This week's ABC 4Corners report 'Dirty Money' revealed allegations of bribery of foreign officials through global agents who were paid higher than normal commissions to secure contracts for RBA's Melbourne based firm, Securency.

Securency manufactures the plastic polymer banknotes we use in Australia, touted much for it's anti-counterfeit technology.

This is not the first time Australia has been involved in international bribery scandals for trade - AWB was the most infamous.

The question comes down to whether the RBA or Austrade were aware of these dealings and turned a blind eye and what are the implications for Australia's standing in the international community.

The investigation is ongoing and there has been no official findings as yet.

There is also a question of integrity by the ABC and The AGE - whether it was fair to air such a story without the findings of the official investigation. By all accounts the AFP ignored earlier reports so perhaps the official investigation gained impetus only because of the allegations raised earlier by The AGE.

It is difficult to know as the AFP, RBA and Securency refused to be interviewed, which is probably more due to legal considerations while the investigation is ongoing, rather than evasion.

I tend to think IF the evidence is overwhelming, as indicated by the whistleblower and others interviewed in the piece, then journalists have a duty to report.

What do others think about the implications of the allegations for Australia?

http://www.abc.net.au/4corners/content/2010/s2905618.htm

http://www.theage.com.au/national/bank-bribery-probe-widens-to-europe-and-asia-20100525-wb14.html

http://www.businessspectator.com.au/bs.nsf/Article/RBA-takes-Securency-claims-very-seriously-pd20100525-5S2LL?OpenDocument&src=hp4

Response by Securency on their website:

http://www.securency.com.au/en/about-us/announcements

moral relativity can only lead to corruption. This is no better demonstrated than the number of expelled corrupt State Pollies over the last 10 years. We are reaping the stupidity of this secular dogma. All money becomes dirty when put into the hands of corrupt people who are self righteous in their own eyes. This applies as much to religous people as it does secular.

That is a very tricky one Pelican, for the following reasons.

When AWB were nailed, something like 2000 companies in total were
nailed. Only 2 have seemingly ever been dealt with, one being
AWB. That includes all those American and European companies etc.

Fact is that in many countries, you simply won't do business.
AWB would have sold no wheat to Iraq, if they had not gone along
with the trucking fees, that is the reality.

Its not with all products, but certainly with products where Asian
companies are competitors.

So lets say Pelican runs an export company. Are you going to do
no business, or do what all the rest are doing?

runner
I agree with you that corruption is not limited - secularists and non-secularists are equally corruptible it always comes down to one's own personal ethics.

Yabby
I was thinking a bit along those lines too. The questions about whether government knew - following on from AWB.

If Australian companies (some with government links as this one) are willing to pay bribes and everyone else is doing it there needs to be a global agreement or understanding that bribes are unacceptable. The UK and the US are making all the right grunting noises on this one, but if bribery is a 'natural' part of doing business in some areas of the world one assumes that many Western democracies have been guilty.

The real cost is to the people who have to bear the brunt of higher prices or in some cases money that might better have been put into development rather than line the pockets of the greedy.

Sort of makes a complete nonsense of the idea of 'free trade' then doesn't it?

And it gives a fresh insight into the idea of 'organised crime'.... and maybe that is the actual role of governments, to organise crime for the benefit of the elites of the world?

After all, passport fraud is OK as far as our governments are concerned, so long as it's them, not us... and I'd have never guessed that without Honest Julie blurting it out the other day.

As for runner's attempt to blame 'secularists', whatever is meant by that, there can be no larger system of organised crime than 'the Church', as far as I can see.

The Vatican is a continuing AWB that few seem to care about.

I suspect that if bribes are part and parcel of business, as they clearly are, then there is no chance of getting them banned... anymore than any government is going to work to rid us of tax havens or a global tax rate that prevents the exploitation of one nation after another.

Pelican,

As I see it all the information isn't in so a definitive answer would be premature.

I find Yabby's argument unacceptable given it's based on three rather dubious assumptions and ignores the fourth/fifth.
- Everybody else is doing it .
- Its only wrong if you are caught.
- the end justifies the means.
- Yabby's argument IGNORES THE LAW... there is no excuse under law.
- I would maintain that there is/should be a higher standard applied because of the RBA,sovereign link.
- The program allegedly revealed that a sister company (totally privately owned) that shared the top man stopped dealing with agents but it wasn't enforced with Securency why?

On the surface, This sorry saga potentially speaks volumes about the potential deliberate malfeasance or incompetence.
i.e. which numb nut didn't do or read a Feasibility study into setting up the company including a SWOT analysis? Market assessment should have raised the market probability of corruptions should have put in and monitored protocols to minimize it.

Austrade and the Fed Police's roll in this bears looking at too.

Business doesn't have a divine right to do what ever they want regardless of the laws that apply.
Even under Capitalism there is no guarantee that business to exist simply because it has a product it wishes to sell.

Examinator, I have passed no judgement as to what is right and
wrong, but simply pointed out the realities of trade in many
places.

When I was exporting highly perishable products to SE Asia,
importers budgeted for a customs payoff fee, for if they
did not pay, the produce would sit on the border on some
technicality and rot.

So all I'm doing is pointing out what happens in many countries.
What is law or not law in these countries hardly matters, for
its enforcement of laws that is the question, not what the
law says.

One of my accountant's customers was on business in Kalimantan.
He had a car accident. He had not broken any road rules, but
the judge decided that if he had not been in Kalimantan, the
accident would not have happened, so he was found guilty and fined.
That is the sort of law of the jungle that you are dealing with,
its simply not like here, get used to it.

So my point was this. Not with all things but certainly with some,
you might as well take your bat and ball and go home and forget
exporting, if you ignore how business is done is some of these
places.

Protest all you like, because the courts in the third world
won't back you, for they too, commonly can be bought.

TBC and exammy
Yes it is certainly morally bankrupt. Free trade has always been a furphy for many reasons.

It may be a bit premature to make judgements on the government side, given we don't know who knew and what they knew. The auditor's report failed to raise some fairly obvious anomalies including monies paid OS to known tax havens.

Why were no alarm bells ringing?

While the media is not perfect, it is thanks to them that some of these events ever see the light of day, but the AFP investigation will hopefully highlight the extent of the problem.

If AWB sets any precedence, nothing much will happen to those involved nor will there be any disincentives for these corrupt activities. The Cole Inquiry did not shed much light and those involved within government generally get promoted such as those who know the truth about children overboard.

Pelican

I think you might be too generous with the government.

After all, it was the Howard government that happily allowed the AWB to work, and the Rudd government that decided not top reopen the ever-so-slightly-dodgy Cole enquiry and let Downer, Howard, 'Mr Sheen', and all the others compeletely off the hook, just in case the ALP were hounded into 'justice' as a result of a corrupt practice during their time in government.

It was the Rudd government that let Howard's goons off the hook with the maritime strike nonsense too, never mind all those public servants still working for Rudd who clearly fibbed for Howard in the children-overboard.

Incoming governments never seem to follow up on what so many can see is a lurk from the outgoing one.

So both sides are 'in it' together.

Neither will we see anyone 'pay' for the insulation scams, apart from we taxpayers of course.

I doubt Garret actually intended to create a scam, and allow millions to be effectively stolen, but he did manage to organise that outcome, and he is now care free, and so are all the public servants, and the dodgy contractors.

Organised crime comes in many shades, all too often from government.

Probably being too generous TBC. The cynic in me believes the government knew just as they did in AWB. I also believe Garrett did his best to warn about insulation rorts early on but was shut down, as the inquiry revealed to ensure jobs first, safety second as part of the greater nation building plan.

It is possible to do business without bribes if there is a global agreement to stamp out the practice including within it a penalty regime. This is idealistic of course, but in practice it could only work if there was universal agreement.

I notice a new opinion piece on OLO about overpayment of aid consultancies. This is what happens when commercialisation becomes the key in some spheres of society, when social wellbeing should take priority. Aid has become another political football in trade and other negotiations. A US consultancy in Iraq was found to have repainted Iraqi owned equipment at the airports as their own and then charged the American people with the costs of equipment using dodgy paperwork.

Corruption appears to be systemic and I am not sure how effective an oversight body given the range and size of the work it would entail, but it is worth a try.

Yabby and others,
I understood your point clearly from the outset. The mere fact that you view it as 'a tricky....” followed now by your statement of your actions confirm your stance.

My points were. The Australian laws applied therefore Securency was subject to them.
Given it's sovereign links it should have been strenuously clean.
Neither of these are negotiable by to the usual business 'convenience' morality.
Without strict adherence to laws and morality we are no more that that which we ape... callous exploitationists and deserve the international approbation and legal consequences.

You and I have a fundamentally disagree on acceptable business ethics.

I don't believe that business (least of all this one) should enter a market with a business model if it means being part of a corrupting influence of a Countries Sovereign Institutions (CSI). When it is unequivocal that, as a *direct* result of such actions, the most vulnerable people in the client country lose out.

Participating in this corruption and then trying to wantonly *excuse*it, is the moral equivalent of being a member of a lynch mob and saying I only carried the burning torch and yelled, everybody else burnt the black family.

It appears that either there was an Intent to corrupt CSI's and breach of law appears or multi party incompetences are clear. In the process of *prudent* setting up a business one must first assess the Strengths Weaknesses and Other Threats of that model\market. If being a participant in the corruption of SCI and breaking our laws is the only way, then to me, this is an unacceptable condition not optional obstruction.

I morally disagree with you in the manner of business today, not Capitalism per se.
To Wit. Business does NOT have an inalienable right to exist to the exclusion of everything else particularly the law. Business is a servant of the statutory franchised public (humans).

Part 1

Yabby and others Part 2

If I was a farmer selling veg and the only way I could make money was to corrupt SCI, I'd look for a different business model/market or simply invest in another industry not advertise my willingness to break the law.

I am also cognisant that multinationals and some individuals subscribe to the previously mentioned morally expediences and I would suggest *that* is one of the root causes of our par less state today.

I am sure you'll now interpret this in your usual political ideological extremes hence the "and others".

Yabby

I fully endorse Examinator regarding your lack of business ethics.

>> I morally disagree with you in the manner of business today, not Capitalism per se.
To Wit. Business does NOT have an inalienable right to exist to the exclusion of everything else particularly the law. Business is a servant of the statutory franchised public (humans). <<

Just because in some third world country people pay bribes or are subjected to intimidation doesn't excuse anything. One of the reasons Australia ISN'T a a third world country is due to regulation and a higher level of honesty in many of our businesses. We're certainly not perfect, but this "law of the jungle" ideology you favour simply doesn't work indefinitely. In the long term it is unsustainable and is why humans began to evolve cooperative systems. You often make the claim that others don't get what Capitalism is about - Yabby you are the one who doesn't get it. Competition, regulation and cooperation works over the long term for more people. Greed only works for a minority.

Your stance is not really a good advertisement for yourself as a business man either.

*I fully endorse Examinator regarding your lack of business ethics.*

Severin, you know sweet FA about my business ethics. As it happens,
just last month I pointed out to one of the local suppliers, that
the staff had forgotten to bill me for 2000$ worth of supplies that
I'd picked up. He was amazed and pointed out that these days, few
people had my kind of honesty.

*We're certainly not perfect, but this "law of the jungle" ideology you favour*

Severin, please point out where I said that I favour it. I simply
pointed out, that in much of the third world, its reality. Your other
option is to shut down many exports. You choose. That was the
point of the dilemma.

Corruption goes on right here, under your noses. How many times
does the public service advertise a job, but it goes to one of
their friends? I've been told its very common. How many
"consultants" are hired by Govt, for huge salaries, who just happen
to be mates with those in charge? The list goes on.

"How many consultants" are hired by Govt, for huge salaries, who just happen to be mates with those in charge?"

Too many including in my last department. A review done by a good friend of our boss (according to one of the consultants), to validate the downsizing of an area despite the mounting delays and great negligence in the duty of care to those we serve. Followed up by bullying tactics should anyone have the temerity to raise concerns.

If more people refused to be involved in corrupt or unethical practices, even for business reasons ie. do your homework prior to investing capital, coupled with OUTING those who partake we might stand a chance ie. remove the market for would-be bribers.

The irony about the food trade is while Australia is sending it's best meat OS to satisfy demand, Australia is importing inferior food. To top it off we pay more for the inferior lamb product now than in previous years when lamb was the cheaper meat. Perhaps Yabby you can elaborate. Why is lamb dearer than beef when it takes a lot more money to raise beef to maturation. I am asking in sincerity in case there is something I am missing.

Today Tonight (not always reliable) aired a segment about food coming from China and elsewhere to NZ, repackaged as NZ food to sell to Australian consumers. The NZ branding being more marketable up until now less likely to possess contaminants. Smithton in Tasmania has to suffer the consequences of the closing of the McCains factory who are going offshore to NZ. Well I for one won't be buying.

That is why it is so important for Aussie consumers to buy local wherever possible.

Is this the way we do business now? We don't need to import food that we can grow here to sustain jobs. We go on about the mining industry jobs and feed into the hysteria about mining tax but when anyone mentions losing agricultural based jobs to the shackles of free trade, there is not a whisper by those same protestors.

*do your homework prior to investing capital,*

Sheesh Pelican, you clearly lack business experience :) I was amazed
what I found out, once I started participating in overseas trade,
but not a word of this was mentioned, before I started trading
with SE Asia. For that very reason, most of my exports went to
Europe, when we could get past the trade barriers set up by Govts.

*The irony about the food trade is while Australia is sending it's best meat OS to satisfy demand, Australia is importing inferior food.*

Not so Pelican. The local trade gets first pick, as long as they
pay the price. There are 2 distinct markets in Australia, one is
quality, one is price. But some Aussies want the best quality at
the el cheapo price and I'm afraid life does not work that way.

*Why is lamb dearer than beef when it takes a lot more money to raise beef to maturation.*

Because at the moment there is a shortage of lamb, but not a shortage
of beef, for all sorts of reasons. Not just here but globally, farmers
have been bailing out of growing sheep. Our own sheep flock is at
its lowest in numbers, since about 1906 or something like that.

Reasons being, wool has gone from having a value, to being a cost
for many. So unless you breed wool free sheep like me, it puts
people off sheep. Next, wild dogs in many areas are so bad, that
farmers can't run sheep anymore, but cattle seem to survive them.
Next, low sheep prices for so long, caused farmers to liquidate
flocks and move into cropping, not so for cattle farmers.

It doesen't really cost more to grow beef, as conversion rates from
grass to meat are about the same, between the two species. I prefer
meat sheep, as they have the personality of goats, have lots of twins
and are more my size then cattle. They are also better at eating
very short pasture then cattle.

*That is why it is so important for Aussie consumers to buy local wherever possible.*

Well I have nothing against NZ food, they do a great job growing
it. But I agree, labels should be accurate and reflect where its
actually grown, so that consumers are informed.

*We go on about the mining industry jobs and feed into the hysteria about mining tax*

Says you who goes to Aldi to shop for cheaper food, yet you want
workers to have higher wages, which mining provides.

Typical female, all confused :)

Yabby
Thanks for the info about the lamb market.

Where did I ever say I shopped at Aldi. I have shopped at Aldi less than Woolworths or Coles and IGA. Of late we do most meat shopping from the farm gate and when I can fruit/veg from farmer's markets or the backyard.

From memory you are homing in on an older comment about the irony in Aldi's promise to sell at least one item in each category sourced from local farmers in any country they establish, while Australian owned supermarkets seem more and more intent on sourcing the cheapest stuff which is usually from OS. You are the one that has interpreted my earlier remark into a statement about shopping choices.

I disagree that the best stuff always gets sold here. How many times do we hear beef exporters promote the fact that the very best beef gets exported.

To repeat, re the mining tax. All I want is a fair price for the primary material whether it be through tax reform or changes to the royalty regime.

Pelican, some time ago you mentioned about the virtues of shopping
at Aldi. I then pointed out that Aldi is owned by 2 of the world's
10 richest people, a couple of German brothers. People go to Aldi
for one reason, price. Personally I think that Coles and Woolies
get a bit of a bum steer from Channel 7 and others, as they are
an easy target. Overheads is the difference. Coles employ a whole
lot of people, Woolies manage with less, Aldi even less, everything
is cut to the bone. Actual profits in the supermarket business
are in fact quite slim, as we know from the figures, these being
public corporations.

*I disagree that the best stuff always gets sold here.*

It doesent always get sold here. It gets sold here when locals
are prepared to pay the going price for it. For meat to be really
good, it should age for a while. That takes chiller space and it
has to be cryovacced alot of the time. But again, what is the
best meat? The Japanese insist on long fed beef for their choice
cuts, so cattle go on grain for months, so that the meat is marbled.
Personally I'm not that keen on long fed beef.

With lambs, I helped a bloke set up a business, where he goes on
farm and selects the best prime lambs for his home delivery serrvice.
He can pick the eyes out of them, before they ever get to a saleyard
or meatworks. But there are many things that can affect meat quality.
Sometimes its as simple as cold shortening, ie when the carcass
is cooled down too quickly, before rigour mortis sets in. The meat
becomes tough, no matter how good the original lamb was.

Pelican, I think that you will find that most of these miners are
quite reasonable and intelligent people. If some consultations
had been had with the industry, before it was announced as gospel,
we'd all be better off. So the problem right now is as much
how it was done, as what was done. .

Errr...no Yabby. You did not read my last post. To repeat briefly, I have always said it is ironic that a foreign owned company ensures that at least one item in each category is locally sourced while the Australian owned ones make no guarantee. This is not the same as 'virtues of shopping at Aldi' given that Aldi is foreign owned and you well know my views - or should. Woolworths and Coles also sell Australian produce they just don't push it as a positive.

You can misrepresent my position all you want while avoiding the real issues. :p

Sheesh, I'm falling behind here. I've been out seeding oats, so
that you lot can have your muesli for breakfast :)

Pelican, our discussion about Aldi goes back a long way, but I could
not be fagged to search the archives, if that is even possible.

It now sounds like you have fallen for their marketing spin. For
of course one product per category can be defined in many ways.

The difference between Aldi and Coles/Woolies, is all about choice.
They stock thousands of lines, Aldi something like 700. It costs
less, to stock less, so they make the choice for you, alot of the
time, you don't get to see the other products.

Because of this wide choice, C/W invariably include both local
and overseas lines, home brand and other brands, in their selection.
Consumer demand drives what their shelves stock. It it sells in any
kind of reasonable amount, they will stock it.

Let me give you a great example. Carman's muesli is a company started
by a housewife in Victoria. It started as a 2 bob show and she has
grown from there. My local Coles store, stocks all her 5 or so mixes.
My IGA store stocks one. There is Carman, competing with the big
boys, Nestle (Uncle Toby's) and Kellogs. How many lines of her
cereals does Aldi stock?

Now if my case, Coles also stocks Lindt chocolate and Thomy mayonaise,
as I won't buy the local rubbish :).

Choice and value is what supermarkets should be all about, and I think
our chains deliver on both.

I am constantly amused on OLO, for I remember one discussion with
a bloke who seems to consult for Govt or similar, complaining about
the cost of a tin of 3$ pineapples. So what does he do for 3$?
I'd be surprised if it buys more then 1 minute of this time.

I couldn't tell you how many Aldi stock Yabby, I am rarely in there, but thanks for the oats - I do enjoy a good muesli. I am not a marketing agent for Aldi, just don't know why Woolies and Coles don't push a more Aussie grown/made agenda.

I have no problem importing items that Australia does not manufacture or produce, it is the silly things that can easily be grown here. If a bulb of garlic can be grown, tended, picked, packed and shipped long distances and still remain competitive with the Aussie grown it might indicate inequitable low labour costs, barely above subsistence.

We are probably getting off this subject a bit much, see you on another thread and we can do our usual sparring there. :)

*just don't know why Woolies and Coles don't push a more Aussie grown/made agenda.*

Well they do, by stocking Aussie grown on their shelves. Perhaps
management are just less tribal then you are :) At the moment
we have a campaign here in WA shops, organised by our State Govt,
to "buy best, eat West". In other words, better to eat WA produce
then your Eastern States rubbish :) Coles and Woolies have both
gone along with that.

You really have a bee in your bonnet about this garlic. I can buy
either imported of local at my Coles store, its my choice, as it
should be. It seems that WA now has a number of garlic farms,
according to a radio report I heard the other day. You'll simply
pay more for the Aussie stuff. Its your choice.