The guilty verdict awarded against former New South Wales Labour Party power broker Eddie Obeid last June and his subsequent five-year jail sentence has been a welcome victory for the state’s anti-corruption body, the Independent Commission Against Corruption (ICAC).

Following an ICAC investigation, the Supreme Court sentenced Obeid over his failure to disclose his family’s business interests in café leases at Sydney’s Circular Quay whilst lobbying a senior bureaucrat about the rights of waterfront retailers in 2007 when he was a member of the NSW Upper House.

ICAC had another win in September when NSW Supreme Court Justice David Hammerschlag dismissed all claims brought by the Obeid family after they attempted to sue former ICAC Commissioner David Ipp and former counsel assisting Geoffrey Watson SC as well as current ICAC officers Grant Lockley and Paul Grainger over separate corruption findings from the agency’s inquiry into the allocation of coal leases.

That, however, is as far as ICAC’s victories go. Courtesy of budget cuts, the agency’s funding has been scaled back to the same levels as 2006. Legislation passed in November, meanwhile, altered the management and structure of the organisation in a way in which has seen the powers of the Chief Commissioner curtailed and will require agreement from two commissioners out of a new three-member Commission before public hearings can be conducted.

Former Commissioner Megan Latham announced her resignation one week after the passing of the reforms as the changes meant that she would have cease to hold office as a Commissioner and would effectively have had to reapply for her role.

Whilst Premier Mike Baird argued that the reforms were consistent with recommendations of a Parliamentary Committee report tabled in October and would deliver a more accountable organisation, critics are up in arms. According to ABC reports, former ICAC chief David Ipp claimed the organisation had been ‘de-fanged’ and indicated that the moves had seemed designed to get rid of Latham because she had been too independent. Another former ICAC Commissioner Anthony Wheatley described the moves as “the worst attack on the fight against corruption I have ever seen.”

This comes against a backdrop of robust action on the part of the agency against a number of Ministers. In August, for example, the agency’s report following an investigation into political fundraising found that a host of former Liberal MPs acted with the intention of evading laws which ban donations from property developers.

The developments surrounding ICAC, which is widely viewed as Australia’s most effective state based anti-corruption agency, raise questions about whether or not such agencies are in fact being weakened.

These concerns are particularly relevant to the property sector, where opportunities for improper behaviour can be found in areas such as land rezoning, approval decisions and the awarding of contracts for public sector construction work.

As recently as November 22nd, for example, ICAC found that Department of Attorney General and Justice worker Anthony Anjdjic had engaged in serious corrupt conduct by awarding project management and construction contracts for the upgrade of various courthouses to two companies who were paid almost $1.3 million despite having performed little or no work. In Victoria, a survey by the Independent Broad-base Anti-Corruption Commission in June found that 34 per cent of survey respondents had been deterred from bidding for government work because of corruption concerns.

Indeed, such a phenomenon is not limited to Australia. In the most recent edition of its Bribery Payers Index report in 2011, Transparency International reported that business executives surveyed had ranked ‘public works contracts and construction’ and ‘property, real-estate, legal and business services’ as the most likely and third most likely out of nineteen sectors in which bribery and corruption was likely to occur.

Moreover, in some states, elements of the system are constrained. In South Australia, for example, that state’s ICAC is unable to hold hearings in public. Commissioner Bruce Lander says this is inhibiting the ability of his agency to build public trust and confidence.

According to Colleen Lewis, an associate professor in the Criminology Department at Monash University and researcher of anti-corruption models and public accountability, efforts at establishing strong anti-corruption agencies around Australia have been patchy.

Whilst ICAC in New South Wales has delivered good results for 28 years, Lewis fears the recent reforms will weaken the body. In Queensland, the Criminal Justice Commission morphed into the Crime and Misconduct Commission and is now the Crime and Corruption Commission. Lewis says this agency has seen its powers weakened and its arrangements deviate further from the model for an effective anti-corruption watchdog outlined by Tony Fitzgerald QC following an inquiry into alleged police misconduct in Queensland in the late 1980s with every round of reforms which has undertaken in regard to the agency. Recent changes which have stripped the body of its ability to investigate less substantial allegations of wrongdoing are concerning, Lewis said, as such investigations can indeed uncover misconduct or unlawful behaviour on a larger scale.

In other states, Lewis says IBAC in Victoria is faring well after a hard fight to get it to that point whilst South Australia adopted its state-based anti-corruption agency only in response to the agencies in place within other states.

Lewis says the recent changes in New South Wales are concerning. Effectively telling a person of Commissioner Latham’s standing that she needed to reapply for a job when her position is supposed to be independent appears to have been a roundabout way of putting her in a position where she felt that she could continue on, Lewis says. The funding cuts, too, are likely to weaken the ability of the organisation to conduct as many investigations with the same veracity as was previously the case.

“It is not the ICAC that was envisaged 28 years ago when it was put in,” Lewis said. “That’s not to say that everything has to stay the same. It is to say that it doesn’t have the same strength as it once had.”

Some commentators offer different perspectives. By international standards, levels of corruption within Australia are low, says Flinders University strategic professor Adam Graycar, who is working closely with international agencies such as the United Nations and the World Bank on public policy regarding integrity and corruption prevention. He is also a co-author of the book Understanding and Preventing Corruption. Graycar points out that ICAC in NSW was one of the first corruption agencies to be set up in the world and that this was promptly followed by anti-corruption bodies in Queensland and Western Australia.

Whilst corruption bodies in Australia are generally only able to recommend prosecution rather than undertaking prosecutions themselves, and therefore do not in themselves have a great deal of bite, Graycar says an important ability on the part of such agencies in fact revolves around the ability to ‘bark’ a lot.

With respect to property, Graycar says the high-risk nature of the industry as indicated by the Transparency International report is likely to revolve largely around the degree of opportunities for potentially corrupt practices to occur.

In terms of preventing wrongful behaviour, Graycar says it is imperative to adopt transparent and accountable public sector decision making processes so that it is clear how decisions such as land rezoning or the awarding of public sector contracts are made.

Others still talk about challenges in different areas. Professor A.J. Brown, program leader, Public Integrity & Anti-Corruption in the Centre for Governance and Public Policy at Griffith University and a board member of Transparency International Australia, agrees with Lewis about the patchwork of effort with regard to the robustness or otherwise about our anti-corruption agencies. This, he says, is problematic in terms of promoting sentiments of uncertainty and ambivalence with regard to the message about how serious various jurisdictions around Australia are about dealing with corruption. In South Australia, for example, he says the inability of the anti-corruption agency to hold public hearings is a significant issue whilst Queensland and Victoria were a little bit in between.

Brown says New South Wales’ situation of having three commissioners rather than one along with procedural integrity of having two commissioners agree before the Commission is able to exercise its powers with regard to public hearings is not necessarily problematic in and of itself. Nevertheless, he says the budget cuts have placed the agency in a situation of potentially having to ask government for further resources from which to investigate possible corrupt activity which may potentially involve some of that same government’s own members.

Moreover, Brown says the greatest damage has been done by the decision to abolish the existing Commission and for all intents and purposes sack the existing Commissioner rather than roll her appointment through to the new arrangements. He alleges the move to replace her was not necessary and has fuelled perceptions about the government hitting back at ICAC as part of a response to the agency’s investigative activities with regard to government members.

“They basically choose to use legislation to sack the existing Commissioner against the spirit of the existing legislation and against the public interest,” Brown said.

“If we are going to have an anti-corruption agency, it is in everybody’s interests that its independence be unquestionable. It defeats the purpose of having one if the government is to turn around and sack a commissioner it doesn’t like against the spirit of the legislation.”

Going forward, Lewis would like to see to see all anti-corruption agencies be adequately resourced and have the ability to conduct public hearings. To reduce the potential on improper influence, she would like political donations for everyone capped (say, at $1,000) and would like an end to ideas about paying to have lunch with government ministers.

Meanwhile, both Lewis and Brown say an anti-corruption body is needed at the federal level. Whilst feedback from one MP at a recent conference had been that this was not necessary as corruption was not as prevalent at the federal level (where the government is not involved in matters such as planning decisions), Lewis says it is impossible to be certain of this when there is in fact no watchdog responsible for investigating corruption at this level.

Lewis says the importance of effective anti-corruption agencies cannot be overstated.

“An anti-corruption body is one of the pillars of a democratic society,” she says.

“They must not be just treated as symbolic politics or just paying lip service to the idea that we have an effective anti-corruption body.”

  • Andrew another well presented article. Corruption is a cancer on the construction industry and it erodes public confidence. This is not just a construction issue, but its the area that most readers of this article will associate with. Its a subject that most do not feel affects them and certainly not one they would take any flack for. How often is the phrase 'its the standards that you are prepared to walk by that are the standards you will accept'? And then you hear that standards are eroded by the quality of design or workmanship that reflects todays failed training systems. It amazes me that the ' industry standards' are now defined by 'that's as good as you can expect so just be happy'. Compromise seems the simplest path of action, rather than drawing a line in the sand and saying this is not in accordance with the contracted standard, do it again. Alas, those who certify that work is compliant or due for payment often lack the experience or the confidence to stand offenders up and make a stand for their clients who pay them to do a professional job. Most excuse their behavior by retorting that their clients have screwed them down on fees, and that the clients should only expect what they pay for.
    Maybe. Construction contracts enable the certification of work and payment 'on account'. There is no warranty by the certifier that what is being offered up for payment is the 'real deal'. Often non-compliant work is swept under the carpet by suggesting that is what the contract security is for – is making contractors fix their defects. Little is said about how much the value of work left behind is, that needs rectification or how hard it will be to go back and do it later. Buildings end up with unknown amounts of non-compliant work or impairments. The reality is that builders claiming payment for work not performed in accordance with the contract is a breach of contract and fraud. Australia has weak reporting processes for these events. Particularly when a member of the public wants to report this for a public project. In the US there is a strong 'whistle blowing' regime. Its worth having a look. The US looks at 'whistle blowing' on public projects as one of the most effective 'Public Private Partnership' they have. Our Senate is looking at these issues just now. I hope that some more courageous actions follow than ones that just play to the status quo, and defending unsustainable practices.

  • Andrew, appalling, but no surprises here. The plan was to get rid of the ICAC, especially because it used its teeth. It was the one and only half decent body in the land which called any pollies to account. So scaling back was the next best thing to eliminating same altogether. Now all done and dusted! As they say, with the stroke of a pen!! No more trouble from this agency operating in the public interest!

    Anti-corruption agencies cannot be allowed to have oxygen as they might do as they have done in NSW and give air to those willing to expose the corrupted.

    How many in politics and our bureaucracies have not accepted the odd (or many) brown paper bags, or as the favour to be paid forward or back? Answer: nil or almost nil!

    It is so sad that this has to be on the agenda.

    Why does money have to be the root of all evil?

    Consider that we all have one life and one lifetime. And then we will all die – can't take the money with us! But the ego, power and money driven cannot ever get it. They need the money to feel 'important' and 'of worth' and are willing to do whatever to gain it – by fair means or foul.

    It's all very sad. In this equation no 'people' – just profiteering.