In the Regulator’s Crosshairs - Why Private Companies Are Not Immune to Government Integrity Agencies

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Lift Strategic’s Directors are former senior executives in anti-corruption agencies.  They speak from direct experience.

Directors of many Australian companies operate on a dangerous misconception: Anti-corruption commissions only investigate politicians and public servants. It is an assumption that leaves many businesses exposed. While bodies like the National Anti-Corruption Commission (NACC), the NSW ICAC, Victoria’s IBAC, or South Australia’s ICAC were established to root out public sector corruption, their legislative frameworks are deliberately designed to capture private entities that interact with or influence government.

The moment your operations intersect with public funds, government decisions, or regulatory approvals, you are firmly on the radar. You might run a business that has a contract with a local council. Your company might receive a grant from a state government, or you might provide good and services to a Commonwealth enterprise.  The net is wide and many businesses are unknowingly captured.

So how are private businesses captured?

Under modern anti-corruption legislation, the legal definition of a "public officer", "public official" or "public body" varies between jurisdictions, but is far broader than most people realise. Those definitions have been expanded over time to close loopholes surrounding outsourced government work.

For example, if your business provides goods or services to a government department or agency, you are very likely to fall within the jurisdiction of at least one anti-corruption or similar integrity agency.

Under the National Anti-Corruption Commission legislation, if your business has a contract with the Commonwealth Government, your business, your employees, and even your subcontractors are likely public officials and subject to investigation by the Commission.

State and territory integrity agencies have similar, far-reaching jurisdictions.

Whether you are an IT vendor, a construction firm, or a private consultancy delivering a big or small project, you and your staff are expected to uphold the exact same probity and integrity standards as public servants.

If you or one of your employees misuse official information, misallocate funds, or fail to declare a conflict of interest while engaged with a government entity, you might find an anti-corruption agency takes a keen interest in your 'private' business.

In fact, integrity agencies investigate private entities for:

• Bribery and Kickbacks: Offering a public official a financial or other incentive to secure a tender or planning approval.

• Collusion and Cartel Conduct: Competitors secretly conspiring to inflate tender prices on government projects.

• Fraud: Submitting false invoices to a government department or lying about compliance with environmental, safety, or quality regulations.

• Undue Influence: Coercing or pressuring a public official to grant a licence, rezone land, or look the other way on a regulatory breach.

Your company could even be investigated for the maladministration of public funds provided to deliver a particular service.

Being investigated is not much fun

When an integrity agency decides to investigate your company, they generally possess coercive powers that far exceed standard police capabilities.

If a company’s employee is suspected of engaging in some form of improper conduct (or even if you simply hold documents related to such conduct) these agencies can use their far reaching powers to probe deeply into that company’s processes, procedures and activities.

That is a pretty good incentive to ensure your business’s house is in order!

The Lift Strategic Difference

At Lift Strategic, we leverage decades of insider experience, having worked at the highest levels of anti-corruption agencies. We know what triggers an investigation, and more importantly, how to build the robust governance frameworks that place your company in a strong position to combat corruption and maladministration risks.

For private companies, the defence strategy is simple but essential.  Treat your internal integrity, conflict of interest, and probity frameworks as though they will be carefully examined by a powerful independent integrity agency.

With our experience, we can help every Australian business ensure its house is in order.

Call us today.

Michael Riches is a Director at Lift Strategic, advising leaders and boards on governance, integrity, risk management, and regulatory scrutiny.