New Zealand enjoyed a long run on the podium of the Transparency International rankings, and last appeared at first place in 2017.
Since the post-Covid era, from 2022, our underlying metrics have deteriorated and the country has begun sliding the snake downwards.
We are now fourth (tied with Norway and behind Denmark, Finland and Singapore) and it’s only a rising tide of corruption globally that seems to have prevented a further fall.
Transparency New Zealand chair Anne Tolley said the decline had been sustained over several years: “Transparency, integrity and accountability are cornerstones of our democracy. We are seeing these values being chipped away.”
While the metrics have turned negative, it is worth considering to what extent New Zealand’s earlier chart-topping status was due more to ignorance than saintliness.
Transparency International New Zealand chair Anne Tolley said New Zealand’s reputation has been chipped away over the past few years. Photo / Alex Cairns
The Corruption Perception Index measures perceptions of corruption, after all, and if it is not being noticed (let alone investigated or prosecuted), absence of evidence can be mistaken for the reverse.
The OECD regularly assesses New Zealand’s compliance with related agreements.
During several recent trips to Aotearoa to kick our regulatory tyres over compliance with the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, the OECD assessment panel repeatedly noted our lack of prosecutions in this area was not salutary, but concerning.
It is far better to be clear-eyed about these risks than wilfully blind. To that end, the Anti-Corruption Taskforce report is a bracing and welcome tonic that should justifiably alarm both the public and private sector and spur renewed and co-ordinated efforts to combat corruption.
Corruption and bribery prosecutions used to be rare in New Zealand courts, and now they are just uncommon.
Since 2024, the Serious Fraud Office (SFO) has secured convictions against two contractors operating a $4.1 million kickback scheme and against seven individuals for bribery and corruption regarding Auckland Transport roading contracts.
Three other public-sector procurement cases are currently being investigated by the SFO, with the office saying corruption cases now account for 40% of its caseload.
The Anti-Corruption Taskforce report saw its three members – the SFO, the New Zealand Police and the Public Service Commission – quiz and audit six government agencies over their detection and management of internal fraud and corruption risks.
The Inland Revenue Department (IRD), the Accident Compensation Corporation (ACC), the Department of Corrections, the Ministry for Social Development, Toitū Te Whenua Land Information New Zealand and Sport New Zealand were put under the microscope.
The IRD is to be commended for its involvement in this pilot, as well as allowing acknowledgment that the largest share of financial risk in this area seems to be to the tax system.
The report highlighted that six member agencies reported detecting $361.5m of fraud and corruption over the 15-month period. More than 90% of this total concerned tax fraud.
While the pilot group includes some of the larger parts of government, and provided a good survey of recent illicit activity, the overall problem is likely vastly larger.
The Anti-Corruption Taskforce report cited a recent study from the United Kingdom that estimated fraud losses to the New Zealand public sector – based on comparable jurisdictions – could be 0.45-5.6% of total spend.
“This represents potential losses of between $823m and $10.24b,” the report says.
The Anti-Corruption Taskforce report also revealed inconsistencies between agencies about what misconduct should be referred for authorities criminal investigation, and even whether cases of lesser misconduct should or could be shared more broadly.
Many cases were dealt with as employment matters, with privacy concerns often trumping intelligence needs.
The report highlighted a recent SFO case in which a woman who used forged references to gain a public sector job. When this forgery was discovered, she resigned – and went on to successfully apply for another public sector role, again using the same forged references.
The woman, with her husband, went on to fraudulently obtain $2m. The Anti-Corruption Taskforce report said this “highlights the importance of rigorous vetting of public servants, especially as they move between agencies”.
Most alarmingly, the report said during its preparation, likely criminal activity was disclosed that was never properly investigated. The report said one of its participating agencies anecdotally noted one of its staff had been offered a five-figure bribe.
“The bribe was not accepted and was reported internally, however the initial report contained minimal information about the incident, making referral to law enforcement impractical,” the report said.
“The discounting or under-reporting of so called ‘attempts’ also illustrates an inherent misunderstanding of corruption. It is corrupt to offer or agree to give a bribe to an official with the requisite intent.
“There is no requirement for the bribe to ultimately be accepted for an offence to be committed.”
It will take quite the ladder to restore our status as one of the least-corrupt nations on earth, but these recent reports at least now acknowledge the problem and provide some guidance on how to fortify the country’s business and political landscape.
Matt Nippert is an Auckland-based investigations reporter covering white-collar and transnational crimes and the intersection of politics and business. He has won more than a dozen awards for his journalism – including twice being named Reporter of the Year – and joined the Herald in 2014 after having spent the decade prior reporting for business newspapers and national magazines.
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