BHP Billiton’s corporate hospitality packages offered to 176 public officials during the 2008 Beijing Olympic Games have costed them a run-in with both US and Australian anti-corruption regulators, with repercussions potentially flowing on to other Australian firms engaging in corporate sponsorship, as the Sydney Morning Herald reported. A major sponsor of the Games, BHP’s Olympic hospitality programme involved absorbing the costs of issuing supplier or customer representatives with business-class flights, tickets and entertainment. The US Security and Exchange Commission (SEC) found that these activities failed to satisfy internal record-keeping compliance standards, representing a violation of US anti-corruption and bribery legislation. For this, they have issued BHP with a US$25 million fine, and require the company to report on its anti-corruption compliance until May 2016. The SEC has ceased further investigations into bribery charges, a more serious criminal offence under the Foreign Corrupt Practices Act.

As with any commerce activity, where there is a potential breach of domestic or foreign anti-corruption legislation, applying sound governance principles to guide decisions made in relation to payments or other benefits awarded to external parties can prove to be critical. Adequate steps to ensure good governance and compliance include internal monitoring and recording of tender processes with foreign officials.

While the Act does not cover ‘passive bribery’ – the receipt of bribes – US investigators have passed onto the Australian Federal Police awareness of prominent WA local Government official’s receipt of a $16, 000 entertainment package from BHP; WA’s Crime and Corruption Commission continue to investigate. As Perth Now reported, councillors are required under the City’s Code of Conduct to refuse gifts from any person “seeking to undertake an activity involving local government decision”. The official was quoted as having said that they did not report the company’s invitation to fly business-class and tickets to the Games in 2008 as a gift, on the grounds that the package was not likely to influence a relationship with BHP. However at that time, they had announced that the firm was to be welcomed to establish national headquarters in Perth, an operational decision they say they were not involved in.

As reported in the New York Times, recent allegations of corruption have been made by US and Swiss authorities against FIFA committee members in relation to a range of charges, including receiving bribes from international bidders for the 2004 FIFA World Cup. Regulatory advisory firm Convington reports that with the UK having introduced a national Bribery Act in 2011, this activity appears to be part of a world-wide crack-down on anti-corruption enforcement in sport.

Good corporate governance, compliance and risk management must underpin the management of all major sporting organisations, events and venues.  As was highlighted above, the tentacles of corruption reach far and wide.