Businesses failing to engage on trust and transparency, says Snively

New Zealand companies are failing to capitalise on the country’s reputation for being open and transparent, even though it’s a genuine competitive advantage – unlike our ‘100% Pure’ brand.

That was the verdict of Suzanne Snively, the executive chair of Transparency International, speaking at a panel session organised by the Institute for Governance and Policy Studies and the Institute of Public Administration New Zealand.

Snively was speaking ahead of the May 8 launch of the findings of the Integrity Plus assessment, an in-depth examination of just how open, transparent and free of corruption New Zealand really is.

Citing New Zealand’s international reputation for having little corruption, she said: “There are a lot of competitive advantages we trade on, including 100% Pure. This one is true.”

Snively said there were seven key economic advantages of being seen as ethical and corruption-free: a good reputation, a low cost of doing business, a low cost of capital, easier access to overseas markets, the higher return on capital achieved by ethical businesses, the greater appeal to staff of working somewhere ethical, and greater customer satisfaction.

But while it was “amazingly easy” to work with public organisations in this area, it was “very challenging to build some sort of partnerships with the private sector – and yet if anybody has anything to gain from this, it’s the private sector.”

Noting that New Zealand’s economy had once relied on money “coming to us” from Britain, she added: “We have been eating our tail for the last 40 years … The reality is that it doesn’t come to us anymore, so things like being good at compliance and managing costs are not enough. We have to think about making our assets work better for us and here we have a real asset.”

The public sector had become “lean and mean so that the private sector can pick up the slack”, she said, adding: “Well, they damn well better start picking up the slack!”

Snively also warned that New Zealand was increasingly trading with more corrupt countries such as China: “New Zealand’s trading markets are changing from the less corrupt countries in Europe and North America to more corrupt ones.”

China coveted New Zealand’s marine zone, the seventh largest in the world, Snively added. “We want to do business with them, but they need to do it on our terms, and this [an integrity assessment] helps us define those terms.”

Liz Brown, the Integrity Plus project manager, agreed that there was “a real danger of importing corruption”.

However, the project team had had to go beyond standard assessments of corruption and devise its own, more stringent assessment for New Zealand, because there is a common perception that “we quite simply aren’t corrupt enough” to register on the standard versions, she said.

The project’s aim had been to “dig a bit deeper” and examine New Zealand’s institutions, laws and processes to see if the examples of corruption played out in the media were “the tip of the iceberg” or not, and to investigate the different forms that corruption may take in New Zealand.

Asked about the recent furore over the appointment of GCSB head Ian Fletcher, Brown said: “We’re revising our reports almost daily … There has been a good deal of discussion between us on precisely the appointments process.”

Helen Sutch, the chair of the project’s research advisory board, noted that good governance had both economic and social virtues. It supported social cohesion in an increasingly diverse society and fostered public trust in institutions – and trust “clearly” had an economic benefit.

For example, if people trusted the IRD, then compliance in filing tax returns was high, returns were filled in accurately and fewer inspectors were needed. The result was greater revenue, fewer administrative costs and lower transaction costs for IRD and taxpayer.

“Good governance fosters a high trust society and economy,” Sutch said.

Asked whether there had been an erosion of trust in institutions in recent years, Sutch said: “Those issues are going to come up very strongly [in the Integrity Plus report].” Tax statistics showed that normal levels of compliance might already have been eroded, she added.

Summing up New Zealand’s international reputation as being a low-corruption country, she said: “It isn’t that we’re the best. We’re the least worst.”

• For more details on the May 8 launch, see: http://igps.victoria.ac.nz/events/Upcoming%20events/index.html