Organised Crime and Anti-Corruption Legislation Bill
A step towards a comprehensive New Zealand anti-corruption and bribery framework
Transparency International New Zealand welcomes discussion of the Organised Crime and Anti-Corruption Legislation Bill, which was introduced into Parliament on 25 June 2014.
The omnibus Bill contains amendments to existing New Zealand legislation aimed at targeting and further disrupting the activities of organised criminal groups. The legislation also seeks to enhance New Zealand’s anti-corruption legislation framework and bring the country in line with international best practice set by international conventions.
What does the Bill do?
In the anti-corruption sphere, the Bill should allow New Zealand to ratify the United Nations Convention against Corruption (UNCAC), a long-awaited step because New Zealand’s signing of the Convention back in 2003. It also enables the implementation of the Agreement between United States and New Zealand on Enhancing Cooperation in Preventing and Combating Crime, and improves New Zealand’s compliance with a number of other international conventions. (These include the OECD Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions, the United Nations convention against Transnational Organised Crime, and the United Nations Anti-Trafficking Protocol).
The Ministry of Justice's Departmental Disclosure Statement for the Bill outlines the anti-corruption legislative amendments as including:
- amendments to the definition of “crime involving dishonesty”, “business” and “routine government action” in the Crimes Act to ensure the foreign bribery offences applies to bribery in relation to the provision of international aid and the facilitation payments exception is not open to abuse;
- amendment to the foreign bribery offence in the Crimes Act to ensure that New Zealand can prosecute foreign bribery regardless of whether it was an offence in the country in which the conduct occurred;
- amendment to the Crimes Act to criminalise the acceptance of a bribe by foreign public official and the acceptance of a bribe in return for using one’s influence over an official;
- amendments to the Companies Act 1993 to clarify the obligation of companies to record small facilitation payments in a consistent manner;
- amendment to the Mutual Assistance in Criminal Matters Act to ensure that New Zealand can provide international assistance in corruption investigation and prosecution.
Facilitation payments still legal
As the Bill stands, no amendments have been made to change the current legality of facilitation payments. It is not considered "bribery of a foreign public official" under the Crimes Act if a person makes a payment for the sole or primary purpose of ensuring or expediting the performance of a foreign public official of a routine government action, and the benefit’s value is small. Therefore, New Zealand has not adopted the approach taken by the UK Bribery Act 2010, which does not recognise the legality of facilitating payments, and does not draw any distinction between a facilitation payment and bribery.
The Bill also includes a new provision, which clarifies the ability of a body corporate to commit the offence of bribery of a foreign public official. However, it seems unclear why the Bill expressly makes this clarification for bribery by a body corporate of “foreign officials”, but not for domestic officials. This "foreign" distinction for the body corporate offence is not yet explained in any report or Regulatory Impact Analysis.
A positive development towards a comprehensive New Zealand anti-corruption and bribery framework
One key recommendation from the TINZ Integrity Plus New Zealand 2013 National Integrity System Assessment (Assessment) is for New Zealand to develop a comprehensive national anti-corruption strategy combined with a rapid ratification of UNCAC. The Bill is a positive step toward the legal framework for this recommendation. The Bill also addresses some major risks to New Zealand’s Integrity systems raised in the Assessment.
TINZ looks forward to seeing the progress of the Bill, and hopes that it will contribute to ongoing national awareness of corruption issues, and promote New Zealand’s zero tolerance of bribery and corruption, whether at home or overseas. As it moves through Parliament, TINZ will evaluate the Bill’s content to assess whether it provides the necessary update to New Zealand's anti-corruption legislation.
The full provisions of the Organised Crime and Anti-corruption Legislation Bill are available online through the www.legislation.govt.nz website.
The full report and executive summary of the Integrity Plus 2013 New Zealand National Integrity System Assessment are available online at www.transparency.org.nz.
In This Issue
Anti-Corruption Training Workshops
Following the successful launch of the Anti-Corruption online training in June, BusinessNZ teamed up with Deloitte and Chapman Tripp in September to deliver further training around the country. BusinessNZ has published a free downloadable anti-corruption guide developed by Deloitte and Chapman Tripp which was the basis for the face-to-face training.
Daniel Kalderimis and Josh Blackmore of Chapman Tripp, along with Lorinda Kelly and David Seath of Deloitte visited seven locations around the country to provide interactive workshops to the BusinessNZ and ExportNZ network. The sessions were very well received with participants benefitting from the legal and operational risk experience shared by the presenters and some of the attendees.
Attendees included a significant number of exporters to countries that rank as high risk on the Transparency International Corruption Perceptions Index. There were a number of interesting discussions regarding the actual corruption situations that have occurred.
Deloitte will now follow this up with their second Australia and New Zealand Bribery and Corruption Survey scheduled for publication in early 2015.
Corruption Report 2014
Positive developments for New Zealand, but more still to be done
On 23 October 2014, Transparency International released a report on OECD Anti-Bribery Convention enforcement and called for New Zealand to implement draft legislation to ratify the United Nations Convention against Corruption.
The report improved New Zealand’s country placement in 2013 of "Little or No Enforcement" of the OECD's Anti-Bribery Convention to having “Limited Enforcement”. The Convention requires each signatory country to make the bribery of foreign public officials a crime. New Zealand’s improved ranking follows two formal investigations into bribery of foreign public officials, with one investigation reported to be ongoing at the end of 2013.
Transparency International New Zealand (TINZ) director Fiona Tregonning said the SFO’s formal investigations sent a message that New Zealand took bribery allegations seriously, and would not ignore bribery by its citizens or companies anywhere. She called on the New Zealand enforcement agencies to sustain their vigilance and take action to deter New Zealanders from paying bribes in any country.
The report also notes that two significant developments occurred in June this year after the close of the reporting period:
“After the reporting date, TI NZ welcomed the introduction of the long-awaited Organised Crime and Anti-Corruption Legislation Bill, an omnibus bill, which when passed should enable New Zealand to finally ratify the UN Convention Against Corruption and increase New Zealand’s compliance with the OECD Convention.
“New companies legislation has also been introduced during 2014, which includes strengthening the rules applying to the registration of companies and a new ‘resident director’ requirement. This follows concerns about New Zealand's company registration regime being misused by offshore criminal operations”.
Ms Tregonning said, “We are aware the government has been working to advance the framework for an anti-corruption strategy for New Zealand. These recent developments show positive progress and their implementation will demonstrate renewed government interest and commitment. However it has taken an extraordinarily long time to get traction and we need to harness the interest and take meaningful action to ensure that New Zealand does not lag behind other countries”.
She added “it is hoped that a national anti-corruption strategy will be a way of emphatically demonstrating a collective government, business and community commitment to being corruption-free. It is important to reinforce that involvement with corruption will not be over-looked in New Zealand”.
This is the tenth Transparency International progress report on implementation of the OECD Anti-Bribery Convention.
The report is available on the Transparency International New Zealand website Exporting Corruption 2014.
The OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, adopted in 1997, requires each signatory country to make foreign bribery a crime for which individuals and enterprises are responsible. The convention is a key instrument for curbing the export of corruption globally because the 40 signatory countries are responsible for approximately two-thirds of world exports and almost 90 percent of total foreign direct investment outflows.
The OECD Working Group on Bribery, which represents the signatories to the convention, conducts a follow-up monitoring programme each year. The Working Group undertook the Phase 3 assessment of New Zealand during 2013.
Peruvian Jose Carlos Ugaz Sanchez-Moreno New Chair of Transparency International
Lawyer Jose Ugaz was elected as the new Chair of Transparency International on 20 October 2014 at its Annual Members meeting.
During pre-selection interviews with representatives of the Pacific TI Chapters in Berlin, Jose was honest about his limited knowledge of the Pacific, tending to look east from Peru. At the dinner following his election, he made a special point of telling Pacific Chapter Chairs, Fiji”s Donaisano Ruru, New Zealand’s Suzanne Snively and PNG’s Lawrence Stephens, that he would pay attention to the issues in the Pacific including a tour of the region early in his role as TI Chair.
Jose takes over from Canadian, Huguette Labelle who has been the Chair for the last 9 years. TI has had three chairs in its history with the first Chair, Peter Eigen, who with Huguette will continue as Individual Members.
Jose is an outstanding lawyer, having been ranked as the number one lawyer in Peru in 2002 and in the top six over the next six years. Since 2008, he has been a member of the International Anticorruption Conference (IACC) Council. As an Individual Member of Transparency International, he represented TI at the International Convention Against Corruption in Washington DC in 2010. Elected as a Director at the 2011 Annual Members meeting, Jose has been on the TI Board for the last three years.
Over the years, Jose has supported many national and international TI activities, from police reform efforts in Honduras, summer schools for youth against corruption in Lithuania and Russia and working as an expert member of the working group that prepared the handbook for practitioners in Asset Recovery. He has also presented in many countries on money laundering, to the UNCAC General Assembly, the Bar Association, Chaired the TI No Impunity Initiative and was keynote speaker at UNCAC at Panama in 2013.
Jose is particularly well known for his time in jail for his anti-corruption activities related to the former Peruvian President Fujimora and Montesinos cases, covered by his book "Caiga quien Caiga". As a result of his legal proceedings, key politicians were jailed.
Jose's term continues until the Annual Members Meeting in 2017; having been first elected to the TI board in 2011, Jose is eligible for up to nine years as Chair.
Elena Panfilova Elected Vice-Chair of Transparency International
Moscow-born Elena Panifilova was elected as the TI-Vice Chair at the 2014 AMM.
This followed her election in 2011 as a Director of the TI Board where she chaired the Board’s SAFE Committee and was a member of both the Integrity Awards and the Communications Committees.
Elena was active last year when the G20 was in Russia and visited Melbourne during the C20 in June to promote the progression of anti-corruption recommendations to the G20 meeting in Brisbane in November.
Previously, Elena served as Executive Director of TI Russia from 1999 until 2014 when she was elected Chair of the TI Russia Board. In 2008, Elena launched the Laboratory for the Anti-Corruption Policy, a joint project of the State University Higher chool of Economics and TI Russia, serving as Deputy Head of the PUL AP for five years prior to being appointed as its Head in 2014. In parallel she teaches political science and anti-corruption policy in the State University Higher School of Economics and in the Lomonosov Moscow State University.
Elena served as a member of the Russian Presidential Council for Civil Society and Human Rights from 2008 until 2012. Since then she joined the Governmental Commission on Open Government chaired by Russia's Prime Minister. She currently Chairs the Commision’s working group on anti-corruption.
Elena has published several books, articles and columns on the issues of transparency and anti-corruption, on political corruption and the specifics of anti-corruption policies in Post-Soviet states. She anchored a TV programme on anti-corruption fo the Russian independent TV Rain Channel. In 2014, Elena was ranked 58th of the 100 Most Influential Women in Russia.
Transparency International Elects Six Board Members
Elections during Transparency International's 2014 Annual Members Meeting portend massive changes to the movement. Not only did the members elect a new Chair and Vice Chair, but six of ten directors positions were also contested with only three incumbents running. The elections provided the organization and its members an unusual opportunity to establish its direction for the future.
In the election, the three experienced directors were elected--Incumbent Jeremy Carver from the UK, Sion Assidon from Morocco, past director and Incumbent Elisabeth Ungar Bleier from Colombia first elected in 2011. New to the board are American Mark Mullen from the Georgia Chapter, Emile Carr of Sierra Leone and Venezuelian Mercedes de Freitas.
Transparency International Secretariat Board 2014. Please visit the Transparency International Website for more information.
New Zealand Sports Governance Strong from an International Perspective
"New Zealand leads the world in many areas when it comes to prevention of corruption in sports," concluded Josephine Serrallach, who attended a workshop on Corruption in Sport, organised by Transparency International at its Annual Members Meeting held this year in October in Berlin.
Contribution by a number of countries to the workshop highlighted the great differences in the behaviours of sports associations in relation to their response to corruption situations. Their responses range from match fixing and briberies to the lack of transparency and withholding of information, as in FIFA’s case.
Representing TINZ, Josephine presented the other end of the spectrum with specific examples of sports associations in New Zealand working on prevention. For example, the New Zealand Rugby Union demonstrates leadership and commitment to address corruption with its recent initiative to form an 'Integrity Committee' with the role of training its member unions and players about management of risks associated with the sport.
The engagement of Transparency International Chapters with sports associations is a relatively new activity for TI and there is currently work in progress in a number of countries. For example, Transparency international UK has developed a guiding document to prevent match-fixing In football at club level with the aim of safeguarding "the beautiful game". TI Greece is also actively producing leaflets on guiding principles for the use of football players. TI Spain has made a number of agreements with sports associations to reaffirm the commitment of eliminating corruption at all levels.
The IRB (International Rugby Board) has launched an anti-corruption website. The European Union has made good governance in sport a priority because there is a close link between a sport's organization governance and levels of corruption (integrity off the pitch and on the pitch).
The topic of corruption in sport has caught the attention of politicians, sponsors and fans.
It is good that they are finally paying attention with an estimated US$700 billion involved in match-fixing. The greatest threat for sport is manipulation of sport results to make money through gambling, heightened by the growth in electronic and internet gambling. The pressure to act against this wave is increasing and the question is how to prevent a tsunami.
Sports organizations are generally poorly prepared to cope with corruption. The lack of operational transparency and effective checks and balances has allowed the dark site of the sport to be cloaked in secrecy. Sponsors have been long silent, but are beginning to question the potential reputation damage to their brands.
With this climate, TI has started to advise sports organizations ( e.g. FIFA and the International Cricket Council) on how to build up integrity systems to avoid corruption. At the formal TI Annual Members Meeting (AMM) held 19 October 2014, a resolution was passed by the 95 country chapters and 32 independent TI members calling on FIFA to publish the report produced by its Ethics Committee, known as Garcia Report, which up to now has been kept secret.
In summary, based on a comparisons at the Berlin TI meeting, it appears that New Zealand sports organizations have better governance and a more ambitious focus on prevention and building strong integrity systems in sport than other countries. The international research about the costs of corruption emphasised the importance of remaining vigilant here as well as achieving the goal of ensuring that New Zealand sports are corruption-free at all levels, whether participating locally or internationally.
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TINZ Annual General Meeting
TINZ's Annual General Meeting is scheduled for late November in Wellington. Details will be sent to TINZ members. .
2014 Corruption Perceptions Index
The 2014 version of TI’s annual Corruption Perceptions Index will be released early December.
In Case You Missed It...
TINZ Directors Needed
Help Set the New Zealand
The TINZ AGM will be held as usual in November this year. Three Directors are standing down this year and the AGM provides an opportunity for electing new Directors to replace them.
Directors are required to be TINZ members and to be nominated by an existing member based on a short essay on why they want to be members, accompanied by a CV. People with relevant experience, commitment to principles of integrity and time to donate to the organisation, are actively are encouraged to apply. TINZ has 11 1.5 hour Board meetings a year, a strategic planning day and an AGM.
To apply, download a Director's Nomination Form and request nomination from existing members.
New Zealand Ranks High
New Zealand Named Fifth Most Resilient Country and Second in World's Best Tax Rate Systems. Article
G20 whistleblowing laws -- are they hitting or missing the mark? A lesson from Australia AJ Brown, TI Australia, NIS Contributor
State Services Commission Integrity and Conduct Survey 2013
Updated 19 August 2014. High levels of integrity and conduct are vital for high performing, trusted State Services. The Integrity and Conduct survey is an important tool that measures State servants' perceptions of integrity and conduct in their workplace. It also gauges changes in the levels of integrity and conduct across the State Services. Read more on the State Services Commission website.
Transparency International New Zealand in partnership with The Serious Fraud Office and BusinessNZ has released a free online Anti-Corruption Training module.
Demands for FIFA Transparecny
Investigator Demands Greater Transparency in FIFA
Transparency International calls on FIFA to publish its investigation into the 2018 and 2022 football World Cup awarding process. If there is bribery, those implicated should be held to account and there should be no cover up.
Exporting Corruption Media Release
Major exporters still lag in enforcing rules against foreign bribery TI Press Release.
B20 Anti Corruption
Notworthy is the emphasis placed on anti-corruption by the B20 Working Group. B20 Anti-corruption Working Group Report to the B20 Office and Taskforce Chairs.
Major Transparency Move in Fiji Post Elections
The Fiji Auditor Generals Financial Reports for the period 2007 to 2013 will be tabled in the Fiji Parliament, then the opposition led Public Accounts Committee, which includes opposition member and economist Biman Prasad, will scrutinise the details. See the Fiji Times.
Transparency International Elects New Chair
If Corruption Were an Industry...
If corruption were an industry, it would be the world’s third largest, worth more than $3 trillion and 5 percent of global GDP. According to the OECD, corruption is a major obstacle to sustainable economic, political and social development as it:
- increases the cost of doing business;
- decreases cross border investment and trade facilitation;
- generates waste and inefficiency in the use of public resources;
- excludes the poor from public services and perpetuates poverty; and
- corrodes public trust, undermines the rule of law and ultimately delegitimises the state.
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