July 17, 2025 • 11 mins
There is so much disruption in the global economy at the moment, that it is easy to lose sight of other business risks.
One such risk is corruption, or as our guest today puts it, the “C” in ESG.
Maurice Burke, Managing Director (investigations, diligence and compliance) at Kroll, talks to Sean about why corruption is becoming a growing risk for global businesses.
Find out more: https://fearandgreed.com.au
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
Welcome to the Fear and Greed Daily Interview. I'm sure, almam.
There is so much disruption in the global economy at
the moment thanks to US trade policy, wars in the
Middle Eastern Europe, and uncertainty around Chinese ambitions, among others,
that it's easy to lose sight of other business risks.
One such risk is corruption, or, as our guest today
(00:27):
puts it, the c in ESG. Morris burg is. He
Managing Director Investigations, Diligence and Compliance at Kroll Krouble La
Strategic Consultancy, focusing in part on enterprise risk. He argues
coruption is becoming a growing problem for global businesses. Maurice,
Welcome to Fear and Greed.
Speaker 2 (00:45):
Thank you.
Speaker 1 (00:46):
Sean. Generally, broadly, is corruption more of a problem now
than it has been previously?
Speaker 2 (00:54):
So I think the short answer is no.
Speaker 3 (00:58):
In that I think, you know, I would say it's
always been a problem, and that in sort of relative terms,
it's not that corruption per ses growing as a problem
in the global economy.
Speaker 2 (01:09):
But I think it is interesting when we talk about
regulative risk and compliance pressures that businesses face as to
whether it's it's somewhat taking a back seat in terms
of where businesses are parking their compliance resources. And it's
also interesting to answer your question by reference to you know,
(01:31):
is this a problem in Australia. Is it a domestic
issue for Australian businesses? And I think that the honest
answer again is no, that's not a growing issue. Corruption
is an everyday reality and Australia is not corruption free.
But the real problem kicks in when Australian businesses go
offshore into jurisdictions where corruption is far more of an
(01:51):
everyday reality and a threat. And that's when Australian businesses
tend to trip up where they're in these high risk environments.
Speaker 1 (02:00):
Okay, so let's then get a definition of corruption, and
then we might look at a few in certainly the
mining companies at different times. There's stories about what's happening
when they're in different jurisdictions. But what is what is corruption?
Speaker 2 (02:15):
So look, essentially, it's providing some kind of benefit to
a government official or accounter party. Yeah, on a sort
of confidential basis, to gain some sort of advantage, right,
I mean that's the kind of water down version of
most regulatory definitions of corruption. So it's it's paying a
government official to issue a license to you. It's paying
(02:39):
a significant amount of money to a company that's put
out a tender for a construction project. It's paying a
small amount of money to a customs official to allow
your goods to come through. Now the sort of traditional examples,
if you like, but corruption gets much more in citios.
And then maybe this is you know where risk grows,
particularly for Australian companies operating offshore. You know, we see
(03:01):
corruption happening in circumstances where garments clothes are being made
in factories in South Asia and bribes are being paid
to factory inspectors to turn a blind eye to human
slavery issues, you know, underage workers and terrible working conditions.
That's the hidden sea in an ESG issue. So that's
(03:21):
corruption that's threatening human lives but feeding through to the
consumption of a product like garments in Australia. They did
an investigation in South Asia where a factory manufacturing electronics
goods couldn't understand why there was such a high risk
of serious fatalities and injuries in the workplace, and they
again and again checked their equipment to discover that it
(03:42):
was all in perfectly good order until they realized that
the Human Resources Department were taking bribes to hire people
who were illiterate despite the requirement for a certain degree
of literacy, and so these people couldn't read any of
the safety warnings on equipment corruption, endangering lives and causing problems.
(04:03):
And again, when you talk about insidious coruption, if you're
paying government regulatory bodies in the construction space to ignore
the quality of construction, you're putting economies in jeopardy. You're
putting people in jeopardy, you know, and a lot of
money is lost when buildings are built badly.
Speaker 1 (04:23):
Okay, So I mean the cost of this then is
as bad as human life, literally.
Speaker 2 (04:28):
It can be, you know. And this is this is
why we, you know, engage in very closely with clients
who it's it's it's simplistic to say have been distracted
by the E and the S in ees G. Because
these are these are important things, you know, saving the
planet and protecting people our critical objectives as well. But
(04:50):
there's a lot of businesses who have said, right, well,
let's focus on our environmental footprint and ensuring that we're
you know, we're not damaging the environment in the places
where we operate. Le's look at modern slavery. Let's make
sure that all our workers are looked after and businesses
have finite compliance, real resources, you know, and that often
we see that businesses are distracting their compliance people away
(05:12):
from you know, a traditional pursuit of corruption and looking
at fraud and are now worried about these issues. And
that's that's causing you know, something of a vacuum if
you like, where corruption issues are on the rise.
Speaker 1 (05:25):
Stay with you, Marris. We'll be back in a moment.
I'm speaking to Marris Burke from Kroll. Before the break.
You said that corruptions on the rise in some areas,
it will presume you're talking about in some is it geographies,
is it sectors? Where is it that we've really got
(05:47):
to keep an eye out for.
Speaker 2 (05:49):
So as global business gets more complex, opportunities for corruption grow.
You know, I've been looking at, for example, Southeast Asian
corruption issues in countries like Indonesia and Vietnam, who are
both fighting corruption. But you know, there was a time
when senior local officials would say, look, in the old days,
(06:09):
coruption was pretty simple. You just paid a bribe to
the central government. Now it's more complicated. We have different ministries,
we have different regulators. You know, exactly who should get
paid is not always immediately be parent. So that side
has got more complicated. But economies grow, you know, looking
at Indonesia or Vietnam, these are fantastically prosperous economies. The
(06:30):
bigger and economy grows, the more opportunity there is for
fraud and corruption.
Speaker 1 (06:34):
Does Australian governments and regulators do enough around this area?
Speaker 2 (06:40):
So certainly domestically, you know, we are lucky. Australia's standing
has and there are various sort of scores that you
can reference. Often you have to be a little bit
cautious about about how they're ranking countries in terms of
corruption risk. But Australia has as essentially always stayed within
the top ten globally of sort of low risk environments
(07:03):
for corruption purposes. And you have to you have to
credit a good corporate culture, you have to credit law enforcement,
You have to look at the efforts on shore that
have kept Australia in that environment. But you go straight
to know that's Trans's an organization called Transparency International who
create a corruption Perception index and this is the best
(07:27):
metric out there to judge objective corruption. And you go
from number ten, which is roughly where Australia is, to
I think number fifty or something when it comes to India,
and then eighty eight is Vietnam and ninety nine out
of one hundred and eighty countries, Indonesia is considered pretty
much it's just almost outside the top one hundred. So
(07:50):
these are these are high risk environments. So is Australia
doing enough to protect Australian businesses operating in these markets?
It's certainly created a regular true framework which is designed
to do that. But you can it's it's I don't
need to describe the obvious challenges of police in corruption
in Southeast Asian nations from an Australian perspective. It would
(08:11):
just be an extraordinary strain on resources even if it
was even if it was possible.
Speaker 1 (08:17):
You haven't mentioned cyber yet, now I know. The twenty
twenty five Global Business Sentiment survey from Kroll talks to
twelve hundred senior business leaders across a bunch of countries.
Cyber comes up as a key fear. Is that about
corruption or is that something different?
Speaker 2 (08:31):
No, that's about theft, that's just about it's just about fraud,
the complexity. It's rather our other favorite topic at the moment.
You know, is the world about to fold in on
itself as a result of cyber risk and fraud? And
the answer is really no. But cyber just creates the
opportunity for bad actors to create fraudulent activities faster, bigger
(08:56):
and better and are able to sort of, you know,
find ways to get around protections that companies have historically created.
Is cyber the end of the planet as we understand it?
We don't think so. You know, there was a lot
of rumbles if you start to look back a couple
of decades when online banking became a reality, and it
was a long time before law enforcement and compliance systems
(09:18):
caught up with the risk that online banking created. You know,
we all thought the world was going to fold in
on itself at wait two k. So, yeah, none of
these risks actually knew. It's just the traditional chase between
the bad guys finding faster, better, quicker tools to try
and steal in law enforcement and corporate compliance plane catch up.
(09:40):
And I think that's what we're seeing in the cyberspace.
Speaker 1 (09:42):
And we are out of time, But I can't let
you go without at least mentioning AI, artificial intelligence and
how that fits in to this process. The scary stories
are about AI doing all sorts of things that are
corrupt and we don't want to know about. But I mean,
is that the reality?
Speaker 2 (09:58):
So a I'll give you a short answer to an
extremely complicated question. But often clients come and say, how
are we going to fight AI? You know, how are
we're possibly going to cope with this? And a lot
of the time the answer is a I. You know,
it's not just a tool that the bad codes can deploy.
You know, the best compliance systems we see now, which
(10:19):
are you know, tracking aberrant patterns of behavior or a
normalist kind of financial movements AI driven. So yeah, the
trick is to get in and embrace AIS as an
effective compliance tool and do all of the bits of
pieces associated with that, which is good training, good integration,
you know, constantly monitoring the I AI to make sure
(10:41):
that it's doing what it's supposed to be doing. But
you know, it's it's a better compliance tool that it
is a weapon for fraudsters. So you know, the short
answer is, if you're worried about AI and get a
good AI consultant, al.
Speaker 1 (10:55):
Ris, thanks for talking. If you're ingreed, thank you.
Speaker 2 (10:57):
I was going to add, by the way, just to summarize,
I love the name of the podcast, but I was
I was having a giggle because it seems that when
you're talking about corruption, the problem with corruption is there's
too much greed and not enough fear.
Speaker 1 (11:09):
A very appropriate Well, it's called fear and greed because markets,
of course are driven by fear and greed. Benjamin Graham
said that decades and decades ago, and maybe corruption is
driven by fear and greed too.
Speaker 2 (11:20):
Then well it's driven there. I definitely agreed. Sometimes the
best the best. I lived in Singapore for twenty three years.
The anti corruption fight there is driven by fear after
getting caught, so it's a slightly different enemy. But thank you,
thank you, Sere.
Speaker 1 (11:35):
That was Mauris Berg, Managing director Investigations, Diligence and Compliance
at Kroll. This is the Fear and Greed Business Interview.
Join us every morning for the full episode of Fear
and Greed at Business News. You can use I'm Chanel Mark.
Enjoy today
Welcome to the Fear and Greed Daily Interview. I'm sure, almam.
There is so much disruption in the global economy at
the moment thanks to US trade policy, wars in the
Middle Eastern Europe, and uncertainty around Chinese ambitions, among others,
that it's easy to lose sight of other business risks.
One such risk is corruption, or, as our guest today
(00:27):
puts it, the c in ESG. Morris burg is. He
Managing Director Investigations, Diligence and Compliance at Kroll Krouble La
Strategic Consultancy, focusing in part on enterprise risk. He argues
coruption is becoming a growing problem for global businesses. Maurice,
Welcome to Fear and Greed.
Speaker 2 (00:45):
Thank you.
Speaker 1 (00:46):
Sean. Generally, broadly, is corruption more of a problem now
than it has been previously?
Speaker 2 (00:54):
So I think the short answer is no.
Speaker 3 (00:58):
In that I think, you know, I would say it's
always been a problem, and that in sort of relative terms,
it's not that corruption per ses growing as a problem
in the global economy.
Speaker 2 (01:09):
But I think it is interesting when we talk about
regulative risk and compliance pressures that businesses face as to
whether it's it's somewhat taking a back seat in terms
of where businesses are parking their compliance resources. And it's
also interesting to answer your question by reference to you know,
(01:31):
is this a problem in Australia. Is it a domestic
issue for Australian businesses? And I think that the honest
answer again is no, that's not a growing issue. Corruption
is an everyday reality and Australia is not corruption free.
But the real problem kicks in when Australian businesses go
offshore into jurisdictions where corruption is far more of an
(01:51):
everyday reality and a threat. And that's when Australian businesses
tend to trip up where they're in these high risk environments.
Speaker 1 (02:00):
Okay, so let's then get a definition of corruption, and
then we might look at a few in certainly the
mining companies at different times. There's stories about what's happening
when they're in different jurisdictions. But what is what is corruption?
Speaker 2 (02:15):
So look, essentially, it's providing some kind of benefit to
a government official or accounter party. Yeah, on a sort
of confidential basis, to gain some sort of advantage, right,
I mean that's the kind of water down version of
most regulatory definitions of corruption. So it's it's paying a
government official to issue a license to you. It's paying
(02:39):
a significant amount of money to a company that's put
out a tender for a construction project. It's paying a
small amount of money to a customs official to allow
your goods to come through. Now the sort of traditional examples,
if you like, but corruption gets much more in citios.
And then maybe this is you know where risk grows,
particularly for Australian companies operating offshore. You know, we see
(03:01):
corruption happening in circumstances where garments clothes are being made
in factories in South Asia and bribes are being paid
to factory inspectors to turn a blind eye to human
slavery issues, you know, underage workers and terrible working conditions.
That's the hidden sea in an ESG issue. So that's
(03:21):
corruption that's threatening human lives but feeding through to the
consumption of a product like garments in Australia. They did
an investigation in South Asia where a factory manufacturing electronics
goods couldn't understand why there was such a high risk
of serious fatalities and injuries in the workplace, and they
again and again checked their equipment to discover that it
(03:42):
was all in perfectly good order until they realized that
the Human Resources Department were taking bribes to hire people
who were illiterate despite the requirement for a certain degree
of literacy, and so these people couldn't read any of
the safety warnings on equipment corruption, endangering lives and causing problems.
(04:03):
And again, when you talk about insidious coruption, if you're
paying government regulatory bodies in the construction space to ignore
the quality of construction, you're putting economies in jeopardy. You're
putting people in jeopardy, you know, and a lot of
money is lost when buildings are built badly.
Speaker 1 (04:23):
Okay, So I mean the cost of this then is
as bad as human life, literally.
Speaker 2 (04:28):
It can be, you know. And this is this is
why we, you know, engage in very closely with clients
who it's it's it's simplistic to say have been distracted
by the E and the S in ees G. Because
these are these are important things, you know, saving the
planet and protecting people our critical objectives as well. But
(04:50):
there's a lot of businesses who have said, right, well,
let's focus on our environmental footprint and ensuring that we're
you know, we're not damaging the environment in the places
where we operate. Le's look at modern slavery. Let's make
sure that all our workers are looked after and businesses
have finite compliance, real resources, you know, and that often
we see that businesses are distracting their compliance people away
(05:12):
from you know, a traditional pursuit of corruption and looking
at fraud and are now worried about these issues. And
that's that's causing you know, something of a vacuum if
you like, where corruption issues are on the rise.
Speaker 1 (05:25):
Stay with you, Marris. We'll be back in a moment.
I'm speaking to Marris Burke from Kroll. Before the break.
You said that corruptions on the rise in some areas,
it will presume you're talking about in some is it geographies,
is it sectors? Where is it that we've really got
(05:47):
to keep an eye out for.
Speaker 2 (05:49):
So as global business gets more complex, opportunities for corruption grow.
You know, I've been looking at, for example, Southeast Asian
corruption issues in countries like Indonesia and Vietnam, who are
both fighting corruption. But you know, there was a time
when senior local officials would say, look, in the old days,
(06:09):
coruption was pretty simple. You just paid a bribe to
the central government. Now it's more complicated. We have different ministries,
we have different regulators. You know, exactly who should get
paid is not always immediately be parent. So that side
has got more complicated. But economies grow, you know, looking
at Indonesia or Vietnam, these are fantastically prosperous economies. The
(06:30):
bigger and economy grows, the more opportunity there is for
fraud and corruption.
Speaker 1 (06:34):
Does Australian governments and regulators do enough around this area?
Speaker 2 (06:40):
So certainly domestically, you know, we are lucky. Australia's standing
has and there are various sort of scores that you
can reference. Often you have to be a little bit
cautious about about how they're ranking countries in terms of
corruption risk. But Australia has as essentially always stayed within
the top ten globally of sort of low risk environments
(07:03):
for corruption purposes. And you have to you have to
credit a good corporate culture, you have to credit law enforcement,
You have to look at the efforts on shore that
have kept Australia in that environment. But you go straight
to know that's Trans's an organization called Transparency International who
create a corruption Perception index and this is the best
(07:27):
metric out there to judge objective corruption. And you go
from number ten, which is roughly where Australia is, to
I think number fifty or something when it comes to India,
and then eighty eight is Vietnam and ninety nine out
of one hundred and eighty countries, Indonesia is considered pretty
much it's just almost outside the top one hundred. So
(07:50):
these are these are high risk environments. So is Australia
doing enough to protect Australian businesses operating in these markets?
It's certainly created a regular true framework which is designed
to do that. But you can it's it's I don't
need to describe the obvious challenges of police in corruption
in Southeast Asian nations from an Australian perspective. It would
(08:11):
just be an extraordinary strain on resources even if it
was even if it was possible.
Speaker 1 (08:17):
You haven't mentioned cyber yet, now I know. The twenty
twenty five Global Business Sentiment survey from Kroll talks to
twelve hundred senior business leaders across a bunch of countries.
Cyber comes up as a key fear. Is that about
corruption or is that something different?
Speaker 2 (08:31):
No, that's about theft, that's just about it's just about fraud,
the complexity. It's rather our other favorite topic at the moment.
You know, is the world about to fold in on
itself as a result of cyber risk and fraud? And
the answer is really no. But cyber just creates the
opportunity for bad actors to create fraudulent activities faster, bigger
(08:56):
and better and are able to sort of, you know,
find ways to get around protections that companies have historically created.
Is cyber the end of the planet as we understand it?
We don't think so. You know, there was a lot
of rumbles if you start to look back a couple
of decades when online banking became a reality, and it
was a long time before law enforcement and compliance systems
(09:18):
caught up with the risk that online banking created. You know,
we all thought the world was going to fold in
on itself at wait two k. So, yeah, none of
these risks actually knew. It's just the traditional chase between
the bad guys finding faster, better, quicker tools to try
and steal in law enforcement and corporate compliance plane catch up.
(09:40):
And I think that's what we're seeing in the cyberspace.
Speaker 1 (09:42):
And we are out of time, But I can't let
you go without at least mentioning AI, artificial intelligence and
how that fits in to this process. The scary stories
are about AI doing all sorts of things that are
corrupt and we don't want to know about. But I mean,
is that the reality?
Speaker 2 (09:58):
So a I'll give you a short answer to an
extremely complicated question. But often clients come and say, how
are we going to fight AI? You know, how are
we're possibly going to cope with this? And a lot
of the time the answer is a I. You know,
it's not just a tool that the bad codes can deploy.
You know, the best compliance systems we see now, which
(10:19):
are you know, tracking aberrant patterns of behavior or a
normalist kind of financial movements AI driven. So yeah, the
trick is to get in and embrace AIS as an
effective compliance tool and do all of the bits of
pieces associated with that, which is good training, good integration,
you know, constantly monitoring the I AI to make sure
(10:41):
that it's doing what it's supposed to be doing. But
you know, it's it's a better compliance tool that it
is a weapon for fraudsters. So you know, the short
answer is, if you're worried about AI and get a
good AI consultant, al.
Speaker 1 (10:55):
Ris, thanks for talking. If you're ingreed, thank you.
Speaker 2 (10:57):
I was going to add, by the way, just to summarize,
I love the name of the podcast, but I was
I was having a giggle because it seems that when
you're talking about corruption, the problem with corruption is there's
too much greed and not enough fear.
Speaker 1 (11:09):
A very appropriate Well, it's called fear and greed because markets,
of course are driven by fear and greed. Benjamin Graham
said that decades and decades ago, and maybe corruption is
driven by fear and greed too.
Speaker 2 (11:20):
Then well it's driven there. I definitely agreed. Sometimes the
best the best. I lived in Singapore for twenty three years.
The anti corruption fight there is driven by fear after
getting caught, so it's a slightly different enemy. But thank you,
thank you, Sere.
Speaker 1 (11:35):
That was Mauris Berg, Managing director Investigations, Diligence and Compliance
at Kroll. This is the Fear and Greed Business Interview.
Join us every morning for the full episode of Fear
and Greed at Business News. You can use I'm Chanel Mark.
Enjoy today
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