Business Ethics & Corruption in Australia (BUS201)

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Business Ethics and Sustainability
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Different forms of corruption and strategies used by the government to minimize
corruption
Business ethics is the practice of following the policies and methods which are related to
controversial issues like discrimination, corporate governance, corporate social responsibility,
insider trading, fiduciary responsibilities, bribery, etc. The government of Australia has formed
various policies, rules, and regulations in the country for the betterment of the country and to
reduce corruption in the country. Business ethics is doing everything right (Ferrell, et. al., 2015).
Sustainability is the process of fulfilling the challenges by grabbing the opportunities so that
future generation does not face such challenges and enjoy the lifestyle which others enjoy. The
sustainability involves naturally by taking a long term perspective on various factors like
environmental, economic, and social factors. These factors play a major role in impacting the
country as a whole (Schaltegge, et. al., 2018).
Corruption is taking advantage of certain powers as given to perform various functions in the
country and contributing in the country for its development. Various people misuse these powers
for their own development. Australia is considered one of the corrupted countries in the world as
the successive federal governments fail to form an effective and efficient body which prevents
corruption in the country (Newell, 2018). The body which is used to prevent corruption is
commonly called an anti-corruption body. The federal government failed to form such body as
similar to NSW Independent Commission against the corruption. The reason why Australia has
never been corruption free is that of lack in the federal agency of anti-corruption. Though
Australia is one of the least corrupted countries as it scored 79/100 in the latest Transparency
International’s Corruption Perception Index (TICPI) give ranking it as 13 of 168 countries
(Malley, 2018).
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Image: Forms of Corruption
Source: By Author, 2019
Bribery is either monetary or benefits in any kind which an officer asks from the person by
breaching of his duty. There are various different purposes of bribery, it can be either asked for
speeding up any documentation process, for getting any kind of information, or for any special
service, etc. (Köbis, et. al., 2017).
Vote Buying is a form of corruption which arises mainly at the time of elections. The candidates
asking for the votes make several promises to the general public to return the public’s favor
either by benefitting them in person or by providing them certain facilities as a whole. Vote
buying is not giving the free items at the time of campaigns as conducted by the elected parties
and thus the voters are not obliged directly to vote them.
In Illegal financing of political parties, the political leaders ask individuals and companies for
financial support and in return, if they get elected they will provide them certain political
benefits. Political funding includes public funding, donations, and another type of financial
support as received by the political parties in Australia in order to pay for the campaigns and
other expenses incurred during the elections.
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Forms of
Corruption
Bribery
Vote Buying
Illegal
financing of
political
parties Misuse of
official
position
Trading in
Know-how
and Insider
Information

In Misuse of Official Position, performing an act or making decisions which directly or
indirectly benefits to the decision-maker, third person, or the person closer to the decision maker.
Misusing of official position can be either using of resources of the public or abusing trust, etc.
As per the Anti- Corruption Act's explanatory memorandum, misusing of the official position by
any officer means either the officer is denying performing its duty, making excessive use of its
power, or using it by breaching the rules of discretion.
Insider Information and Trading in Know-how explains trading of insider or confidential
information is the biggest corruptive offense. Generally, people for a small amount of money,
trade the official confidential information to the people in different countries which can affect the
home country. Insider trading must be prohibited and if committed, the person shall be penalized
either in monetary terms or by imprisonment. Trading information and data means transferring
the personal data of the country to the other countries. For example, secret agents spy on the
countries in order to take the decisions accordingly. Trading of information is majorly risky
during the times of wars.
Trading in know-how means selling of the information by an official which he/ she has
gathered professionally. This type of situation occurs when the person can provide the
information gathered because of the position he/ she possess for free, but still charges an extra
sum for the same. There are certain exceptional cases like providing academic lectures, taking
training sessions, etc. which are not considered as trading in know-how.
Different strategies can be used by government such as corruption which is the most common
unethical behavior in the country these days. It damages the institutional and social fabric of
Australia. Strategies implemented by the government to reduce corruption are:
Payment to the civil servants according to their capability is the strategy used by the
government. Civil servants are paid well or are underpaid affects the level of motivation and
incentives. If the wages to the officers are low, they might find various unofficial ways to
generate their extra income. In the case of underdeveloped or less developed countries, the public
sector wages has an inverse relationship with the incidence of corruption.
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Replacing distorting and regressive subsidies with targeted cash transfers is another strategy.
Subsidies are an example which explains how government policy can create more opportunities
for corruption and distort incentives. Energy products provide consumer subsidies which amount
to approximately $1.9 trillion per year, which is equal to 8% of revenues of government and
2.5% of global GDP. Subsidies are the example of shortages of products, emergence or
formation of black markets, smuggling, etc. Keeping aside the opportunity cost and the
implications of the environment which are connected with the low prices, subsidies generally
considered as putting the government of Australia at the mid of the corruption generating
schemes. In order to minimize corruption, it would be better to replace the regressive and
expensive schemes with the targeted transfer of cash.
Creating openness and transparency in the spending of the government means tax exemptions,
extra funding under the control of political leaders, subsidies, soft credits, public purchase of
products and services, are the components of the several ways where the government manages
the resources of the public. In order to satisfy and fulfill the needs of multiplicity, government
taps the capital market in order to raise the funds, collects taxes, receive foreign help, and
develop the various mechanisms to gather the resources. Some countries maintain transparency
and take efforts so that the collected resources are being used in the interest of the general public.
The country which has an active civil society, with a participative culture could result as an
important strategy to reduce corruption.
Establishing International Conventions means as in the globalized economy, there is an
increased corruption in the cross-border dimension, to control the corruption the international
legal framework is an important element among the various options open to the government. The
international framework has been improved over the years. In association to the OECD's
Convention of Anti- Bribery, 2005 the United Nation's Convention against the corruption
(UNCAC) came into force, and the end of 2013 it had been ratified by a majority of 140
signatories. The UNCAC creates a framework globally which includes developing and
developed countries and covers a wide subject range, like extortion, provisions for anti-money
laundering, foreign and domestic corruption, preventive measures, interest law conflict, ways by
which illicit money can be recovered which are deposited in the offshore banks by the officials,
among others. As the United Nations has no power, the convention’s effectiveness in order to
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deter corruption will depend on the development of the national monitoring mechanism in order
to assess government compliance.
Deploying smart technology is another strategy which means many corruptive opportunities are
being increased by the distortions of government- induced, frequent and direct contact of the
citizens with the government officials can open the numerous ways for illicit transactions. In
order to reduce this problem, use the available technologies in order to encourage the arms-
length relationship of civil society with officials; in relation to this problem, the internet has been
considered as an important tool to eliminate corruption. In some of the countries, online
platforms are being used to facilitate the interactions of the government with the civil society,
and the community of business is considered to be successful in the field like public
procurement, tax collection and red tape.
Australia though is the least corrupted and one of the developed countries in the world. The
Government of Australia has found numerous ways of corruption in the country and has
introduced strategies to eliminate corruption. The government of Australia has formed ways
using which the individuals, companies, politicians, etc. work in an ethical manner to avoid
corruption or else penalties and punishment of imprisonment can be imposed on the corruptive
entity (Jamali & Karam, 2018).
Corruption is considered as the most unethical behavior in any country and various measures
shall be taken by the government to prevent corruption. Corruption can increase the civil and/or
criminal offense in the country and can be dangerous for the general public.
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References:
 Ferrell, O. C., & Fraedrich, J. (2015). Business ethics: Ethical decision making & cases.
Nelson Education.
 Jamali, D., & Karam, C. (2018). Corporate social responsibility in developing countries
as an emerging field of study. International Journal of Management Reviews, 20(1), 32-
61.
 Köbis, N. C., van Prooijen, J. W., Righetti, F., & Van Lange, P. A. (2017). The road to
bribery and corruption: Slippery slope or steep cliff?. Psychological science, 28(3), 297-
306.
 Malley, N., (2018). Australia becoming more corrupt, warns former judge. [Online]. The
Sydney Morning Herald. Available at: https://www.smh.com.au/national/australia-
becoming-more-corrupt-warns-former-judge-20181113-p50fsp.html. [Assessed on:
15/1/2019].
 Newell, J. L. (2018). Corruption in contemporary politics.
 Schaltegger, S., & Burritt, R. (2018). Business cases and corporate engagement with
sustainability: Differentiating ethical motivations. Journal of Business Ethics, 147(2),
241-259.
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