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Australian Insights: Global Economic Crime Survey 2024

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PwC Australia > Risk and regulation > Global Economic Crime Survey 2024 > Managing bribery and corruption: Five actions you can take to mitigate risk for your organisation

 

Australian Insights: Global Economic Crime Survey 2024

Managing bribery and corruption: Five actions to mitigate risk for your organisation

  • Insight
  • September 26, 2024

By Jane He, Partner, PwC Australia and Penny Dunn, Partner, PwC Australia

On 8 September 2024, a new foreign bribery offence came into effect under the Crimes Legislation Amendment (Combating Foreign Bribery) Act 2024. This provides a timely reminder for business leaders to review and enhance key measures to mitigate for bribery and corruption risks. 

Under the legislation, a ‘failure to prevent’ offence has been established. Corporations can face criminal liability, and significant penalties, for failing to prevent foreign bribery by their associates. Associates are broadly defined to include officers, employees, agents, contractors, and anyone performing services on behalf of the corporation. A corporation can avoid liability for the ‘failure to prevent’ offence if it can demonstrate adequate procedures in place to prevent foreign bribery by its associates.

The complexity and challenge of managing bribery and corruption risks continues to be highlighted in PwC’s Global Economic Crime and Fraud Survey (GECS) 2024. The survey found that 73% of Australian respondents perceive the risk of corrupt or improper payments as either increased or unchanged over the past 12 months. This ongoing challenge continues to create a difficult operating environment for businesses.

The GECS survey reveals further challenges related to third parties, which represent a significant bribery risk. While the GECS data shows that 77% of Australian respondents feel confident in their ability to manage corruption risks, 30% either do not have a third-party risk management program or do not evaluate their third parties as part of their anti-bribery and corruption efforts. While implementing basic frameworks, such as a whistleblower policy or an anti-bribery and corruption code of conduct, is a crucial first step, organisations should also consider third party risk measures that strengthen anti-bribery and anti-corruption (ABAC) management. 

What you can do: Five actions to mitigate risk

Here are five key actions to support an effective anti-bribery and corruption compliance program:

  1. Tone from the Top: Even the most well-designed compliance program can only be effective if it is supported by senior management. Organisations that excel in compliance are those where the Board and executive team actively demonstrate and communicate their commitment to these programs.
  2. Adopt a risk-based approach: Underpin your corruption compliance program with fit-for-purpose bribery and corruption risk assessment that considers both quantitative and qualitative measures. This enables organisations to design and implement ABAC processes and controls that commensurate the level of bribery and corruption risk exposure instead of applying a one-size-fits-all approach. Where organisations rely heavily on their third parties for delivering goods and services, these should be an area of focus as part of their ABAC compliance program.
  3. Design with intent: The organisation’s policy, processes and procedures must align to the organisation’s bribery and corruption risk exposure and appetite. All business users should be clear why policies and procedures exist and the implications of non-compliance.
  4. Be data and evidence based: Organisations must proactively monitor the effectiveness of the compliance program and controls by collecting and reporting on the data/evidence (e.g. third-party due diligence, gift register), and running periodic analysis across internal data (e.g. accounts payable, employee expense reimbursement) to identify anomalies/unusual activity. It is pleasing to see that 75% of GECS respondents reported using data analytics to support their organisation’s anti-corruption compliance objectives It is also important to ensure there is adequate capacity in place to avoid falling behind on reviewing analytics output and timely follow up action.
  5. Create a ‘speak up’ culture and channels: Bribery and corruption incidents can be secretive in nature and therefore hard to detect, which is why a high portion of bribery and corruption suspicions are first identified through employees/third parties making a disclosure to the organisation. This highlights the importance of an effective whistleblower program. But for it to be effective, it must be visible, accessible and people must understand it. Also, it must be supported by deliberate, ongoing education around how to use the channels, the positive impact of raising a concern, and building trust in whistleblower protection.

Addressing bribery and corruption risk requires involvement from all levels of an organisation. By taking these actions, organisations can effectively manage bribery and corruption risks as part of ethical, sustainable business operations. 


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