Stretched deadlines and rising costs for some mining contractors are creating a perfect storm for fraud, according to a leading Perth forensic accounting expert.
McGrathNicol partner Michael Shanahan also warned that tighter anti-bribery laws in Britain threatened to undermine future offshore investment in WA resource plays that are expanding into Africa, by limiting their potential pool of investors. Mr Shanahan made the comments before today's address to the CPA's Mining and Energy Conference.
"Whenever you have got pressures on individuals caused by tight deadlines, tight budgets, forecasts, those sorts of things, then there can be that incentive to do the wrong thing," he said.
Mr Shanahan said that simple measures, including thorough due diligence of whether a contractor's back office was capable of monitoring big jobs before signing a contract could prevent headaches down the track.
He also argued that even though Australian laws - which are under review - allow some so-called facilitation payments in overseas countries such has Africa, British laws did not, which had implications for the big push by West Perth miners into new resource frontiers.
"If you are a miner who has a small project that you are hoping to develop and sell to an international company, if you are not operating in compliance with the UK Bribery Act . . . it will create a risk for any potential buyer," he said. "And whenever there is risk it is going to impact on the value of the asset."
Just last month the OECD released a report criticising Australia's limited enforcement of its foreign anti-bribery laws, adding to calls for change in the light of scandals, including at the RBA's Securency unit.
"Australia has had limited enforcement of its foreign bribery laws, despite its companies' risk of exposure to foreign bribery solicitation in the industries in which they operate," the report said.
"This lack of enforcement is not due to an absence of allegations, however."The OECD noted that since 2005 the Australian Federal Police had received 28 allegations of foreign bribery involving Australian companies with 21 cases closed and one charge laid.
The new magazine for a new generation of West Australians.Click here to download »
All the latest market figures from Australia and the world.Click here »
'The West Australian' is a trademark of West Australian Newspapers Limited 2013.
All rights reserved.
Select your state to see news for your area.