IBAC reveals corruption threats to Victorian regulators
Victoria’s anti-corruption agency, IBAC, has identified key corruption risks associated with activities undertaken by the state’s regulatory authorities in a new report.
A regulatory authority is a public body that supervises a particular industry or business activity. This supervision can include powers in relation to inspection, licensing, accreditation, advice, or standards monitoring and enforcement.
IBAC’s research report, Corruption risks associated with public regulatory authorities, provides an overview of corruption risks associated with regulatory authorities in Victoria. It explores the key vulnerabilities, the factors that drive corruption risks in these authorities, and potential prevention, reporting and detection measures.
IBAC’s Commissioner, the Honourable Robert Redlich QC said ‘Regulatory authorities are responsible for ensuring the proper delivery of vital services in Victoria that impact on our safety and the good running of the State including undertaking inspections and licensing for firearms, overseeing building regulations, ensuring the safety of energy services, and the regulation of gambling and liquor activities.’
‘Effective regulatory oversight requires the regulator to impartially and rigorously review the activities of the regulated entities. Corrupt behaviour can undermine the integrity and effectiveness of regulatory systems. It has implications for public safety, fair competition between regulated entities, and for confidence in the fairness of public sector decisions,’ Mr Redlich said.
‘The diversity of regulatory authorities and activities in Victoria presents unique corruption risks. Responsibility for inspections and licensing, combined with high levels of discretion in some decision making and access to sensitive information, provide opportunities for corruption to occur.’
IBAC has identified certain corruption risks that are particularly relevant to regulatory authorities and other agencies with regulatory functions. These risks include: failure to identify and manage conflict of interest, bribery, and fraudulent reporting.
Key drivers that can increase the corruption risks faced by regulatory authorities include a lack of transparency around public reporting of activities and industry and regulatory capture, the process by which regulatory agencies or their employees inappropriately identify with the interests of the client or the industries they are tasked with regulating.
Other problems include the employment of people with histories of misconduct or corrupt conduct and the targeting of staff by organised crime groups to elicit information.
‘The need for strong integrity measures to be in place around regulation is particularly important given the inherent risks and cost to the community should regulated services or industries be corrupted,’ Mr Redlich said.
‘Regulators are working to better identify and manage these corruption risks and drivers. This report highlights some of the good practice being undertaken, noting additional opportunities for public regulatory authorities to strengthen their corruption resistance.’
The research report on Corruption risks associated with public regulatory authorities has been released as part of IBAC’s role to assist the Victorian public sector to strengthen its capacity to prevent corruption.
As with other research released by IBAC, this report aims to alert the public sector to key issues and risks and to help agencies strengthen their anti-corruption policies, systems and practices. The report was informed by an analysis of IBAC findings from investigations and research as well as consultation with key regulatory and information from other integrity agencies in Victoria and nationally.
