Countries to Australia’s north and Australian miners operating in the region have been warned they must move to entrench anti-bribery processes as part of their corporate culture. This would present a particular challenge when operating in a region where perceptions of bribery and corruption are strong – but failure to do so would impact the region’s future ability to attract much needed investment dollars to exploit the Asia Pacific’s under-explored minerals resources.

Addressing the first day in Perth today of the 2007 Paydirt Asia Pacific DownUnder Conference, a partner in Australian law firm, Allens Arthur Robinson, Gerard Woods, said companies operating in the region needed to more broadly adopt anti-bribery measures to mitigate emerging risks to their businesses.

Mr Woods said the most recent global survey of 11,000 executives from 125 countries, found that while Australia was perceived as being among the least corrupt in the world, there was a strong perception of corruption in Asia Pacific countries. “Asia Pacific countries ranked in the lowest or second lowest categories,” Woods said. “This presents a real quandary for Australian mining companies operating in the quarter, as how can their operations be seen as ethical and transparent when the region they operate in, is not?”

“This generates financing and investor implications for these Australian companies as there are investment funds – a strong source of exploration and mine project capital – which make their investment decisions based on anti-bribery ethics and programs.” Woods also pointed out that while perceptions about Australia’s low level of corruption levels were sound, only half of Australia’s Top 100 ASX-listed companies had anti-bribery polices in place. “Some of this lag will be progressively addressed from early next year under new ASX principles for corporate governance, particularly those applying to business courtesies, facilitation payments and commissions,” he explained

Woods added that while no foreign bribery charges had been laid against Australian company executives by authorities, there were a number of ongoing investigations by the Australian Federal Police. “Our authorities are keen to demonstrate a high level of vigour in such investigations, particularly as more and more Australian companies are increasingly active in the Asia Pacific in merger and acquisition activity.”

He advised Australian corporates that any payments to foreign officials requires careful consideration and can involve finely balanced questions of judgment. “It needs commonsense – and the application of the ‘front page newspaper test’. How comfortable would you as an executive be in front of your investors, your bankers and stakeholders, if your company’s dealings with foreign officials appear as front page national news.”