Rudd rejects union call to save jobs Phillip Coorey and Danny John .. March 14, 2009
THE Federal Government has rejected demands from trade unions that the taxpayer-funded guarantees for banks be used as leverage to stop them sending jobs overseas.
With the ANZ to send at least another 500 jobs to its processing centre in Bangalore, India, by the end of the year, the unions cried enough yesterday.
"The banks begged for Government support but are not giving the Australian community anything in return," the ACTU president, Sharan Burrow, said.
Given the worsening unemployment numbers and pleas by the Government for businesses to minimise job cuts, Ms Burrow said the ANZ's actions were "absolutely appalling and totally unacceptable".
Banks have been sending jobs to developing countries for several years, but Ms Burrow and Leon Carter, the national secretary of the Financial Sector Union, said conditions must be attached to the bank guarantees to end the process.
"Kevin Rudd and Julia Gillard should say enough is enough," Mr Carter said.
Late last year, in response to the global financial crisis, the Government guaranteed bank deposits of up to $1 million and also guaranteed the borrowings by banks to ensure their access to credit.
A spokeswoman for Mr Rudd said yesterday the guarantee was not designed as a tool to influence how a bank did business.
"The bank guarantee was designed to maintain stability in our banking system and ensure ongoing lending to Australian businesses and households, not to provide a free kick to banks nor exercise control over their management decisions," she said.
"It gave 13 million Australians certainty over their deposits, while helping our banks to raise more than $85 billion, which is being used to lend to businesses and households."
The Government did use the guarantee as leverage when urging the banks to keep lending to viable small businesses which were having difficulty securing credit.
"The major banks will continue to need to step up to the plate. Remember that these banks were the beneficiaries of two separate guarantees," Mr Rudd told the Herald in a recent interview.
The push to shift jobs offshore to ANZ's high-tech processing centres in Bangalore and Fiji has accelerated under the bank's recently appointed chief executive, Mike Smith, who has targeted as much as $200 million in cost savings through such moves.
Part of the move is designed to support the group's push into Asia where Mr Smith has set the ambitious target of establishing ANZ as a "super-regional" bank by 2012 through its growing businesses in China, Vietnam, Malaysia, Indonesia and the Indian subcontintent.
But the bank also wants to reduce costs in Australia, particularly from its back office transaction and processing arms, which will result in the latest round of job cuts this year.
These were flagged by Mr Smith last October, although he did not put a number on the jobs to go or the exact timetable.
Although sending jobs overseas has been under way for some years, all job losses are politically sensitive when the nation is heading for recession.
This week new figures showed the unemployment rate had jumped from 4.8 per cent to 5.2 per cent in February, leading economists and industry bosses to predict the Treasury forecast of 7 per cent by June next year was optimistic.
The Opposition is using unemployment to try to pressure Labor into amending its industrial relations laws. The Workplace Relations Minister, Julia Gillard, embarked on a media blitz yesterday to defend the laws against what she says is a misinformation campaign.
An ANZ spokeswoman said people whose jobs were sent overseas are offered other roles.
Mr Carter rejected this. "If they're doing this to save costs, they're not seriously asking us to believe that they're doing this by employing people in India and keeping all the people in Australia employed."
Aussi .. Top bank snared in shady third world deals Richard Baker and Nick McKenzie .. May 23, 2009
THE Reserve Bank has been involved in the payment of multimillion-dollar commissions to shady middle-men in its drive to win banknote printing deals with foreign governments.
Securency, a Melbourne-based banknote supplier half-owned by the Reserve Bank, has made a substantial number of "commission" payments to agents, including those previously implicated in corruption scandals.
The company, which has supplied polymer material to print money in Australia and 26 other countries, is chaired by the bank's assistant governor, Robert Rankin. Its board features another two Reserve Bank appointees, as well as executives from a British firm, Innovia Films, the owner of the other half of Securency.
Some of Securency's agents are closely tied to officials in countries ranked by Transparency International as highly corrupt.
Several agents have been named in official corruption investigations in Africa and Asia. At least one has a criminal conviction for fraud.
Company insiders have raised concerns that the company's practices have left it exposed to allegations that some commissions could be used to pay kickbacks to foreign officials.
The Reserve Bank's Deputy Governor, Ric Battellino, said yesterday that he would demand an immediate response from Securency about its use of agents and payments to them.
"If this is happening, then it is against all the policies and procedures the RBA has put in place for this organisation," he said.
It can be revealed Securency has:
* Made payments to a London firm, Contec Global, which was accused in an official Ugandan inquiry of having a corrupt relationship with a Ugandan minister found to be "fronting and lobbying" for the company.
* Been linked with a controversial South African casino tycoon, Vivian Reddy, who was embroiled in the recently aborted corruption trial involving his friend, the President, Jacob Zuma. Reddy denies the allegations.
* Made payments to companies linked to a South African businessman, Don McArthur, who last year was convicted for fraud. McArthur denied any link to Securency.
* Paid million of dollars in commissions to a Vietnamese company, CFTD, whose subsidiary, Banktech was managed by the Vietnamese central bank governor's son at the time the bank decided to switch to polymer notes in 2002. A 2007 Vietnam corruption inquiry found the governor's role in the deal was irregular.
A company insider also claims he was told that Securency had provided $US100,000 - subsequently donated to an Indian political party in 2007 - while it was seeking a trial of polymer notes. It is claimed the payment was recorded in accounts as "marketing expenses".
In a statement yesterday, Securency said it conducted a thorough due diligence process when appointing agents, which included checks by the Federal Government agency Austrade and compliance with international anti-corruption conventions.
Securency said its agents - whose identities are disclosed to the Reserve Bank representatives on its board had signed agreements forbidding payments to foreign officials and politicians.
In its statement, Securency acknowledged it had cut ties with agents on a "number of occasions" when it was not satisfied with performance.
Securency denies any payment to Indian political parties or politicians.
In contrast to Securency, an associated company, Note Printing Australia - which is fully owned by the Reserve Bank - said it no longer used agents because it was "more responsible" to deal directly with central banks.
Another Securency agent operating in Asia is a Melbourne barrister, Daryl Dealehr, who has ties to the family of Cambodia's late police chief Hok Lundy and the Prime Minister, Hun Sen. Securency has yet to win any contracts in Cambodia and Mr Dealehr has not been named in any corruption or criminal inquiries.
The revelation of Securency's payments to agents in developing countries has the potential to embarrass the Government and the Reserve Bank, especially so soon after the Iraqi kickbacks scandal involving AWB.
Mr Battellino said the bank was aware Securency operated in countries with "bad reputations" but was "conscious to ensure arrangements were in place to avoid corruption payments".
There is no suggesting Securency has engaged in bribery but its operations with agents in corruption-prone countries raise concerns about its risk management procedures.
Company insiders claim Securency offers agents commissions of between 10 and 20 per cent of any deal they help win. The industry standard is from 2 to 6 per cent.
Securency said commission payments varied between its agents, and advice from Austrade was sought to determine appropriate commissions for each country it operated in.
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