Executive Summary / Key Takeaways
Australia’s ‘green and gold decade’ of major sporting events, and in particular the main event of the 2032 Brisbane Olympic and Paralympic Games (Brisbane 2032), promises significant opportunities and benefits. With the opportunity to host Brisbane 2032 comes the potential for increased sports diplomacy, boosts to local economies and tourism, upgrades to and development of infrastructure and long-term benefits to communities.
However, the significant financial benefits associated with hosting Brisbane 2032 bring with them a high risk of corruption. History shows that Olympic and Paralympic Games can be remembered for corruption scandals more than sporting brilliance. This risk is realised from the moment a city secures the hosting bid and will linger until after the closing ceremony. It can involve numerous forms of improper conduct ranging from bribery to cartel conduct and fraud.
In this insight, we explore the history of previous Olympic corruption scandals and international efforts to prevent corruption in sport, key corruption risks for Brisbane 2032 with a focus on procurement and infrastructure, and what your business can do to ensure compliance with Australia’s anti-corruption laws.
Corruption and the Olympics: familiar territory
Historic scandals
Most, if not all, Olympic and Paralympic Games held in the twenty-first century have been marred by allegations or actual findings of corruption. See the timeline below for some of the major corruption allegations and scandals that have impacted recent Games.
Lessons from Games past
What do these examples of alleged or actual corruption from previous Games show us?
- corruption risks extend well beyond the construction phase to sponsorship, marketing, hospitality, advisory and agency arrangements;
- there is clear historical precedent for officials, whether Games officials or local officials, taking bribes and facilitating bid-rigging;
- transparency is key to avoid conflicts of interest and protect procurement processes from bid-rigging and kickbacks;
- time pressure and shortcuts commonly associated with major sporting events exacerbate corruption risks, particularly in the construction space; and
- penalties for corruption associated with major sporting events are significant, and reputational damage persists for years to come.
Partially in response to historic scandals, there is now a comprehensive framework of international agreements and organisations to minimise corruption risks associated with sport, including:
- the United Nations Convention Against Corruption, the only legally binding international treaty against corruption;
- the G20 High-Level Principles on Tackling Corruption in Sport;
- the United Nations Office on Drugs and Crime (UNODC), which is responsible for the Programme on Safeguarding Sport from Corruption and Economic Crime;
- the International Partnership Against Corruption in Sport, a partnership of various organisations, governments and stakeholders created in 2017 to tackle corruption in sport. Recent activities include the creation of a working group to examine the potential risks and benefits of AI when it comes to corruption in sport; and
- the Ethics Commission of the International Olympic Committee (IOC), which progresses the IOC’s ethical framework and investigates potential breaches。
The domestic legislative framework: overview
On a domestic level, there is a comprehensive legislative framework that applies to bribery and corruption in Australia. Companies seeking to be involved in Brisbane 2032 must have a strong understanding of their obligations and potential exposure under this framework.
Companies should also be aware of anti-corruption laws in overseas jurisdictions relevant to their operations or the operations of their subsidiaries, agents and sub-contractors. This is key for companies involved in infrastructure and other services for Brisbane 2032 who will be obtaining goods or services from overseas sub-contractors and suppliers.
Commonwealth Legal Framework
Bribery
At a federal level, the Criminal Code (Cth) contains offences which apply to both individuals and companies and domestic and foreign bribery. Generally, conduct amounts to bribery under the Criminal Code (Cth) when a benefit is offered or provided to another person with the intention of improperly influencing them in some way. These offences include:
- bribery of a foreign public official;
- bribery of a Commonwealth public official;
- the giving or receiving of a corrupting benefit to influence a Commonwealth public official; and
- concealment through false accounting documents.
In 2024, a new corporate offence of failing to prevent foreign bribery by an associate was introduced to the Criminal Code (Cth). Companies can only avoid being held liable under this offence by showing they had ‘adequate procedures’ in place to prevent their associates from engaging in foreign bribery.
The Criminal Code (Cth) has extra-territorial reach: offending conduct can occur in Australia or overseas. The penalties are also significant, including up to 10 years’ imprisonment for individuals (or 5 years for the corrupting benefit offence) and large fines for companies.
Cartel Conduct
Cartel conduct, which is a key risk for Brisbane 2032, is prohibited by the Competition and Consumer Act 2010 (Cth) (CCA). The CCA defines cartel provisions as provisions in contracts, arrangements or understandings between competitors which have the purpose or effect of:
- price fixing: an agreement between competitors that has the effect of deliberately manipulating pricing to remove competition ;
- market sharing: an agreement between competitors to share the market, for example by allocating specific customers or geographic areas to each other;
- controlling output: an agreement between competitors to limit goods or services to manipulate prices; or
- bid-rigging: an agreement between competitors regarding the outcome and pricing of tenders.
The CCA imposes criminal offences and civil penalty provisions for a company which:
- makes a contract or arrangement, or arrives at an understanding, with a cartel provision; or
- gives effect to a cartel provision.
Scandals from past Games demonstrate that cartel conduct is one of the most prolific forms of corruption that can arise in the lead up to Games.
Corporations Act
The Corporations Act also contains relevant provisions regarding directors’ duties and criminal offences for misconduct. For example, it creates criminal offences for directors, company officers and employees (in the case of (b) and (c) below) who:
- are reckless or intentionally dishonest and fail to act in good faith in the best interests of the company and for a proper purpose;
- use their position dishonestly; or
- use information dishonestly.
State and Territory Legal Frameworks
State and Territory laws also have comprehensive anti-corruption laws which criminalise bribery and corruption in both the public and private sectors. Each State and Territory also has special-purpose corruption legislation and investigative bodies.
Particularly relevant for Brisbane 2032, in Queensland the Crime and Corruption Act 2001 (Qld) defines two types of corrupt conduct which must be either a criminal offence or serious enough to result in termination:
- Public officer corrupt conduct: broadly, corrupt conduct which could or does affect a unit of public administration (UPA) or a public office holder so that the performance of their functions or exercise of their powers is not honest or impartial, breaches public trust or misuses certain information connected to the UPA/office holder.
- Public confidence corrupt conduct: broadly, corrupt conduct which impairs or could impair public confidence in public administration, such as collusive tendering.
Conduct can be corrupt regardless of the location where it occurs.
The Criminal Code (Qld) also includes offences for:
- Official corruption: this applies to public service employees/public office holders who attempt to or receive any property or benefit corruptly, to do or not do something in connection with their official functions. It also applies to third parties who attempt to give or give the property or benefit to the public service employee/public office holder.
- Secret commissions: broadly, when an agent or employee receives a financial benefit for the purpose of influencing their actions, without the knowledge of their employer or client.
What role do regulators play?
Earlier this year, the Federal Court imposed the highest penalty to date for a breach of the Competition and Consumer Act (Cth) by an individual. The individual was the CEO, and subsequently Executive Chairman, of a company which attempted to engage in cartel conduct relating to the supply of upstream CSG services.
The penalty was handed down following proceedings brought by the ACCC. The Court found that the company and the Executive Chairman had on five occasions attempted to induce supplier competitors to enter into contracts, arrangements or understandings which contained cartel provisions. For example, on one occasion the Executive Chairman attempted to agree an arrangement where its competitor would not bid for a tender in return for the company not seeking certain work from one of the competitor’s customers.
The Court ordered the company to pay pecuniary penalties in the amount of $5 million and the company’s Executive Chairman, who was largely responsible for the attempts at cartel conduct, to pay $1 million with a non-indemnification order.
Summary: what powers do regulators have in relation to corrupt conduct?
It is important to understand the role played by key regulators in the corruption space. The table below demonstrates that regulators have extensive powers to investigate corruption and are already taking targeted action in preparation for Brisbane 2032.
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Australian Competition & Consumer Commission (ACCC)
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National Anti-Corruption Commission (NACC)
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Crime and Corruption Commission (CCC)
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Establishment
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Independent Commonwealth statutory authority established pursuant to the Competition and Consumer Act 2010 (Cth) |
Independent Commonwealth agency established pursuant to the National Anti‑Corruption Commission Act 2022 (Cth) |
Independent Queensland statutory body established pursuant to the Crime and Corruption Act 2001 (Qld) |
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Jurisdiction
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Enforces the Competition and Consumer Act 2010 (Cth), including by investigating cartel conduct, including price fixing, bid-rigging, market sharing and controlling output. |
Only investigates allegations of serious or systemic corrupt conduct in the Commonwealth public sector (including current and former public officials, or any person that adversely affects a public official’s honest or impartial exercise of powers or performance of functions or duties). |
Investigates public sector matters, or private sector matters which arise from dealings with the public sector. This includes public sector employees and local and State government politicians, in addition to any person whose conduct is believed to affect the performance of a public agency. |
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Powers
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Broad investigative powers, allowing it to compel production of documents or oral evidence, search warrants to conduct ‘dawn raids’, civil proceedings targeting cartel activity, and surveillance powers in partnership with the Australian Federal Police (AFP). |
Broad investigative powers, including powers to compel production of documents, enter certain places without a search warrant, and to hold hearings (generally in private) and summonses persons to give evidence under oath. |
Extraordinary powers which allow it to compel production of documents and other evidence, use search and surveillance warrants to seize evidence, hold ‘coercive hearings’, and detain and punish witnesses for contempt. |
In 2022, four people were sentenced under the Competition and Consumer Act 2010 (Cth) for price fixing following extensive work by both the AFP and the ACCC. The cartel conduct in this case was carried out by a money remittance company across NSW and Victoria.
The successful prosecutions resulted from Operation EUPORIE, an investigative collaboration between the AFP and the ACCC which commenced in 2014. The four people involved were each sentenced to a term of imprisonment, which was wholly suspended, and the Company was fined $1 million.
What can businesses do to mitigate corruption risks in the lead up to Brisbane 2032?
High Risk Features – Infrastructure phase
Looking to the most significant aspect of preparation for Brisbane 2032, the procurement and infrastructure phase, there are some key features of this phase, namely scale, cost and a fast-tracked approval process, which carry a heightened risk of corruption, namely:
Cost: the Commonwealth and Queensland governments have allocated a combined total of $7.1 billion to the Games Venue Infrastructure Program, the sheer volume of which presents widespread opportunities for corruption.
Scale: plans to build and upgrade infrastructure in preparation for Brisbane 2032 are also extensive and include:
- a new sports and entertainment precinct at Victoria Park;
- upgrades to existing infrastructure including the Queensland Tennis Centre and transformations;
- development of new sporting infrastructure, including a new National Aquatic Centre;
- upgrades to develop the Brisbane Athletes Village; and
- upgrades to existing sports infrastructure in regional Queensland.
Fast-tracked approvals process: Queensland has also implemented a process for streamlined planning and delivery of key infrastructure, with the Games Independent Infrastructure and Coordination Authority (GIICA) being established to deliver 17 venues for Brisbane 2032.
Essential Do’s and Don’ts
To mitigate corruption risks across the life cycle of Brisbane 2032, companies should carefully consider the below safeguards:
- Robust internal policies are essential: companies require detailed and effective anti-bribery and corruption policies which are reviewed on an ongoing basis. Companies involved in procurement and infrastructure for Brisbane 2032 should develop project-specific policies for an added layer of protection.
- Contractual controls are the foundation: companies must ensure that their contracts with third parties and intermediaries contain adequate protections, including anti-bribery warranties, rights to audit records and reporting requirements.
- Set the tone from the top: senior management is responsible for establishing and maintaining company culture, particularly when it comes to a culture of compliance.
- Avoid conflicts of interest: carefully consider activities which may create risks of a potential or actual conflict of interest, such as donations, gifts and fundraising.
- Do not discuss pricing with competitors: companies must avoid behaviours that carry a risk of engaging in cartel conduct.
- Record keeping is key: records can either acquit or convict. Companies should comprehensively document decision-making, providing clear details of the decision made and the reasons for it, which will be relevant to any regulator investigations. Companies should also maintain registers and records detailing gifts, conflicts, third-party approvals, due diligence, bid submissions, pricing decisions and whistleblower matters.
- Due diligence is a must: companies should have a clear and established due diligence process for third parties to identify any red flags for bribery and corruption.
- Whistle-blower mechanisms: it is important to have a confidential and accessible reporting mechanism for employees to report suspicious activity, coupled with an effective process for appropriately assessing those reports.
- Knowledge is power: internal training is key. Companies should provide regular training to management and all employees regarding the law on bribery and corruption generally and the Company’s own policies and procedures.
