In a great piece by the Australian Financial Review‘s Luke Forrestal this morning, the head of the Australia-Africa Mining Industry Group, one Bill Turner, demanded that Australia not follow the lead of Canada and the UK to criminalise the making of small “facilitation payments” to obtain government services. Removing the exemption for small payments under current anti-bribery laws has been under consideration in Australia for several years.

Turner thought such a ban impractical, saying “what drives this behaviour is essentially ­poverty and lack of resources in governments”. Turner’s comments could be taken to imply it’s immoral not to pay such bribes; low economic wellbeing needs investment to improve, and to do that you need to pay small bribes. So, the need for bribery will only disappear if companies keep bribing officials.

Well, here’s an alternative perspective for Turner and the “Australia-Africa Mining Industry Group”.

Let’s start with Ernest Manirumva, a Burundian human rights activist and anti-corruption campaigner who was vice president of the Observatory for the Struggle against Corruption and Economic Embezzlement. He was “assassinated”, in the words of Burundian police, in 2009, most likely because of his work to uncover corruption within the ruling party in Burundi.

Or we could start with Major General Tirhani Maswanganyi, the South African police officer murdered earlier this year due to his work in investigating corruption within South Africa’s police forces.

Corruption kills, Bill.

Some anti-corruption campaigners in Africa are luckier. They are only arrested or jailed. Or abducted and assaulted. Or have their offices burnt down. Even those working to increase the transparency of mining industry in Africa have been intimidated, Bill.

Corruption kills in other ways. In Chad, a government study found 1% — 1% — of funding allocated to health clinics actually made it onto the ground in terms of services. The rest had been siphoned off. In a number of African countries, according to Transparency International, access to free education had become contingent on parents paying small bribes so their children could go to school, bribes some can’t afford, or won’t pay, particularly for girls. There’s a demonstrated link between such corruption and lower levels of literacy, Bill. It’s also been linked to higher maternal mortality and poorer drinking water.

All of this necessarily feeds directly into lower rates of economic growth, the very antithesis of what Bill maintains will happen in his virtuous circle of bribery.

Corruption can also destroy governments, dramatically adding to the “sovereign risk” that mining companies like to complain about. One of the key motivations of protesters in the Arab Spring has been the flagrant corruption of regimes like Tunisia’s Zine El Abidine Ben Ali.

Every payment, large or small, reinforces the culture of corruption that kills Africans, undermines economic development and rots governments from within. But even Transparency International acknowledges bribes can’t be wiped out overnight, saying:

“Facilitation payments are a form of bribery and should be eliminated. The Business Principles acknowledge, however, that this is a sizeable challenge for most companies and that zero tolerance of facilitation payments can only be achieved over time.”

But the international direction is against them. As Deloitte told local companies in 2011:

“The takeaway for Australian companies active in at-risk jurisdictions such as Africa is that anti-corruption efforts are gaining momentum here and abroad. Management should be convinced that the company under its watch has the right policies, practice, culture and means for intervention in place to mitigate the risk of bribery and corruption undermining its viability.”

In other words, Bill, don’t be a goose and think you deserve special treatment.

And don’t think Australian companies don’t have a problem with bribery. Remember AWB in Iraq? And the Reserve Bank’s Securency and Note Printing Australia? OZ Minerals has been mentioned in connection with claimed illegal payments in Cambodia. Leighton Holdings dobbed itself in over questionable payments in Indonesia. And then there’s the now-notorious “tea money” case in Cambodia involving BHP Billiton.

Not to mention another, albeit now ex, Australian, company — Rupert Murdoch’s empire and the numerous prosecutions for corrupt payments by journalists at his British newspapers. The payments and the phone hacking allegedly carried out by Murdoch’s journalists have seen the Murdoch empire (now two companies, 21st Century Fox and News Corporation) investigated for making corrupt payments under the stringent US Foreign Corrupt Practices Act.

If Rupert’s hacks can be charged with slinging a little cash at London police for tidbits, it’s all the more important that our African mining pioneers not be permitted to maintain an exemption from similar activities in countries where the culture of corruption is vastly more damaging.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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