Unlike the US and the UK, Australia does have a public regulator that is empowered to prosecute individuals for breaches of directors? duties.
With the Reserve Bank of Australia, its two subsidiaries Note Printing Australia and Securency and a growing number of senior executives again under the spotlight for alleged involvement in corruption, a big question we need to be asking is: what should the Australian government be doing to protect its global reputation?
On Monday a Four Corners/Fairfax investigation raised serious allegations against Securency and NPA directors and Reserve Bank officials in relation to their knowledge of bribes to win note-printing contracts overseas. The program raised evidence that key ''insiders'' within the companies knew or should have known that payments were being made to agents in Malaysia, Indonesia and Nepal that were being used to bribe officials responsible for allocating currency contracts.
These claims not only raise important questions about how the government is going to respond to the allegations, but also what it can do to preserve its international reputation when the integrity of the most important financial body in Australia is again under question. The government has a lot to lose by just sitting and watching.
In 2007, Australia moved down two places on Transparency International's Corruption Perception Index as a result of the Australian Wheat Board oil-for-food scandal.
While the Cole royal commission found that the responsibility for paying kickbacks to the Iraqi regime lay with AWB executives and not the government, the drop in Australia's ranking showed that the government, businesses and the country's reputation took a direct hit as a result of the scandal.
So what could the government be doing right now, short of taking up Adam Bandt's suggestion of a royal commission? Well, the answer is: a lot. First, it should more quickly finalise its National Anti-Corruption Plan. A draft plan was released by the Attorney-General's Department in late 2011, with the final report due late last year. Although the election may have slowed the report's release, anti-corruption reforms are bipartisan issues and a national government response to corruption is now overdue.
Second, the government must ensure that the Australian Securities and Investments Commission has sufficient resources to investigate and take action against corporate directors that engage in corruption. Unlike the US and the UK, Australia does have a public regulator that is empowered to prosecute individuals for breaches of directors' duties.
Yet ASIC has declined to investigate Securency and NPA directors for breaches of directors' duties, despite a significant amount of evidence being sent to it by the Australian Federal Police. One of ASIC's key problems is it is overstretched and understaffed, and as a result Australia ''gets what it pays for'' from the regulator.
ASIC began life as the overseer of corporate and securities law but now has responsibility for areas including insurance, superannuation, credit markets, margin lending and sharemarket supervision. This is clearly affecting ASIC's enforcement activities, particularly in core areas such as corporate misconduct and prosecuting serious breaches of directors' duties.
Finally, the government should move soon to amend the ASX corporate governance principles and recommendations, to require companies listed on the exchange to report on their anti-corruption and due diligence measures and systems. In 2013 the ASX corporate governance council is reviewing these recommendations.
Currently, while listed companies do need to report on their general risk-management strategies, there is no specific requirement to report on programs or systems designed to prevent or report corruption.
Indeed, research suggests that as many as 40 per cent of Australia's top 200 listed companies do not prohibit the giving or receiving of bribes in their codes of conduct, and more than 80 per cent do not prohibit facilitation payments.
Overall, the government needs to take swift action to protect its international reputation as a country that does not condone corruption. How the current RBA, NPA and Securency cases are dealt with and what response the government makes will have a direct bearing on Australia's global reputation. A strong response is needed or we run the risk of being seen as a country that talks a lot about anti-corruption but ultimately fails to act.
As Michael Ahrens, executive director of Transparency International Australia, has said: ''It only takes one act of international notoriety to damage the reputation of the whole country. The good work of so many Australian businesses and anti-corruption agencies counts for little against one damaging episode.''
Kath Hall is associate professor at ANU College of Law and a fellow at Edmond J Safra Centre for Ethics, Harvard University.