New Zealand’s historical dominance of the Corruption Perceptions Index may be slipping based on the last survey. Although it retained equal second, its ranking fell and recent events may indicate a continued downward trend.
In the most recent Transparency International Corruption Perceptions Index (CPI), New Zealand (CPI score 83) ranked equal 2nd with Finland (with a score of 87), and fell from 1st place (with Finland and Denmark) in 2021.
New Zealand continues to lead the Asia Pacific region and ranks almost 200% higher compared to the global average CPI score of 43, which has remained the same for over a decade. New Zealand once led the world, but its progress is now stagnant and may even be regressing, while other countries around it improve.
Possible Reasons
Three possible reasons that may contribute to a further downfall if left unchecked are:
- Organised International Crime
While NZ has largely avoided organised crime, recent events have shown it is coming. In 2018 an Auckland police officer was caught selling information from the Police NIA (National Intelligence Application) system to criminal groups. A year later, a Ports of Auckland supervisor with African connections helped shift a shipping container, believed to have drugs inside it, and $100,000 was found in a shoe box at her home. Earlier this year more than $18 million of alleged bribes from a South American corruption scandal were frozen in New Zealand after police were given more time to “untangle the web” of international bank accounts.
- Facilitation Payments
Facilitation payments or ‘grease’ payments - small payments made to a foreign public official to speed up routine actions to which the payer is already entitled – are still permitted in NZ. Although exceptions can apply, experience from other countries (including Australia where they are also permitted), proving a ‘small payment’ and ‘routine actions’ often make them indistinguishable from a bribe.
- Unchecked money laundering
New Zealand is recognised as a good place to hide illicit funds. Each year at least $1.35 billion of income for money-laundering is generated inside New Zealand each year and foreigners recognise they can place assets in trusts based in New Zealand but do not have to disclose information about their activities. The rise in international money laundering has been exposed by the 2016 Panama Papers, and the multi-billion-dollar Malaysian 1MDB fraud, both of which implicated NZ. The government has recently made changes to try and tackle this issue often associated with corruption and funding terrorism.
It will be interesting to see, when the next CPI is released early next year, if a trend has started for NZ, or if it is just a bump in the road.
Calvin London
Calvin London has over forty years of international experience in compliance and organisational ethics. He is a regular contributor to international compliance and ethics journals and consults to industry from his Australian Perth-based company.
