Serious Fraud Office investigating multiple corruption claims

New laws have put four Kiwi firms under the spotlight, writes Richard Meadows.

Serious Fraud Office director, Julie Read says new laws make international collaboration to fight corruption easier.
MICHAEL BRADLEY

Serious Fraud Office director, Julie Read says new laws make international collaboration to fight corruption easier.

Four Kiwi companies are being investigated by New Zealand's Serious Fraud Office (SFO) in an anti-corruption purge.

The move comes in the wake of the introduction of strict new anti-corruption laws, which will slap tougher penalties on New Zealand businesses if they are caught paying bribes overseas.

The SFO received a funding boost this year to tackle corruption cases.

Its director, Julie Read, said four investigations were already underway, but would not reveal any details about which firms have been put under the spotlight.

But she said the investigations were important in protecting New Zealand's reputation as one of the least corrupt countries in the world.

"We have good relationships with many overseas counterparts that we can call upon to assist us overseas, just as we can assist them in investigations in New Zealand," Read said.

An omnibus bill which passed into law earlier this month, brings New Zealand closer in line with the United Nations and OECD standards.

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Among the raft of changes in the legislation are harsher sanctions for acts of bribery in business conducted overseas.

Individuals can now receive fines on top of up to seven years in prison. Corporations can be hit with an unlimited fine.

The SFO - often seen as a white-collar crime watchdog - will also benefit from provisions giving it more power to share information with foreign authorities.

Read said that the increase in budget made her confident the SFO had the resources and training to enforce the strengthened laws.

READ MORE:

* Our tax system opens door to corruption overseas
* Why is bribery still legal in New Zealand?
* Bribery and corruption report should be 'wake-up call'

Justice Minister Amy Adams said the OECD Working Group on Bribery had found financial sanctions were the best deterrent for foreign bribery.

The new law introduced a formula which closely linked financial penalties with the scale of the offending, she said.

That would make it less likely that businesses would make a commercial decision to treat any fines as a "cost of doing business".

Daniel King, a director of the New Zealand chapter of Transparency International, said the fines could be even more of a deterrent than prison time.

He said. "Financial penalties, or at least settlements with companies, get used quite a bit."

"We need to take this seriously. One of the ways companies will be taking it seriously is [realising] this could happen to them."

While applauding the penalties, King was less happy with failure to close a loophole allowing facilitation payments.

Companies supposedly used the payments to speed through an application process, for example, but King said they were effectively "small bribes to government officials".

He said it was typically best for companies to steer clear of them altogether.

"It gets really murky. People don't know what's OK and what's not OK."

Adams said the law narrowed the exemption, making it "much more controlled and much tighter".

It could only be used where no undue benefits went to the person involved, and businesses would need to keep detailed records.

"If we didn't retain this exception, I'd be concerned that some innocent New Zealanders may be unintentionally criminalised," Adams said.

"That is a serious threat, and we have worked through this in some detail."

A recent Deloitte report found New Zealand businesses with overseas operations were experiencing an increase in corruption.

One in three had an incident overseas in the last five years, up from one in five in 2012 when a similar survey was conducted.



 - Stuff

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