Bribery and corruption was in the news recently when Mark Lester and Sean Bryan were sentenced to three years’ imprisonment; guilty of illegally ‘steering’ more than AU$20 million in inflated contracts to Bryan’s company, through Spark. The judge stated this was the “largest ever private sector corruption case involving a publicly listed company providing crucial services to New Zealanders”. Some would say this was a one-off. Surely New Zealand, including Waipa District Council (WDC), is held in high esteem for its reputation of fairness, equity, transparency, integrity and low levels of corruption and fraud, right? Wrong.
For decades, NZ legacy media has repeated propaganda that embeds the ideology of NZ not only as ‘clean, green’ environmentally, but also that this country is ‘clean’ in terms of its financial transactions. As Better Waipa points out, the realities are far from this claim. Anecdotally, conflicts of interest are all-pervasive. The one-degree of separation at WDC has become a joke rather than deserving of serious scrutiny and action. Declaring a conflict of interest is NOT the same as acting specifically to avoid that individual or company accruing beneficial advantage as a result.
The realities of corruption in NZ are under an international spotlight, too. Evidence from the Organisation for Economic Co-operation and Development (OECD) special working group for the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, confirms NZ has never commenced a single prosecution for foreign bribery. The NZ Serious Fraud Office (SFO) has never received any reports of foreign bribery from councils, auditors or accountants and there is no national strategy to combat foreign bribery.
If there have been zero reports, does that mean fraud, bribery or corruption doesn’t exist here? Or is something else going on?
What is the Convention on Combating Bribery all about and why is it important?
In its own words:
“The OECD Convention focuses on the ‘supply side’ of bribery, and seeks to combat individuals and companies offering, promising or giving a bribe to foreign public officials in the course of business transactions abroad.”
Such transactions may include the award or renewal of commercial contracts, obtaining special licences, permits or visas or the bypassing of consents or fines. But of course, there are also other, (partly) ‘invisible’ bribes, like beach bach stays, fishing trips, vineyard tours or other rewards.
Risks from fraud or corruption are rooted in the Revolving Doors between Public, Private, Philanthropic Partnerships (PPPPs). Transparency is absent because requests via the Official Information Act (OIA) are often refused or redacted when PPPPs are involved, based on ‘commercial sensitivity’. Overall, fraud and corruption raises the cost of doing business, distorts free markets, gives others unfair advantage and undermines economic growth. Fraud and corruption also harms citizens through inferior products and services (like roadworks), whilst amplifying a specific narrative; censoring dissent.
Why is Waipa at Risk of Corruption and Fraud?
In 2022, New Zealand was the 33rd largest of the 46 member countries based on GDP and ranked 17th among OECD Convention membership based on GDP per capita. Small and medium-sized businesses (SMEs) account for a massive 98.8% of all New Zealand businesses and generates over a quarter of New Zealand’s GDP. And 16% of New Zealand SMEs are involved in goods export. Waipa, being within the ‘Golden Triangle’ of NZ’s commercial heart, is where many SMEs are based, so WDC has a crucial role to play in the prevention, detection, and management of fraud and corruption, not only locally, but internationally too. Eg NZ is the largest exporter of timber in the world, with most of that product sold to China.
If we want to make progress on reducing fraud and corruption, sources of information would mainly be our accountants, auditors, councils, the media, police, Serious Fraud Office (SFO), overseas military and the Income Tax office (IRD). What does the OECD Report say about these entities’ role currently in information-gathering?
New Zealand has never commenced a prosecution of foreign bribery and detection levels remain low. Only 2 of the total 17 foreign bribery allegations have proceeded to an investigation.
New Zealand does not have a national strategy to combat foreign bribery and there’s clearly a lack of awareness because no training exists.
There is a lack of clarity in Government policies: staff don’t know how or where to report acts of corruption or bribery. Adding to detection challenges, New Zealand has very limited mechanisms to incentivise self-reporting by companies.
No foreign bribery allegations have been detected by the SFO or similar public sector agencies, or through media reports.
Confirming this finding, a keyword search on WDCs website, meeting minutes and policies, including code of conduct rules, found zero results for the words like ‘bribery’ or ‘corruption’. References to ‘fraud’ were only within the context of staff credit card expense claims or auditing of Annual Reports. Conducting the same keyword search within the Local Government legislation, produced similar results. Clearly, evidence collected by Better Waipa suggests that there is an urgent need for a new Fraud and Corruption Policy at WDC, alongside a whistleblower
