Integrity Talking Points 4 - 8 October 2010
8 October 2010
It seems that the media doesn’t like good news. It is two weeks since the Worldwide Governance Indicators were released by the World Bank, and in the pattern of the last few years, no New Zealand media have reported the very favourable light in which we are placed. The researchers comment that New Zealand and the Nordic countries show that very high standards of governance are attainable and consistently so, across all dimensions of governance. It is not countries that are seen as the economic leaders that exhibit good quality governance. The indicators, based on 35 survey sources, measure;
Voice and Accountability
Political Stability
Government Effectiveness
Regulatory Quality
Rule of Law
Control of Corruption
The New Zealand score is largely unchanged since the 2009 results except for a measurable deterioration in the Political Stability indicator about the likelihood that the government will be destabilized by unconstitutional or violent means, including terrorism. New Zealand remains among the top ten countries on all six indicators.
http://info.worldbank.org/governance/wgi/index.asp
http://www.brookings.edu/opinions/2010/0924_wgi_kaufmann.aspx
7 October 2010
The Revenue Watch Index 2010 was published this week in conjunction with Transparency International. The Index assesses resource-rich countries that contain almost half of world’s population and are among the top producers of oil, gold, copper and diamonds. The purpose is to disclose the extent to which information about revenues is available.
In most countries surveyed, natural resources are public assets, and the revenues should be openly managed by the government. But the majority have little information available publicly about the money they receive. Brazil and Norway head the list as the most transparent (and well ahead of US ). Equatorial Guinea and Turkmenistan are the least open. Australia, UK and New Zealand are not included among the 41 countries on the index.
http://www.revenuewatch.org/rwindex2010/rwindex.html
6 October 2010
The media focus on allegations of corruption at Securency – a banknote printer, owned equally by the Australian Government and a British paper manufacturer – highlights the challenges of trading in many parts of the world. The OECD Convention Against the Bribery of Foreign Officials and UN Convention Against Corruption aim to eliminate unlawful conduct that underpins contracting in many markets. Australia and the UK are parties to both conventions. Securency employees are reported to have bribed central bank officials in numerous countries in pursuit of contracts. Earlier this year media stories about the company were spiced with allegations about prostitutes and high living at taxpayer expense.
Of particular concern is an allegation that the agency did not act on complaints made by staff. In New Zealand the Protected Disclosures Act provides processes for referring complaints outside an agency – to an appropriate authority – if within 20 days there is no recommended action on a disclosure. The State Services Commissioner is one of the 10 appropriate authorities listed in the Act.
http://www.abc.net.au/news/stories/2010/10/07/3032315.htm?section=business10
http://www.legislation.govt.nz/act/public/2000/0007/latest/DLM53906.html
5 October 2010
An article in the Spring edition of Public Integrity traces the development of Canada’s whistle blower legislation – the Road to Disclosure Legislation in Canada. This explores the complexities of disclosure protection with references to provisions in UK, Australia and New Zealand. Whistle blowing seems to contradict many of the values and characteristics of public service. Complaining about colleagues can be seen as morally ambiguous and not the heroic act portrayed in the popular media. Unlike the New Zealand procedure where protection flows from making an internal complaint, the Canadian process involves disclosure to an independent body. Both systems have their disadvantages. The suggestion is that agencies should prevent wrongful acts from occurring in the first place, as “lingering perceptions of whistle blowing boil down to shooting the messenger rather than heeding the content of the message.”
Shooting the messenger may be almost literally true in the case of a Swiss bank employee who provided details to German tax authorities of 2000 of account holders who evaded tax on large sums hidden behind Swiss bank secrecy. A single but widely reported source claims the whistle blower – paid for the data - has been found dead in a cell after a secretive arrest by Swiss police. Ironically, a number of wealthy Germans have confessed to tax evasion, only to learn they were not on the whistleblower’s list!
4 October 2010
A concern in many jurisdictions is the impropriety that can arise when agency employees resign to work for organisations they previously regulated, funded or had procurement arrangements with. The OECD has identified this situation as a source of conflicts that are inadequately managed in too many cases. It recently published Post-Public Employment Good Practices for Preventing Conflict of Interest exploring concerns and examples disclosed in a survey of member states.
The New Zealand contribution was minimal as few conflicts situations seem to arise. Our concern is of officials resigning and being contracted back to agencies. A similar situation is happening on a large scale in the United States where dozens of senior executives and hundreds of other former employees are reportedly contracted back into the US Postal Service. An audit remark is that "It appears unethical to hire back former executives at nearly twice their former pay to advise new executives who were placed in their position based on their expertise ...and experience".
In the private sector the issue of post employment conflicts is playing out in the case of the former HP chief executive. He resigned (with a $34 million package) following improper arrangements made to remunerate a colleague, and shortly after was engaged by Oracle – now a competitor of HP. Some commentators are surprised.
PC World; This sends the wrong message: “No one who works at a less exalted level would get away with that behavior”…” Hurd exemplifies a culture that glorifies the richest and most powerful, and places them in a rarefied zone light-years removed from the rest of us.”
Atlantic; “Perhaps the lesson here is that business ethics only matter when they jeopardize business. Of course, sometimes these go hand-in-hand. A perfect example is Arthur Andersen. With an auditing firm, integrity is everything. If you lose that, you have no business, as the firm quickly found out. But in other businesses, where the profit motive is less connected to good ethics, that’s not the case. Then, so long as poor decisions don’t compromise profit, they will eventually be forgotten.”
http://www.researchandmarkets.com/research/b120ce/postpublic_employ
http://www.reuters.com/article/idUSTRE6860RW20100909
http://www.washingtonpost.com/wp-dyn/content/article/2010/09/26/AR2010092603359.html?wpisrc=nl_fed
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