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Deloitte Bribery and Corruption Survey 2017

by Suzanne Snively

Chair, Transparency International New Zealand

Deloitte launched its annual bribery and corruption survey "One step ahead—Obtaining and maintaining the edge Deloitte Bribery and Corruption Survey 2017 Australia and New Zealand."

To launch its survey, Deloitte organised panel events in Christchurch, Wellington and Auckland. These events were well-attended, with informed questions from the audience following the presentation of the survey results.

The Panama Papers and the Auckland Transport procurement case have brought corruption much more into the public’s consciousness.

Roughly 22% of the respondents experienced corruption over the past 5 years.

According to the survey, more than 1 in 5 organisations reported recent incidents of corruption in their organisation, slightly up from 2015.

An important insight from the survey is how organisations found out about corruption. The main source of information was from “tip-offs”, from people generally referred to as whistleblowers. The 2017 survey found an increase in tip-offs from external parties being reported as a corruption detection method.

The survey provided a comparison of the types of corruption. The types that have changed the most since 2015 are:

  • An increase in undisclosed conflict of interest
  • An increase in excessive commissions
  • A reduction in supplier kickbacks

By far the most respondents named undisclosed conflict of interest as the form of corruption they observed.

Consistent with the 2015 survey responses, 80% of the respondents do not see domestic corruption as one of the top 5 risks to their organisation. This meant, however, that 20% of respondents did regard corruption as one of their top 5 risks.

The question remains as to whether this low percentage reflects actual levels of corruption and/or to the light-handed approach to identifying, monitoring and reporting corruption. Given the limited detection methods reported by organisations, it’s interesting that any corruption has been found.

Reputational risk is seen as the key downside impact from the failure to address and mitigate corruption.

Two-thirds of the respondents regard reputational risk as a key impact, making this the top risk. The downside risk of fines and imprisonment was only chosen by approximately 10% of respondents.

Conflict of interest is the most common form of corruption over the last 5 years by the Deloitte survey responders.

Four out of five respondents considered organisational culture as a key in preventing domestic corruptionn–nslightly up from 2015

Foreign Bribery

Consistent with the results for domestic bribery and corruption, 20% of respondents see foreign bribery and corruption as one of the top 5 risks to their business which is a slight decrease from 2015.

Less than half of the organizations surveyed have conducted a foreign bribery and corruption risk assessment. This is particularly concerning and a decrease since 2015.

Deloitte reports greater international cooperation, collaboration and benchmarking between law enforcement agencies to facilitate cross-jurisdictional investigations.

It noted that in recent years, New Zealand has progressed in its detection of fraud earning the reputation for providing companies with a low corruption marketplace.

The launch attendees gave the impression that a turning point has been reached. Greater awareness of the nature of corruption and reputational risk is resulting in more effort going into "tone at the top", codes of conduct, and bribery and corruption risk assessments.

There is a growing appreciation that the costs of bribery and corruption are high and investing in professional prevention is worthwhile.

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