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Bribery and corruption – exposure, enforcement and accountability key risks for Australian organisations


14 September 2012:  Managing bribery and corruption risk is set to become an increasingly important issue for Australian organisations, particularly those with offshore operations. This follows the release today of the inaugural Deloitte Bribery and Corruption Australia and New Zealand Survey, highlighting that exposure to bribery and corruption is on the rise and that many organisations either do not recognise the risks, or are not addressing them.

According to Deloitte Forensic Partner Frank O’Toole bribery and corruption has not traditionally been high on the risk agenda for Australian and New Zealand organisations – but this needed to change.

“The landscape is clearly shifting in this area. Particularly with Australian companies looking for growth and new business opportunities offshore, and often in high risk countries, engaging in corrupt behaviour because it is seen as the way business is done in some locations will no longer be tolerated as an excuse,” he said.

“Stakeholders including governments, regulators, law enforcement agencies, shareholders and customers are demanding the strongest commitment to ethical business dealings.

“Ignorance and inactivity are no longer a defence, and failure to act exposes directors, senior executives and employees to increasingly serious sanctions.”

Key findings from the responses of nearly 400 organisations and individuals include:

  • 34% of organisations have operations in high risk offshore jurisdictions, but 48% of these have never conducted a corruption risk assessment, and 21% do not discuss corruption risk at management or board level
  • Only 25% of organisations with offshore operations have a comprehensive understanding of relevant anti-bribery and corruption legislation, while 40% said they are not concerned with risks arising from non-compliance
  • 14% of organisations that have never undertaken a risk assessment have experienced a foreign bribery and corruption incident in the last five years
  • 80% of organisations with offshore operations either do not regard foreign bribery and corruption as a high level risk to their business in the next five years, or said the risk was not applicable to their organisation.

Mr O’Toole said agencies in Australia and New Zealand, as well as the United Kingdom and United States, were firmly focused on addressing corruption at the corporate level.  

“The Australian Federal Police has very clearly increased its enforcement focus on identifying and investigating illegal activities involving Australian organisations,” he said.

“The enactment of the United Kingdom’s Bribery Act in July 2011, and the growing reach of the United States’ Foreign Corrupt Practices Act, will also have implications for Australian and New Zealand organisations operating offshore where, for example, they are doing business with a joint venture  partner or investor with financial or citizenry connections to these countries.  

“Consequently, awareness of the risks, and how to manage them, has become more important than ever before.

“Managing this risk goes beyond just internal controls,” Mr O’Toole said. “An ethical culture mitigates the risk of a legislation breach. Yet our survey results indicate that organisations are encountering bribery and corruption incidents and challenges which many are ill-equipped to identify, manage and, most importantly, prevent.”

Both the Australian Federal Police and Transparency Australia, the local chapter of Transparency International, have supported the Deloitte survey.

Ramzi Jabbour, Assistant Commissioner, National Manager Crime Operations, Australian Federal Police said: “The issue of international bribery by Australian corporates is not necessarily new, but enforcement of Australia’s anti-bribery provisions in the Criminal Code is now one of the AFP’s key priorities.

“Together with the anti-bribery enforcement efforts of other countries, notably the US and the UK, Australian organisations need to focus on managing this risk, pursue a zero tolerance attitude, and deal swiftly with any indications that it may be happening. Anything less presents real exposure for company executives and directors.”

Transparency International Australia Chief Executive Michael Ahrens said: “Australian organisations must operate with caution and diligence in countries where corruption is rife, including in the Asia Pacific region.

“Awareness of the extent of corruption risk that exists, even so close to home, is the first step to solving the problem.”

Questions posed by the survey results include:

  • How much do organisations really know about what is happening in their offshore operations?
  • How many realise the high risk corruption presents?
  • How many are reliant on joint venture partners and third party agents to do the right thing?
  • How can employees and third parties be accountable when an organisation’s position on corruption might be unclear?

NB: See our media releases and research at

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Simon Rushton
Job Title:
National Manager Corporate Affairs and Communications
Tel: +61 2 9322 5562; M: +61 450 530 748
Frank O'Toole
Deloitte Australia
Job Title:
Partner, Forensic
Tel: +61 2 9322 7328




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