaul the entire laws governing MNCs as a means of ensuring ethical responsibility is not one of the best practices. Usually, the ethical practices are provided within the codes of operations and guiding principles of a given body, organisation or agency. The legal framework simply provides the authority to execute such activities and to ensure that such an entity maintains its ethical behaviour. The existing laws in Australia clearly provide a good framework within which MNNCs operate and ensure the prosecution of the corruption cases. However, the success is blocked by the unwillingness of the government and lack of empowering of prosecutorial functions (Sarre, Das & Albrecht, 2004).

Currently, the prosecutorial roles are not within the purview of MNCs. Therefore, the best thing to being done is to empower the MNBCs by strengthening the existing legal framework. Besides strengthening the existing laws, the other practice needs to be born within the management of the MNCs. They need to take up their duties as stated by their governing statutes and ensure that they perform according to their expectations. Any complacent holder of office needs to be substituted by individuals willing to work and enforce the existing laws to combat corruption cases.

Conclusion

The fight over corruption remains as one of the greatest duties of every government. The modern world constitutes of various activities which require utmost regulation and oversight. Some of these ativities lead to massive loss of money. Therefore, every country has remain vigilant in ensuring that the public or the citizens do not lose money through corrupt dealings with the government agencies, bodies or the corporate institutions in the country. Also, the global front has equally ensured that it comes up with various laws to ensure much focus on the cases of corruption (Australian income tax legislation, 2009).

Australia is one of the countries that are currently plagued by these scandals. Major global and international corporate institutions resident in the country have been accused of engaging in corruption cases. However, the Australian legal framework has failed to combat most of these scandals. This has further raised international concern and participation. This paper has focused in the case of BHP and other instances where the MNCs have failed to ethically engage in its roles as expected by the legal framework in combating corruption.

References

Australian income tax legislation 2009. (2009). North Ryde, N.S.W: CCH Australia.

Caiden, G. E. (2001). Where corruption lives. Bloomfield: Kumarian Press.

Finch, N. (2012).Contemporary issues in mining: Leading practice in Australia. Basingstoke, England: Palgrave Macmillan.

Groves, M. (2014).Modern administrative law in Australia: Concepts and context.

Sarre, R., Das, D. K., & Albrecht, H.-J. (2004). Policing corruption: International perspectives. Lanham [u.a.: Lexington Books.

Sawer, M., Abjorensen, N., & Larkin, P. (2009).Australia: The state of democracy. Annandale, N.S.W: Federation Press.

Vaughn, R. G. (2012). Successes and failures of whistleblower laws. Cheltenham, UK: Edward Elgar.