The Australian arm of Transparency International has taken a stand against the trend towards light-touch regulation and sounded the alarm over the Morrison government’s plans to speed up environmental approvals for major mining and infrastructure projects.
Several years’ worth of research indicates Morrison’s proposed changes to environmental protections will increase the risk of corruption, according to Transparency International Australia chief executive Serena Lillywhite.
“TIA has engaged in a major, multi-year analysis of precisely this issue — how approvals are granted for mining projects,” she said. “We have found a number of gaps in this process that enable corruption to occur. One of the key corruption risks is exactly what the Prime Minister now wants to ‘fast track’ — the environmental impact assessment.”
For all public servants, the government’s fears of holding back the economy through regulation have inspired a new round of changes to the regulatory impact analysis framework that take effect from March 2020. The Assistant Minister to the PM, Ben Morton, has tried to explain the problems these changes are supposed to address using fictional scenarios involving departments that do not exist.
“Our position should always be not to regulate, but where we must we need to ensure high-quality and rigorous analysis equips us with the best possible information to support decision making,” Morton said in a statement.
Ever since the 2013 election, successive Coalition governments have spent a lot of time telling the community of the evils of government regulation and promised to reduce the footprint of its bureaucrats and their rule-books in the economy.
Federal ministers have regularly and repeatedly echoed industry lobbyists in arguing the case that understanding and following all the rules and regulations is a major burden on business owners and holds back the economic benefits their investments can deliver. Such rules and regulations are disparaged by ministers as red tape, green tape, or more recently as unnecessary “congestion” created by public servants.
The other side of the coin is that much of the so-called red tape forms a thin red line between the public and private interests in society.
Federal auditor-general Grant Hehir believes the pendulum is swinging back to more active regulation both inside governments, where he plies his trade, and in the wider economy. He thinks the idea of risk-based regulation — where the enforcers aim to keep their compliance activities in proportion to the risks being managed — actually led to “either light-touch or no-touch regulation” in too many cases and has largely failed after several decades.
Mining projects and other massive infrastructure developments involving huge amounts of private capital are especially corruption-prone, Lilywhite points out. This is due to the scale and complexity of these big deals, which involve a constellation of contractors and sub-contractors orbiting the main proponents, and the backing of very powerful industry groups with a lot of lobbying power.
“It’s essential that the approvals process is rigorous, transparent and accountable to ensure they deliver the best returns for the Australian public, with as little adverse impact on the environment and the local community as possible,” argues the TIA chief.
“That’s what our rules are for — to protect the public’s best interest and our natural environment from corruption and exploitation.
“Our research into the mining sector in Queensland has highlighted lack of independent verification of environmental impact assessments as a key corruption loophole. Without independent scientific verification of the environmental impact assessment, how can the community know for sure that the environment will be adequately protected and taxpayer funds well spent?”
Transparency International endorses the idea of approval processes that “are easy to follow, transparent and fair” but Lilywhite disputes the idea that they should be judged by how long they take. There is a point at which more haste can only come at the expense of integrity, she notes.
“It takes time to conduct checks, to make sure that applicants’ claims are correct and to conduct due diligence verification of the applicants’ integrity, character and track record. A good process is a smart mix of rigour and transparency.
“Without these checks, a ‘fast-tracked’ process becomes a shoddy process. The larger the project the greater the risk – of damaged environments, wasted funds, disappeared tax revenue and harm to local communities.”