With corruption costing the world economy an estimated 2.6 trillion dollars per year, you can bet that organisations are sitting up and taking note. Plenty of them are losing big money, and a lot of individuals are getting rich by underhanded means.
The Victorian Government took action to stem the scourge of corruption in 2011, setting up the Independent Broad-based Anti-Corruption Commission (IBAC) to investigate the Victorian integrity system with the aim of improving accountability and transparency.
But the body has been criticised as being a toothless tiger, and with the release of its first report to the Victorian Government, the question now is whether IBAC will become a watchdog with bite.
What is corruption?
Corruption is a broad term which, in a workplace context, may range from serious frauds and abuses of power to lower level activities that violate the trust that an employer places in employees.
The report defines corruption as the exploitation of public or private office for personal gain. It can take many different forms, including bribery, extortion, embezzlement, fraud and conflict of interest.
Corruption can be so widespread and occur in so many forms that the report estimates that it adds a staggering 10% to the running costs of organisations worldwide.
IBAC has the power to investigate serious corruption in the public sector or police misconduct. But it does not have the power to investigate:
- Matters in other states or territories.
- Federal politicians or Commonwealth Government departments or agencies.
- Matters in the private sector.
- Minor issues concerning police officers.
- Court judgments or traffic decisions.
Some commentators have criticised IBAC’s powers, saying that the definition of corruption is too narrow, and that corrupt conduct has to be “serious” and also criminal in nature before IBAC can investigate.
IBAC’s powers are also much more limited than its NSW equivalent body, the ICAC.
The report’s recommendations
In all, the report made 13 recommendations to the Victorian Government, including that the definition of corruption be broadened to include additional criminal offences.
It recommended an ongoing review of the definition of corruption to include non-criminal conduct in the future.
The government’s response
A new Bill is currently before the Victorian Government. If passed, the new legislation will:
- Expand the scope of IBAC’s powers so that suspicion of “serious” corrupt conduct is not required. Suspicion on reasonable grounds that the conduct is corrupt will be enough for IBAC to become involved.
- The scope of people who can be investigated by IBAC will include non-public officials.
But commentators continue to express doubt over how effective the proposed changes will be, even if they are enacted.
Corruption is a pervasive issue that is increasingly costly to organisations worldwide. It has perhaps gone unchecked for far too long. The Victorian Government took a positive step to remedy this by establishing IBAC, but even with the anticipated expansion of its powers if the legislation is passed, there are doubts about whether it has enough bite to address this huge issue. It is fair to say, however, that IBAC is here to stay, and the Victorian Government may have a few more attempts at amending its watchdog’s powers.
WISE Workplace can assist organisations to respond to fraud and corruption threats by enrolling in the Cert IV Government Fraud Control. This specialised program offers participants the opportunity to cover all core competencies in an intensive 3 day short course followed by self paced online study. Book your place for our next course in Melbourne on 18-20 May 2016.