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Transparency International’s annual Corruption Perceptions Index has found that its the third year in a row that our ranking has dropped and Australia is now outside the top 10.

December 9 is the annual United Nations International Anti-Corruption Day. Unfortunately Australia doesn’t have much to celebrate this year. Transparency International’s annual Corruption Perceptions Index released last week found that not only was it the third year in a row that our ranking has dropped. For the first time Australia was outside the top 10.

While corruption is a risk wherever there is public power to be exercised, the risk seems to be greater when it comes to environmental and resource use decisions. The reason for this can probably be distilled down to the underlying design of environmental regulation, and particularly the design of schemes to permit mining and mineral extraction. Our laws are set up to literally give away valuable natural resources to whoever wants them and has the financial resources to use or extract them.  

Many years ago, the minerals under the ground were declared to be the property of the state. Ever since then, state governments have gone about giving them away. The key criterion for the right to mine minerals in Australia is money. To be given the right to explore and mine, minerals companies have to be able to show that they will spend money to explore and mine as fast as possible. Surprise! A system that gives one person (usually a minister) the ability to make decisions to allow very wealthy people to become even wealthier with few controls and no supervision leads to corrupt conduct.

The NSW ICAC said of the NSW Mining Act that:

… the question facing the Commission was not simply how the state’s policy and regulatory framework could allow coal ELs [exploration licences] of great value to be corruptly provided to favoured recipients, but how it could have been so easy to do so. It is inconceivable that in any other portfolio area of government such value could be corruptly transferred from the state to favoured individuals with such relative ease…

This is not a policy and regulatory environment that would be considered acceptable in any comparable state operation.

  – NSW ICAC, Reducing the opportunities and incentives for corruption in the state’s management of coal resources, ICAC REPORT (2013) p6

The systems in other states are fairly similar to NSW. There can be little doubt that the same problems that have befallen NSW could equally occur elsewhere in Australia.

Preventing all forms is corruption in government is exceptionally difficult . Nevertheless, there is much that can easily be done to improve environmental and resource use schemes.

Unsurprisingly, most current schemes do very poorly. Most contain key features that facilitate corruption, such as a broad discretion for decision makers and concentrations of decision making power. They also lack important anti corruption measures such as additional disclosure requirements and the public right for independent review of decisions. 

Unfortunately it seems that the situation will have to get much worse before it can get better.Until there is a major incident, not much will happen. Even in NSW, more than a year after the ICAC findings against former ministers, there have been no statutory changes to prevent it from happening again.

Given the absence of political will to change things at both the state and federal levels (federal politicians are still trying to argue that they are somehow different to their state counterparts even when there is evidence of a corruption problem within their ranks), the slide down the rankings is hardly surprising.

Given the frequency and prevalence of questionable conduct and outright corruption that has occurred over the last few years it’s hard to see how it couldn’t be indicative of a wider problem. The ICAC findings of corruption by Ian Macdonald and Eddie Obeid are the most notable, but there have been plenty of others. From the Queensland Government’s decision to pass retrospective legislation to exculpate a significant party donor from the environmental damage they had caused, to gifts to bureaucrats who had to make a decision about a tender worth billions of dollars, any quick search of recent news stories will give you an idea of what seems to be an alarming trend.