New Zealand – A Country Complacent To Organised Crime

Published: Thu 8 Oct 2020 11:40 AM
AsiaPacificAML – Kerry Grass, Founder, AML360New Zealand has no Anti-Corruption Agency
An Anti-Corruption Agency has the remit to be - ‘specialised in fighting political corruption and engaging in general anti-corruption activities.’ (Wikipedia).
The Serious Fraud Office (SFO) is New Zealand’s back-stop for investigating serious fraud. Complaints to the SFO have doubled in the past 4-5 years. Current investigations are equalling 1% of complaints received.
In the 2019 annual report, the Director of New Zealand’s Serious Fraud Office advised, –
“The threats to NZ’s reputation have probably never been greater today than any other time in our history.”
And later, -
“Serious financial crime can impact personal, family and community wellbeing. It is insidious, everchanging and disproportionately hurts the most vulnerable groups in our society.”New Zealand Government are Turning a Blind-Eye
Responsible Ministers to New Zealand’s Justice system have knowingly, for at least 17 years, turned a blind eye to the real risks facing New Zealand in combatting corruption and trans-national crime.
Ministers of Justice (present and past) explain their complacency of anti-corruption controls by referring to New Zealand’s ranking in the Corruption “Perception” Index (CPI). However, any decisions based on a ‘perception’ is risky in itself. Further, it has been well recognised by many scholars, including a former researcher for Transparency International, that the CPI needs to be radically revised to be a valid measure for comparative corruption. 1Failing United Nations
Operating without a dedicated Anti-Corruption Agency prevents NZ successfully ratifying the United Nations Convention Against Corruption (UNCAC).
The UNCAC is the only legally binding universal instrument equipped as an anti-corruption instrument.
NZ committed to the UNCAC in 2003. 17-years later, NZ has not effectively ratified its commitment to the UNCAC.Warnings of ‘Urgency’ and the Need for ‘Integrity’ Ignored
The concerns of NZ’s complacent stance on anti-corruption has been echoed by the Chair of Transparency International New Zealand (TINZ), Suzanne Snively.
In the 2019 NZ National Integrity Assessment of systems to fight corruption, the assessment commented -“ … progress has been slow in many areas and in some non-existent …”“Parliamentary Oversight of the Executive - Concerns include the use of urgency to pass controversial legislation and the lack of specialist expertise and specialist committees to hold the executive to account.”“This lack of urgency is evidenced by New Zealand’s delay in ratifying the United Nations Convention Against Corruption …. One explanation for the delay was that the convention requirement for independence in the bodies charged with corruption prevention and the enforcement of anti-corruption legislation was not a priority in New Zealand”.“The fall in ranking may reflect increased publication of information about corruption by the Serious Fraud Office …”“The core message of this report is that it is beyond time for serious and urgent action to protect and extend integrity in New Zealand.”Why has it gone wrong for New Zealand?
For too long, NZ’s Ministers of Justice have exploited the CPI ranking that the “perception” of corruption in New Zealand is “low”.
When a risk is considered ‘low’, the controls to manage the risks are not required to be strong and robust.
If, however, anti-corruption controls are weak in a country and real risks of corruption are ‘high’, then the results are corruption will escalate and the harm (globally and domestically) is literally, immeasurable.
Combatting corruption requires politicians to have integrity, to make informed decisions based on reliable data and finally, commit to adequate resourcing. If any of those parts of the process to combat corruption are inadequate, then corruption succeeds, politicians mislead and the local and international communities suffer the consequences.New Zealand Election
New Zealand is about one week from selecting its preferred political party to lead government. What comes with the lead-up to elections is more political false promises and misleading statements.
Grossly misleading statements from Ministers of Justice create greater harm. When the misleading statements are linked to issues of corruption and organised crime, the harm is extremely serious.National Party
Leading the way in the National Party’s political campaign is Judith Collins. Ms Collins is a former Minister of Justice and Minister of the SFO.
In National’s 2020 election campaign, Ms Collins hasconfirmed her commitment to change the name of the SFO to include “Anti-Corruption Agency” and invest double the amount into the Serious Fraud Office. “Great” some might think – but when you peel back the skin of the proposal and look at its effectiveness, Ms Collins efforts might succeed in moving SFO investigations from 1% to 2%, but it is not really doing anything to make a change and she knows this. As a former Minister of Justice and Minister for the SFO, she is again misleading NZ’s public when she states she will give the SFO the “resources it needs”.
“New Zealand’s most successful crime fighting agency will get the resources it needs to deliver on its stated role as the ‘lead law enforcement agency for investigating and prosecuting serious financial crime, including bribery and corruption.’
Ms Collins has ignored the warnings in the 2019 NZ National Integrity Assessment where the core message is an “urgency” for New Zealand to have “integrity” - “The core message of this report is that it is beyond time for serious and urgent action to protect and extend integrity in New Zealand.”Labour Party
The Labour Party is currently NZ’s leading government.
In an interview in January 2020, NZ’s Minister of Justice, Andrew Little, was questioned about, “What does it really mean” for NZ being at the top of the Perceptions index (the CPI). The Minister stated –
“People have voted New Zealand, or those that want to come here and invest here, know that it is a safe country that takes anti-corruption measures very seriously and we are as close as we can possibly be to being free of corruption”.
Mr Littles statement invites investment into New Zealand on the basis it is “safe”, yet 99% of complaints to the SFO are not investigated by the SFO. These complaints include investors of serious investment fraud.
Though Mr Little suggests NZ may need to examine the “remit” of the SFO, his statement that NZ is as close as it possibly can be to being “free” of corruption has absolutely no integrity.
Like Ms Collins, Mr Little has ignored the TINZ warnings –
“The core message of this report is that it is beyond time for serious and urgent action to protect and extend integrity in New Zealand.”What is the harm of corruption?
When organised criminal groups seek trans-national expansion, they will research the opportunities presented by offshore countries. They are seeking to identify countries that offer the path of least resistance and low detection rates of corruption.
Countries that have loose regulatory oversight to areas of corruption and money laundering will be a breeding pit, allowing organised criminal groups to expand and increase their global power.
Trans-national criminals want the easiest entry point and the fastest methods of moving their dirty money. New Zealand is a conduit country to these organised criminal groups.
Corruption erodes trust in the public sector to act in the best interests of its people. Corruption wastes taxes that have been earmarked for important community projects – meaning the public have to put up with poor quality services or infrastructure, or miss out altogether.
It is in everyone’s interest to report corruption and misconduct but New Zealand has no agency to effectively manage the issues.New Zealand is the Weak Link in Global Chain to Combat Corruption
Where there is a weak country in a global chain of countries, organised criminals will exploit that weak link, targeting those countries that have ‘operations’ that favour the likelihood of operating undetected. This is the basics of corruption.
Combatting corruption is not science. It is fairly simple stuff and requires effective policies, resourcing, monitoring and reporting.
The harm of a country, such as New Zealand, ignoring corruption literally impacts across the world.
When a country’s real risk rating of corruption is “high” and the rating is known, this allows all other countries to be alerted and apply due diligence when trading with that country.
When a country’s reputation is good on the basis of a “perception” of “low” risk to corruption, it means other countries will be less defensive when dealing with that country. Countries that deal with New Zealand will be less guarded which is exactly what organised criminal groups seek to achieve.
With less diligence to their business relationships within New Zealand, criminal groups will have more chance of success.
As an anti-corruption advocate for some 20 years, I am 100% confident in stating – “New Zealand is a country complacent to organised crime and is presenting a real risk to combatting international crime.
Because New Zealand’s government clearly have no intention of making changes to its status, it is time for international watchdogs to sanction New Zealand’s lack of efforts.
1 Fredrik Galtung, Measuring the Immeasurable: Boundaries and Functions of (Macro) Corruption Indices, in MEASURING CORRUPTION 101, 124 (Charles Sampford et al. eds., 2006).

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