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Smooth ethical edges give way to corruption


ICAC The greatest threat to our security is not SARS or terrorism, but distrust of government. This goes far deeper than our disdain for leadership squabbles.

We never have liked politicians. Australian police have been repeatedly exposed as corruptible. Governments in three states — New South Wales, Queensland and Western Australia — have had to set up anti-corruption bodies to protect the integrity of public decision-making from erosion by officials' private interests. Governments increasingly form partnerships and develop relationships with business and the non-profit sector to achieve their public policy goals. The likelihood of conflicts of interest has never been greater.

At the same time, slippery values and an incapacity to identify, eliminate or manage conflicts of interest are obvious. This may be the outright, 'children overboard' variety, or the rambling incoherence of Rodney Adler when asked to tell the Royal Commission how he distinguished between his own and his company's interests.

When a major management consultancy firm is offering consulting and auditing services to the same client, and can't foresee and prevent an inherent conflict of interest, the public should be concerned. The failures of government and the private sector — whether that be the financial-planning industry, AMP, HIH, Enron or the tobacco industry and its advisers — wound not only the wallet, but our willingness to work together.

Having a conflict of interest is not, in itself, wrong. It is the potential for wrongdoing and corruption that must be avoided. We are not very good at this in Australia, but we need to be. There is much opportunity for discretionary and casual misuse of power in our relative isolation, interlocking loops of power elites, the increasing mobility of employment between the public and private sectors, the rising numbers of joint projects and temporary public offices, and the relatively small number of individuals making and influencing public decisions.

In Australia, the narrow range of relationships is perhaps the most fertile ground for conflicts of interest. In a small town there is nothing like six degrees of separation between business, government and social cliques.

It takes distance to recognise conflicts of interest and their potential risk. Dealing with them demands clarity and transparency. It's a problem not only in the small-town cultures of most of Australia, but also in complex cities and in more densely populated regions such as Europe because economic unions will only cohere if their members trust each other.

That is one of the reasons the OECD set up a project for managing conflict of interest in the public service. Its recently released draft guidelines — discussed in a Sydney workshop with anti-corruption and public sector commissioners from Australia and New Zealand in June and led by one of the authors, Janos Bartek — adopted a generic definition of conflict of interest:

A 'conflict of interest' involves a conflict between the public duty and private interests of a public official, in which the public official has private-capacity interests which could improperly influence the performance of their official duties and responsibilities.

Note the use of the word 'could'. Finding that you have a conflict of interest is not a revelation of wrongdoing. Bartek describes it in terms of chess: when you find that your king is in check, the situation must be resolved, and if it is not, the consequence will be the end of the game.

A conflict of interest is only a potential one if the public officer is never in a position to make a decision that each interest could affect. But if the elements of the definition are met, there is an actual conflict of interest. This is true even if the public official with conflicting public and private interests — in, say, the benefit of awarding a contract to a friend or future political mentor that may be at odds with achieving the best price for the public purse — was not actually influenced by these personal preferences.

If he or she were influenced, the 'conflict of interest' has already become misconduct, abuse of office or at worst, corruption. But if it is identified and acknowledged, and adequate steps are taken to make sure both that misconduct does not result, and that it is made apparent that such steps have been taken, then the conflict of interest has been managed properly. The true aims of public service have been met: the protection of the common good and of public service ethics, and the preservation of public trust in government.

It would be helpful if we had Australian standards for recognising and managing conflicts of interest. New South Wales' ICAC and Queensland's CMC are working to produce a tool for this in Australia. It is timely.

Most of Australia's 'corruption' scandals have developed from cosy arrangements among powerful men to whom ethical edges have become smooth under the gentle buffing on the conference tables and in the boardrooms of power.

That seems to be the way that even men standing on the high moral ground in religious institutions fell into error. They failed to recognise the conflict of interest between their duty to protect the rights and interests of sexually-abused children, their duty to their fellows and colleagues, and their duty to limit the financial and legal liability of religious institutions.

Independent Commision Against Corruption (NSW)

Moira RaynerMoira Rayner is a barrister and writer. She is a former commissioner of Western Australia's Anti-Corruption Commission. She is principal of Moira Rayner and Associates



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Existing comments

The wave of redundancies that swept so much accumulated knowledge from Australia's corporations in the 1990s, and stripped banks of the ability to service rural areas were accompanied by unwarranted pay-rises to those who oversaw these exercises.

At exactly the time that the devastating climate change to come some time this century could have been forestalled, a senior scientist from a major coal mining corporation was appointed to advise the Government about Climate Change.

At exactly the time that the 21st century's first great military slaughter was being planned, two of the planners concluded a Free Trade Agreement.

Bravo, Ms Rayner, for raising this issue.

David Arthur | 17 April 2008  

Well said. While political comentators concentrate on winners and losers we should examine the number of 'donkey' votes or the growing number of those who are not even on the electoral roll. When members of a society lose faith in the ability of the process to represent their interests some of them will feel justified in taking direct action against that society be they Timothy McVeith or a Raskol in Port Moresby.

Liz Munro | 20 April 2008  

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