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Maybe the Kiwis aren’t so clean after all

New Zealand has ranked best for eight straight years on TI’s corruption perceptions index. But that spotless reputation has been tarnished lately by bribery scandals in business, politics, and sports.

Several top cricket players faced bribery allegations last week for alleged rigging of games in two English county matches in violation of England Cricket Board’s anti-corruption code. One former New Zealand player, Lou Vincent, hasn’t denied the allegations, the Washington Post reported Wednesday.

A lawmaker, John Banks, is on trial for knowingly receiving political donations from two companies that were recorded in official returns as anonymous, a violation of New Zealand’s campaign reporting laws.

In business, New Zealand’s Serious Fraud Office (SFO) is investigating kiwifruit exporter Zespri. A Zespri subsidiary in China was found guilty there of being an accessory to under-declaring customs duties.

The China court fined the unit $960,000, sentenced its employee to five years in prison, and saod improper gains of $11.6 million should be repaid. 

The SFO has also recently convicted 18 directors and officials from eight financial firms that faltered during the 2008 global financial crisis.

In October, the Organization for Economic Cooperation and Development said it had “serious concerns” about New Zealand’s lack of enforcement against business people who may be offering bribes in foreign countries.

The report reasoned that “outdated perceptions that New Zealand individuals and companies do not engage in bribery may undermine detection efforts.”


Julie DiMauro is the executive editor of FCPA Blog and can be reached here.

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1 Comment

  1. The challenge for New Zealand is that it is small and that business circles are limited. Internally, this means that New Zealanders can be quite parochial, and there have been a number of publicly reported cases of cronyism and nepotism as a result.

    The challenge with the methodology used by Transparency is that it is based on public perception.

    If the public is not aware of what constitutes corruption and that it includes nepotism and cronyism then the public perception may be that it doesn't exist.

    I have reviewed a number of reported cases in the New Zealand media that would be defined as cronyism or nepotism, including a major court case over a legal adjudication several years ago. Since the media also doesn't flag such cases for what they are, the public is not educated regarding what constitutes corruption.

    Externally, New Zealand businesses are small by world standards, with exceptions such as Fonterra (tainted by a major fraud scandal some years ago in China). New Zealand businesses therefore have very little leverage on the world stage. To successfully establish beachheads and operations internationally, they are hampered by limited resources to ensure such operations are profitable and otherwise successful. This is a challenge that creates pressures to take shortcuts, and I can confirm such shortcuts are being taken based on my own experiences and observations.

    Education is clearly needed, to clarify to the public what constitutes corruption, for the media to report cases correctly, and for NZ businesses operating overseas (and at home) to be aware of the risks.

    Fortunately, New Zealand has a very strong and value driven middle class. This can be observed from public comments to a similar article as you have noted appearing in a major New Zealand on-line newspaper. New Zealanders are also quite socially oriented and focused on fairness and equity. And I would rate the New Zealand police force the most transparent and clean in the world.

    Your article just shows there is no opportunity to be complacent, and that it is easy to lose what has been taken for granted through the bad actions of a few. A good wake up call for all New Zealanders.

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