It's been 2856 days since news broke of the AFP’s investigation into Australian company Leighton Holdings for bribing Iraqi’s oil ministerin an attempt to win a $US733 million oil contract. After an exhausting eight years of investigations, no charges have been laid in Australia. This points to a bigger problem - most Australian companies that engage in corruption can expect to get away with it.
Today, Monday December 9, marks the United Nations' International Anti-Corruption Day, but it seems we are swimming in a sea of corruption where the big fish act with impunity. While this may not mean much to you, every year $US1 trillion is paid in bribes while an estimated $3.8 trillion is stolen through corruption. Funds lost to corruption are estimated at 10 times the amount of overseas aid.
Corruption and tax avoidance are not endemic to a specific country or region. However, as The Age’s investigations into Unaoil, Iluka and Leighton Holdings show, they are rampant in the mining, oil and gas industries. They are often enabled by jurisdictions that allow companies to operate in secrecy. In 2014, the OECD identified the mining, oil and gas industries as the world’s most corrupt economic sector.
Australian mining, oil and gas companies have significant operations in Australia and overseas. Our 2017 report found more than 717 ASX-listed extractive companies in 106 countries. Mining, oil and gas deals are vital to "resource-rich" countries in our region including Timor-Leste, Indonesia and Papua New Guinea. In these countries - which also receive large amounts of Australian aid - the extractive industries represent a significant portion of GDP and comprise a large share of exports. Tax revenues from natural resources fund public services such as schools, hospitals and clean water. Corruption is literally taking money and services from the people who need them most.
Australia is a giant player in extractives, but on battling corruption we are a minnow and are being left behind in the race for transparency and accountability. Over the past seven years, Transparency International found that Australia dropped 8 points in the global Corruption Perceptions Index ranking. Along with allegations that Australian companies operating overseas continue to participate in corruption and bribery internationally, we have seen politically exposed persons engage in corrupt behaviour in the awarding of extractive licenses in Australia.
In 2014, the OECD identified the mining, oil and gas industries as the world’s most corrupt economic sector.
Australia doesn't have a public register that lists who controls or ultimately owns mining or infrastructure companies. If we did have a free and open register, we would know who profits, where they pay taxes, and what potential conflicts and inappropriate relationships exist.
Unlike the European Union, United Kingdom, Norway and Canada, we don’t have laws or regulations requiring companies to report on their payments to foreign countries where they operate mining, gas and oil projects. The OECD states that transparent reporting of data is one of the main ways to counteract corruption in the extractive sector.
The Australian government, while a generous supporter of transparency and tackling corruption in the extractive industries in developing countries, has put the handbrake on signing up to the Extractive Industries Transparency Initiative, which is known as the global standard for governance of natural resources.
The lack of transparency and publicly available data casts a shadow over the operations of Australian mining, gas and oil companies. It also makes it harder for governments and citizens in foreign countries to know whether they are getting a fair share of the benefits from natural resources.
It’s time for the Australian government to dig out corruption so that companies like Leighton Holdings, now known as CIMIC, are brought to justice. For a start our politicians can lift the veil on company ownership, sign up to the Extractive Industry Transparency Initiative, and legislate so that Australian mining, gas and oil companies publish their payments to governments in countries where they extract natural resources.