From the Chair

Suzanne Snively, Chair of TINZ,

This special election issue of the Transparency Times covers the responses of ten political parties to questions about their policies and practice regarding the prevention of corruption.

All ten parties demonstrated this year, that they take the prevention of corruption seriously.

However, they do not inspire confidence that the parties recognise the extent of the external threat of corruption and the leverage that a solid reputation brings to the New Zealand economy’s recovery including the potential to repay debt at a faster rate.

Wellington-based candidates have an opportunity to build confidence by demonstrating that they do get this, at the event on 6 October (5:30pm, Rutherford House). This will be co-hosted by the Brian Picot Chair in Ethical Leadership and Transparency International New Zealand (TINZ).

External threat of corruption

Transparency International New Zealand (TINZ) has warned the Government to be vigilant about the prevention of offshore corruption over many years. With the COVID-19 crisis, the warning message is to not let the crisis become a veil for the corrupt.

Sure enough. As if COVID-19 was not already doing enough damage to the economy, the website of the New Zealand Stock Exchange (NZX) was crashed by cyber-attackers. Distributed denial of service (DDOS) hacks disrupted share trading for over 4 days from the end of August and several times in September.

These attacks come as the NZX electronic trading systems were enabling more online trading and when the number of daily NZX trades have been reaching all time highs.

Cyber-attackers also assaulted the Meteorological Office, which relies heavily on the collection of data for its weather reports and forecasts to generate revenue.

Mt Ruapehu Skifield and Westpac (New Zealand’s top listed company by market capitalisation), were also recently affected by DDOS hacks. Other targeted organisations, including Stuff Media and Radio NZ managed to fend them off.

Cybercrime is corruption where hackers distort activities operating for the common good for the purpose of personal gain. Fortunately, the cyberattacks activated the Government’s National Security System and triggered investigations by the Government Communications Security Bureau (GCSB) and the Five Eyes partners.

Other external corruption threats  relate to sporting gambling, illicit financial flows, money laundering and cryptocurrency.

It would be good to have seen recognition of the threat of offshore corruption including cybercrime with suggestions for dealing with it in the responses from political parties.

Now that these attacks have happened, it would be reassuring to see the next Parliament focus early on effective well resourced policy addressing cybercrime and offshore corruption.

Repaying debt through doing the right thing

A common theme in the political party responses to TINZ’s questions is that they regard corruption prevention through the lens of compliance and enforcement.

The seven main elements of compliance and enforcement include

  • tone from the top
  • having a code of ethics
  • communication and training about corruption detection and prevention
  • up-to-date knowledge about relevant legislation
  • whistleblowing and protected disclosure
  • effective Know-Your-Customers practice
  • and regular audits covering bribery, fraud and corruption.

While no political party demonstrated how they would administer the full list of these seven key tools to address corruption, several parties did a good job of describing areas where they complied.

The answers were of a higher standard than in 2017 but the standard is low for a country whose public service and judiciary achieve a joint #1 global ranking as the least corrupt. Further, with the high trust process keeping the economy going during COVID-19 lockdowns, it would be prudent to have strong anti-corruption processes in place.

Paying off COVID-19 debt

To keep some level of economic activity going during virus-containment lockdowns, the Government has increased its spending, building up high levels of debt.

It is natural then, for the public to question candidates about where the revenue is coming from to pay off the huge debt accrued from policies to subsidise wages and benefits.

Integrity is the best antidote for corruption. It is time for political parties to prioritise building stronger integrity systems as part of their own strategies. This will be proof that they really understand the nature of corruption and could make a difference if they were in Government.

Organisations, countries and our political parties benefit from strong integrity systems through a quality reputation, lower costs, increased investment, committed staff, loyal customers, lower cost of capital and easier market access. Our political parties and politicians must recognise and communicate to their constituents the essential role integrity will play in paying off that debt.

When you get into a crisis, your credibility is your best asset.

People want to know the truth. This is where transparency comes in.

If by the time the next election comes around our political parties are prioritising corruption prevention through stronger integrity systems, we can expect an economy growing fast enough to repay debt AND provide the financial support for businesses to be sustainable and grow new jobs.

Suzanne Snively, ONZM

Chair

Transparency International New Zealand Inc.

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