Music intro
INTERVIEWER: Hello, and welcome to the latest IBAC podcast. Today we are talking with Professor Adam Graycar, one of Australia's most experienced leaders in social science research. His current work focusses on integrity and corruption prevention in Australia and internationally. He works closely with international agencies such as the United Nations and the World Bank. His latest book is Understanding and Preventing Corruption.
Good morning Professor Graycar.
DR ADAM GRAYCAR: Good morning.
INTERVIEWER: Professor Graycar, can you summarise your research into public policy, particularly in relation to integrity and corruption prevention?
DR ADAM GRAYCAR: There's a lot of corruption research, and particularly procurement corruption research, internationally is in the development space, in the countries that are developing and have major resources or new found wealth and massive poverty. Most of that research is about strengthening institutions or even getting basic legislative codes in place, because in many of these countries things are rotten. They're pretty crook. They don’t work very well.
But that’s not the story here in Australia. That’s not the story in Victoria. Our institutions are okay. They work well but, from time to time, we do have problems, we do have transgressions, and we have to know how to deal with them. People often tell me how lucky I am living in Australia where we don’t have much corruption, but the thing is, when it does rear its head, when it does undermine our public policy, we are monumentally outraged by this. The things that outrage us, in many other countries wouldn’t even raise an eyebrow.
One of the pieces of research I'm doing is with Professor A J Brown of Griffith University. We've got a project trying to map Australia's integrity systems. This is going to involve understanding the operations of our integrity systems, the whole of the integrity landscape and how that ties in to public policy. Another part of my research involves examining corruption in procurement and classifying and developing preventive measures in that space.
INTERVIEWER: How does corruption undermine good governance?
DR ADAM GRAYCAR: Well, two manifestations of corruption: first, there's corruption in the making of the law, and then there's corruption in the implementation of the law. On the making of the law side we find that if our politicians, for example, are compromised so that they favour vested interests or they’re beholden to political party donors, then we don’t get the laws that we deserve and we don’t get the evidence based policies.
On the other hand, in implementing the laws, if our public servants who deliver the programs and implement the policy are compromised in any way, or behave unethically or corruptly, then all the good legislation, all the good policy work is just undone. When we look at the big picture we know that corruption can hamper economic development. It can reduce taxation revenue. It can diminish the quality of services. It can distort natural resource directions and so on.
These aren’t the biggest issues in Australia, but corruption does diminish confidence. If we look at the IBAC reports, there was one on both ICAC New South Wales, and IBAC did a report on procurement and found that contractors in some cases are unwilling to bid for projects. If that happens, that undermines the integrity of the system.
INTERVIEWER: What red flags can senior leaders look out for that might indicate misconduct and corruption in public administration?
DR ADAM GRAYCAR: Well, senior leaders have to set the tone and they have to set the culture. They have to know the business of the agency and they know how that can be delivered with integrity. They’ve got to know about the things that threaten integrity. Now, senior leaders just can't examine every invoice and they can't know where every staff member is at any particular time, so they’ve got to have good people who can manage the functions and people who aren’t afraid to bring to the attention of the leaders if there are transgressions.
Then, within the agency, the leaders need to have a pretty good understanding of the things that undermine and threaten that integrity, things like peer culture: ‘oh, don’t worry about the rules, we've always done it this way’. Or people within an organisation who deny responsibility, deny accountability, or who are too rigid. [or] And rigidity is a very important thing because when things are very, very rigid they're very, very brittle and they break easily.
Sometimes you have dominant informal actors who bully or push their way through, or where there isn’t enough diversity or silence. All of these things come together, and the leader needs to be attuned to these. The leader also needs to have a process to take seriously the concerns that are raised by whistleblowers and to ensure that the whistleblowers aren’t victimised. In the end, if the leader allows these integrity breaches, we do have an undermining of institutional legitimacy, the ethics are subverted, powers abused and, in the end, we have a trashing of public value, and nobody wants that.
INTERVIEWER: What sorts of strategies to identify corruption and misconduct have you identified as being the most effective?
DR ADAM GRAYCAR: Well, the first thing is to look at some of the lists that are around. IBAC's published a very nice list of red flags to look out for in identifying corruption in procurement.
We need rules and processes, but you can't make a rule for every possible scenario. If you did you'd be tied up - everybody would be tied up - in red tape, and people would spend more time trying to work out how to work around the rules. Having rules and values together is the ideal. You need some rules but, ideally, fewer rules and more values. That’s where we ought to be aiming to, but it's not all that easy.
INTERVIEWER: From a prevention perspective, what do you consider to be the most important steps that agencies can take to lower corruption risks?
DR ADAM GRAYCAR: If we think of a corrupt event, there are three ingredients to any corrupt event. One of them is a motivated offender - somebody's going to do the wrong thing, second is a target they're going to go at and, thirdly, is what you might call the absence of a capable guardian. If you remove any one of these three - if there's no offender or no target or there is a strong guardian - then you've got no corrupt act.
We need to look - if we start with the offenders, let's start looking at the behaviour patterns. There are red flags; people that are on the make, people who don’t take any leave, people who cut a lot of corners, people who might have potential substance abuse problems or gambling problems or whatever. Now, this isn’t a witch hunt thing, but it'll come up in the way people perform their duties. That’s the offender side of it.
Then, if we look at the targets, we can harden targets with good processes. We can make it harder to commit a corrupt act. We can increase the risk of being caught. We can reduce the rewards. We can remove the excuses. I've done a lot of research on using all of these in different types of environments. When we look at opportunities, we need to look at the opportunities that present themselves because of poor culture or poor rules or inadequate role models.
See, in Government there are basically only five things that people do. They manage money. They manage people. They buy things. They deliver services and they lead. If you start looking at each of those - and each of them present both different opportunities and different control situations, and they all have different preventive processes.
INTERVIEWER: Looking internationally, what corruption prevention issues and challenges are you seeing emerge in other jurisdictions?
DR ADAM GRAYCAR: What we have is a big difference between rich country corruption and poor country corruption. Most of the international work that I'm involved in is in the development arena in countries that have very poor people and poor processes. In the poorer countries there are often no rules, or rules that are so rarely enforced, but in rich countries we have all the rules. Where we have a problem is when these rules are skilfully evaded, often by very, very respectable people, manipulated and evaded.
In rich countries people don’t bribe blatantly. In the northern European countries, western European countries, Australia, New Zealand, bribes aren’t what it's all about, but they use wealth to gain access or to trade in influence, and they set things up through lobbying and political donations, and they share the spoils through contracts and so on. Researching this is very, very hard because it's harder to work effectively on this sort of stuff than it is, say, to write a procurement code to say these are the six red flags you ought to look out for. It's about process.
While every place is very different, there have been some stunning examples of success in places like Uruguay, Rwanda, Georgia, Estonia, Macedonia. These have moved from being very, very corrupt to considerably less corrupt, though from time to time there have been slippages. In the research there are two ways of doing it. You look at the direct approaches - the establishment of anti-corruption agencies, the penalties and so on - and the indirect approaches that, essentially, involve strengthening institutions.
This is what we're doing in Australia. I have a research project with Professor A J Brown from Griffith University. We're doing a study in which we're mapping our integrity systems. Understanding integrity systems nationally is a very important way to go. Transparency International, the global NGO, has done what they call national integrity system assessments. Understanding how strong the institutions are will then blend in with my work on the slippage points in organisations.
INTERVIEWER: Can you tell us a little about the latest academic research on public sector procurement risks and vulnerabilities?
DR ADAM GRAYCAR: Procurement is one part of the whole corruption landscape. There are a lot of reports out there on how to spot problems, how to set up systems to identify red flags, how to do good processes. The IBAC red flags paper that I mentioned before is one really excellent example, but there are much lengthier ones from the World Bank and the OECD and various United Nations agencies and Transparency International and so on.
In my work I'm trying to better understand the dynamics of corruption in procurement. What I've done is I've put together dozens of Australian and international cases in which I'm trying to classify the characteristics of the procurement event: who initiated, what sort of person was involved, what sectors were the most vulnerable, what was lost, what opportunities there were, and then what preventive mechanisms can you put in place. Some sectors are more vulnerable than others.
The transport sector, it seems, has been the most vulnerable in procurement, but then there's a lot of equipment. There's a lot of things that are bought and sold. Some human services areas - education in particular - has also been vulnerable. What we've got, when we do the research on procurement, is different procurement types. There are the standard things like pencils and laptops and so on. There are customised things like vehicles that have to be customised as police vehicles or ambulance vehicles, or IT systems that have to be customised. There are major infrastructure issues, and there are also some very intangible things like consultancy services and research services.
In my research I want to move beyond the red flags, which are the starting point, to the dynamics of each of these and the slippage points. Getting the data can be very, very hard because we only know about the cases that have been caught. We don’t know about all those that aren’t caught. By and large, if we have a better understanding of the dynamics and the events, we can do okay. It's a complex area. All the red flag documents are very, very helpful. Adding some understanding of the dynamics will give us a better picture to understand procurement. If we understand corruption in procurement, we can also better understand corruption in our society.
INTERVIEWER: Professor Graycar, thank you so much for your time today.
DR ADAM GRAYCAR: My pleasure.
INTERVIEWER: And thank you for listening. To hear more IBAC podcasts visit our website at www.ibac.vic.gov.au. Also subscribe to IBAC Insights on the website to get the latest news and events, heads up on new reports, expert commentary, early research findings and information on conferences and events.
