Asian Corruption

Do we accept it as a cultural thing?

My Lawyer

S M Littlemore QC

Corruption

Corruption is akin to cancer growing in a human being. It is very hard to stop. Treatment must be severe.

TI Corruption Perceptions IndexAsian Countries

~10 Highly Clean ~0 Highly Corrupt Japan 7.1Taiwan 5.6Malaysia 4.9South Korea 4.5Sri Lanka 3.7China 3.5

TI Corruption Perceptions Index

Asian Countries (cont)~10 Highly Clean ~0 Highly Corrupt

Thailand 3.2India 2.7Pakistan 2.6Philippines 2.6Vietnam 2.4Indonesia 1.9Bangaladesh 1.2

Corruption is Contagious

“Is it all that surprising that when they saw the boss hog sticking his snout in the trough that they put

their snouts in alongside him”

Paul Coghlan QC in Crown v Quinn,April 1997

TI Most Corrupt Leaders in the World

US$1 Mohamed Soeharto (Indonesia) 15 - 35 Billion2 Ferdinand Marcos (Philippines) 5 - 10 Billion3 Mobutu Sese Seko (Zaire) 5 Billion4 Sani Abacha (Nigeria) 2 - 5 Billion5 Slobadan Milosevic (Serbia-Yugo)1 Billion6 Jean Claude Duvalier (Haiti) up to 800 M

TI Most Corrupt Leaders in the World

(cont) US$

7 Alberto Fujimori (Peru) up to 600 M8 Pavlo Lazerenko (Ukraine) 114 - 200 M9 Arnaldo Aleman (Nicaragua)100 M10 Joseph Estrada (Philippines)up to 80 M

Common Elements in Countries of the Corrupt Leaders

~Majority of people are poor

~Rich in mineral resources such as oil and gas, gold and diamonds, iron ore, copper, nickel, tin, bauxite, manganese and natural resources such as timber, coconut and coffee

~Leaders have friends in high places

Peter Elgen - Group Chairman

Transparency International

“It was essential that corrupt governments do not steal from their own people. This is now an urgent

priority if lives are to be saved”

Soeharto

~Corrupt Years - 1967 - 1988~1959 - Implicated in corruption -

Promoted to Brigadier General

~1970s - Corruption within national oil producer - Estimate US$10 Billion

~1980s - Soeharto’s six children launch business ventures with state money

~1997 - Burmese road construction by daughter “Tutut”

~1997 - Cars exported to Burma by companies owned by sons

Soeharto (cont)

~1997 - World Bank report 20-30% Indonesian development budget embezzled by Soeharto Family

~1997 - Soeharto complains of levels of corruption in Burma affecting his investments!!

~1999 - Time Asian Report - Soeharto family worth around US$15 Billion (cash, shares, real estate, jewelry, fine art)

Soeharto (cont)

~2002 - Soeharto’s son Tommy Jailed for murder of a judge conducts business from a luxury apartment within the jail

~2000 Soeharto - Investigation for corruption under his Presidency - US$571 million of Government donations utilised to finance family investments

Soeharto (cont)

TI Estimates Soeharto Embezzlement between $15 - 35 Billion

Friends in High Places

“Big Soeharto”

Corruption

ARMY LITTLESOEHARTO’S

PARTYLEADERS

Marcos

~Corrupt Years: 1965 - 1986

~Estimated amount stolen: US$5 - 35 Billion

~Government loans to favoured private individuals

~Takeover of private enterprises with little compensation

Marcos(cont)

~Trips and shoes for Imelda paid by Government

~Kickbacks and commissions from overseas organisations

~Issuing of Presidential decrees to favour individuals: Benedicto & Cojuangco

Marcos(cont)

~Use of shell and dummy companies to invest in real estate in New York, California and Hawaii

~Skimming of foreign aid to Swiss bank accounts

~Deposits made with pseudonyms, numbered accounts and codes in overseas accounts

Eduardo “Danzing” Cojuanco

~Cojuango was one of Marcos cronies who was airlifted to Hawaii along with the dictator

~Beneficiary of Coconut Levy Marcos - harsh on small coconut growers

~Bankrolled Joseph Estrada to victory in 1988

Eduardo “Danzing” Cojuanco

(cont)~Still being pursued for corruption

by Philippine Commission on Good Government

~Majority owner of San Miguel breweries

~Property in Mudgee - Private aircraft hanger at Mudgee Airport

~Horses trained by Waterhouse & Freedman - very much a “Darling of the Racing Fraternity”

Eduardo “Danzing” Cojuanco

(cont)~Took over National Foods (Pura

Milk, Yoplait, Big M, Farmers Union, King Island Cheeses)

~Also owns Berri Juices and Tasmanian brewer - James Boag

~Silence from Canberra or watchdogs

Tsunami Aid

~8 months after the Boxing Day Tsunami according to Oxfam poorest victims who were the worst affected have benefited the least.

~In Sri Lanka Oxfam has evidence that aid has been directed to landowners and businesses rather than to the poorest and marginalised.

Tsunami Aid (cont)

~In Aceh there is little evidence of permanent accommodation

We must accept it because it is “the cultural thing” is

ancient history“Gifts are the great pseudonym for

bribes”.It is the cultural thing to accept and give gifts (gold Rolex watches).It will be like insulting the person if you don’t accept gifts (expensive) dinners (lavish) and accommodation (5 star).

“That is a load of codswallop”

Singapore Example

~After Lee Kuan Yew

~Used its power to tighten laws relating to corruption

~Added muscle to official agencies

~Campaign vigorously to maintain ethical standards

~Apply the rules to all - in the public and private sectors as well as politicians

~Clean administration

First Let’s Put Our Own House in Order

~After Bond & Skase in the eighties they said it wont happen again. We have the mechanisms.

~After Ansett, One Tel and HIH in the new millennium they said it wont happen again. We have stronger mechanisms.

~In 2005 it did happen. Part-time comedian and lawyer showed that mechanisms were weak.

What can we do about Asian Corruption?

~Do you have a Code of Business Ethics?

~Have you looked at the ICAC guide “Developing a statement of business ethics?”

~If you have such a Code, what type of awareness program is in place?

What can we do about Asian Corruption?

(cont)~How do you transmit the message to your private sector goods and services providers

that we don’t accept gifts, benefits, hospitality, meals, travel and accommodation

Peter Elgen - Group Chairman

Transparency International

“Corruption hits hardest the poor and the vulnerable. Corruption

makes it impossible for millions of people, especially in developing

countries, to earn an honest living”