Australia's results stagnate in the latest Corruption Perceptions Index  

What you need to know

• Australia again scored 75 out of 100 in Transparency International's recently released Corruption Perceptions Index (2023).
• Transparency International Australia (TIA) and other commentators observed that the establishment of the National Anti-Corruption Commission (NACC) did lay promising foundations for improving Australia's perceived public-sector corruption levels. However, it is clear that more must be done for Australia to regain its historic best ranking (7th out of the surveyed countries, with a score of 85 out of 100, in 2012). This includes reducing the influence of big money in politics, further whistleblower protections, and enacting enhancements to foreign bribery and AML/CTF laws.
• Reforms on some of these topics are on the Federal Government's agenda for 2024.

What is the Corruption Perceptions Index?

Transparency International recently released its annual Corruption Perceptions Index (CPI) for 2023.

The CPI ranks 180 countries based on their 'perceived level of public-sector corruption', according to independent experts and business people. Countries are scored between 0 to 100, with 0 being highly corrupt and 100 being very clean, and ranked by their score.

The CPI ranking is frequently used by both public and private sector organisations worldwide to assist in assessing bribery and corruption risks in given locations.

Australia's efforts to combat bribery – a year in review

Australia once again scored 75 out of 100 in the CPI for 2023. It was ranked 14th out of the 180 surveyed countries.

We provide a snapshot of some of the developments in Australia's integrity system over the last year, below.

1. National Anti-Corruption Commission

The NACC commenced operations in July 2023. The NACC has the power to investigate the conduct of Commonwealth "public officials" and private entities interacting with the Commonwealth. To date, NACC has received nearly 2,500 referrals, with a subset of those under preliminary or full investigation.

You can read more about the NACC in our previous articles here, here, here and here.

2. Combatting Corporate Crime Bill

The Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023 proposes to introduce a new corporate offence of failing to prevent foreign bribery which would see companies liable for foreign bribery by their employees, contractors, or other associates, unless they can show they had "adequate procedures" in place to prevent such activity.

The Bill passed the House of Representatives on 5 September 2023 and is currently before the Senate.

You can read more about the Bill in our previous article here.

3. Whistleblower reforms

In July 2023, the Public Interest Disclosure Act 2013 (Cth) was amended to deliver improvements for public sector whistleblowers and support disclosures of corrupt conduct to the NACC as part of the Federal Government's two stage plan to improve Australia's whistleblower framework.

The second stage of reforms involved public consultation on further improvements needed to address the complexity of the current whistleblower framework, including if additional support is needed for whistleblowers. TIA, in a submission to the public consultation (which closed on 22 December 2023) called for an independent body to be established to protect public sector whistleblowers.

The Federal Government is expected to report on the outcome of the public consultation later this year, although the precise timing is not clear.

4. Improving anti-money laundering laws

Public consultation on proposed reforms to the AML/CTF laws closed in June 2023. The consultation focussed on whether the current AML/CTF regime should be simplified, modernised, and if the regime should extend to non-financial gatekeeper professions such as real estate agents, accountants and lawyers.

The Federal Government has advised that further consultation will occur, although it is not clear when.

5. Increasing transparency of political donations

The Joint Standing Committee on Electoral Matters (JSCEM) inquiry into the 2022 federal election considered whether Australia's political donation laws should be reformed, following the identification by the Australian Electoral Commission of significant donations from high risk sectors including gaming and mining in FY21-22.

The JSCEM published its final report in November 2023. JSCEM's key recommendations included prioritising transparency in the financial side of Australia’s electoral system (including by lowering the donations disclosure threshold, ‘real time’ disclosure requirements, and donation caps).

It remains to be seen whether the Federal Government will propose any reforms to Australia's political donation laws based on the outcome of the JSCEM's inquiry.

6. Greater lobbying reform

The Lobbying (Improving Government Honesty and Trust) Bill 2023 was introduced last year to strengthen Australia's current lobbying laws, including by extending the Register of Lobbyists to include registered professional lobbyists acting on behalf of third parties; enhancing transparency by setting out information that must be included on the Register of Lobbyist; and prohibiting lobbying by an unregistered lobbyist.

The Bill is currently before the House of Representatives.

How does Australia fare against the rest of the world?

This year the global average CPI score remained at 43 out of 100, with two thirds of the surveyed countries scoring below 50, and 23 countries falling to their lowest scores to date.

This year's top performers, to no surprise given their historical strong performance, were Denmark (90), Finland (87), New Zealand (85), and Norway (84).

The lowest performers were Somalia (11), Venezuela (13), Syria (13), and South Sudan (13).

Australia's largest trade partners for imports and exports remained largely the same from 2022 to 2023: China (43); Japan (73); South Korea (63); India (39); Singapore (83); Taiwan (67); and the US (69).

In the past 12 years, over 28 countries have shown improvement in their scores, 34 countries have experienced significant declines, and 118 countries have remained stagnant.

What's next?

While the CPI is based on perceptions of public sector corruption, its scores and rankings provide an indicative (and influential) measure for businesses when assessing corruption risks associated with any given surveyed country.

It remains to be seen if the mooted developments and reforms aimed at addressing corruption concerns will improve Australia's score in the next CPI.

In the meantime, stay tuned for our updates on some of the foreshadowed reforms in this space over the coming year.

Want to know more?

• What does National Anti Corruption Commission mean for Australian companies and government entities (4 October 2022)
• The NACC at last Australias National Anti-Corruption Commission Becomes Law (2 December 2022)
• The new National Anti-Corruption Commission commences on 1 July 2023 - are you prepared? (28 June 2023)
• Third time's the charm? Australia looks to introduce a 'failure to prevent' foreign bribery offence (again) (29 June 2023)
• The National Anti-Corruption Commission: what you need to know about its powers to require information and documents (17 August 2023) 

Author: Rani John, Partner; James Clarke, Partner; Dario Aloe, Senior Associate; and Luke Thiagarajah, Lawyer.