In December the OECD (Organisation for Economic Development) released its Phase 4 Report on New Zealand’s progress in implementing the Anti-Bribery Convention and Related Legal Instruments.
According to the OECD’s press release:
“New Zealand must strengthen foreign bribery detection and its corporate liability framework for foreign bribery.”
“New Zealand has made progress in reforming its legislative framework to combat bribery of foreign public officials over the past decade, but there has still never been a prosecution of a foreign bribery case and detection levels are low.”
The latest report expresses concern about a lack of awareness in New Zealand concerning its companies’ exposure to significant foreign bribery risks. Uncertainties in interpretation of the foreign bribery offence and deficiencies with the new mechanism undermine its effectiveness in holding companies to account.
The Working Group is also concerned that challenges in meeting the legislative threshold for requesting evidence overseas is preventing the Serious Fraud Office from fully investigating foreign bribery allegations.
There are also restrictions on the ability of the Serious Fraud Office being able to access information on both companies and trusts operating in New Zealand. There are further weaknesses identified in the use of nominee services, which can obfuscate the identity of beneficial owners.
In addition domestic trusts are not required to report beneficial ownership information to Inland Revenue. At the Working Group’s onsite visit, NZ Police noted that the absence of a central or searchable register for domestic (or express) trusts presented a challenge for law enforcement.
The Working Group recommends that New Zealand:
- “Develop and implement a strategy to improve public and private sector awareness of foreign bribery risk, as well as combat foreign bribery.
- Address deficiencies with the new mechanism for attributing corporate liability and increase sanctions for legal persons that engage in foreign bribery.
- Incentivise self-reporting of foreign bribery by New Zealand companies.
- Move forward with previously proposed reforms to modernise its mutual legal assistance regime, specifically to address barriers to requesting overseas evidence.”
“The OECD evaluation process is an important tool to help us strengthen our integrity systems,” TINZ CEO Julie Haggie says. “This is a manual with practical recommendations on implementation and enforcement. Those include reducing ambiguity in law and thresholds for accessing information, as well as increasing penalties. Our public and private sectors need much more awareness and guidance on bribery risks, and we need to do more to support our Pacific neighbours. There is also no national strategy on bribery prevention”.
“We know from population surveys that New Zealanders have a very low tolerance for bribery” says Haggie. “But New Zealanders also have low confidence that those committing bribes will face consequences of their actions”.
This report reflects that gap in our dealings overseas, and it shows that legislators, the public sector and businesses need to ‘walk the talk’.
The report and its recommendations reflect the conclusion of experts from Ireland and Israel, based on information provided by New Zealand, research by the evaluation team and a New Zealand visit in May 2024 which included consultation with public, private, judiciary, media and civil society including TINZ.
The report is part of the OECD Working Group on Bribery’s fourth phase of monitoring, launched in 2016. Phase 4 looks at the evaluated country’s particular challenges and positive achievements. It also explores issues such as detection, enforcement, corporate liability and international cooperation, as well as unresolved issues from prior reports.
The report "OECD Anti-Bribery Convention Phase 4 Report on New Zealand" is available on the OECD website.
