Fourteen Studies in Qorporate Crime Or Corporate Harm. STAINS on a WHITE COLLAR Mmmmik Ikim

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Fourteen Studies in Qorporate Crime Or Corporate Harm. STAINS on a WHITE COLLAR Mmmmik Ikim Chris Masters Fourteen studies in qorporate crime or corporate harm. STAINS ON A WHITE COLLAR mmmmik IKiM [Fmj^iBBou UiB^BB^ to Edited by Peter Grabosky and Adam Sutton Foreword by Chris Masters THE FEDERATION PRESS Published in Sydney by The Federation Press 101A Johnston Street Annandale. NSW. 2038 In association with Bow Press Pty Ltd 208 Victoria Road Drummoyne. NSW. 2047 National Library of Australia Cataloguing-in-Publication entry Stains on a white collar: fourteen studies in corporate crime or corporate harm. Bibliography. ISBN 1 86287 009 8. 1. Commercial crimes — Australia — Case studies. 2. Corporations — Australia — Corrupt practices — Case studies. 3. White collar crimes — Australia — Case studies. I. Grabosky, Peter N. (Peter Nils), 1945- . II. Sutton, Adam Crosbie. 364.1'68'0994 Copyright ® this collection The Australian Institute of Criminology This publication is copyright. Other than for the purposes of and subject to the conditions prescribed under the Copyright Act, no part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Enquiries should be addressed to the publishers. Cover designed by Hand Graphics Text designed by Steven Dunbar Typeset in 10 pt Century Old Style by Midland Typesetters, Maryborough Printed in Australia by Griffin Press Production by Vantage Graphics, Sydney CONTENTS FOREWORD ix CHRIS MASTERS INTRODUCTION xi 1 THE BOTTOM OF THE HARBOUR TAX EVASION SCHEMES 1 ADAM SUTTON 2 THE DEMISE OF TRUSTEES EXECUTORS AND AGENCY CO. LTD 15 PETER GRABOSKY 3 THE COLLAPSE OF BISHOPSGATE INSURANCE 31 PETER GRABOSKY 4 THE RUSSELL ISLAND LAND FRAUD 44 ADAM SUTTON 5 THE MEAT SUBSTITUTION SCANDAL 60 PETER GRABOSKY 6 MEDICAL FRAUD AND ABUSE IN MEDICAL BENEFIT PROGRAMMES 76 PAUL WILSON 7 THE DALKON SHIELD 92 PETER CASHMAN 8 THE MEDIA, TOBACCO AND PUBLIC HEALTH 118 PETER GRABOSKY 9 SEX DISCRIMINATION: WARDLEY V ANSETT 131 PETER GRABOSKY 10 LEAD POLLUTION AND THE CHILDREN OF PORT PIRIE 143 ROB FOWLER AND PETER GRABOSKY 11 CRIME WITHOUT PUNISHMENT: THE APPIN MINE DISASTER 160 ANDREW HOPKINS 12 DEATH AT KELLOGCS 175 ANDREW HOPKINS 13 COKE AND CANCER AT BHP 191 JOHN BRAITHWAITE AND BRENT FISSE ASBESTOS MINING AT BARYULGIL: A CASE CORPORATE NEGLECT? 208 NEIL GUNNINGHAM CONCLUSION 237 ACKNOWLEDGMENTS 264 INDEX 265 THE CONTRIBUTORS John Braithwaite PhD (Queensland), Professorial Fellow in the Department of Law, Research School of Social Sciences, Australian National University. Formerly a Research Criminologist at the Australian Institute of Criminology. His other books include To Punish or Persuade: Enforcement of Coal Mine Safety, Corporate Crime in the Pharmaceutical Industry, and Occupational Health and Safety Enforcement in Australia. Peter Cashman LLB, DipCrim (Melbourne), LLM (London), a Sydney lawyer, part-time Commissioner with the Australian Law Reform Commission and alternate Commissioner on the NSW Legal Aid Commission. Recently completed a PhD at the University of London and was formerly foundation Director of the Public Interest Advocacy Centre. Brent Fisse LLB (Canterbury), LLM (Adelaide), Professor of Law and Director of the Institute of Criminology at the University of Sydney. Formerly a Reader-in-Law at the University of Adelaide where he served as Dean of the Faculty of Law in 1977-78. His publications include The Impact of Publicity on Corporate Offenders (with John Braithwaite) and Corrigible Corporations and Unruly Law (co-edited with Peter French). Rob Fowler LLM (Adelaide), a Principal Lecturer in Law at the Faculty of Law, University of Adelaide. Has taught and researched extensively in the area of environmental law. Author of Environ- mental Impact Assessment, Planning and Pollution Measures in Australia and numerous other articles and papers on environmental law. Peter Grabosky PhD (Northwestern), a Senior Criminologist at the Australian Institute of Criminology. Previously Director of the Office of Crime Statistics in the South Australian Attorney- General's Department, and prior to that Associate Professor of Political Science at the University of Vermont. Other books include The Politics of Crime and Conflict (with T Gurr and R Hula), Of Manners Gentle: Enforcement Strategies of Australian Business Regulatory Agencies (with John Braithwaite), and Wayward Governance: Illegality and its Control in the Public Sector. Neil Gunningham, LLB, MA (Sheffield), a Reader in the Faculty of Law, Australian National University. His books include Safeguarding the Worker, Pollution, Social Interest and the Law, and Commercial Law (with D W Greig). Andrew Hopkins PhD (Connecticut), lectures in Sociology at the Australian National University. Has also taught at the University of New South Wales and was for a period a criminologist with the Australian Institute of Criminology. Author of Crime, Law and Business: The Sociological Sources of Australian Monopoly Law. Adam Sutton, PhD (New South Wales), Director of the South Australian Office of Crime Statistics, a Visiting Scholar at the Flinders University of South Australia and South Australian representative on the Criminology Research Council. Previously statistician in the New South Wales Bureau of Crime Statistics and Research and senior research officer in the New South Wales Department of Corrective Services. Author of a number of articles and reports on white-collar crime and other topics. Paul Wilson PhD (Queensland), Assistant Director (Research and Statistics) at the Australian Institute of Criminology. Previously Chairperson of Sociology at the University of Queensland and held academic positions in Canada and the United States. His books include Black Death White Hands, The Australian Criminal Justice System (with D Chappell), Murder of the Innocents, and Street Kids (with J Arnold). ustralia can no longer afford the lazy greed of the corporate Acriminal. But when we search for the face of the faceless men who steal from us, we begin to see our own reflection. The third party car insurance fraudster is more inclined to be a fellow motorist than some high-flying banker. The fact that we can identify the villains, point the finger at them, 'dob them in', if you like, signifies the arrival of a new age. It is no longer a case of them and us, the them is us. There is a new mandate to bring the corporate criminals to book. The hard part is identifying the culprit. In my work as an 'investigative journalist', I have specialised to some extent in the subject of police corruption. What occurs to me is this is a refreshingly uncomplicated crime. The bent copper is a social evil but at least the offence is obvious. The media reports, with consistency, these obvious crimes. We are not so concerned about the less obvious ones. I once attempted to report on bank robbery from the other side of the counter. I discovered that bank managers and bank employees were responsible for a large and as yet unknown number of offences. Once detected, the banks were likely to cover up rather than publicly expose the offenders. To do so would cause the public to lose confidence. But we pay anyway. The banks simply pass on the cost to the consumer. I suspect electronic fraud in banking causes an even greater cost. The potential for the computer criminal behind the counter to plunder our accounts is certainly there. Automatic Teller Machine fraud is a big problem and more a problem for us than the banks. If you read the small print you will see you will probably be held liable should your account be pilfered by a young white-collared computer wizard. The working class criminal, to his credit will in the vernacular, 'put his hand up'. The gaols are full of these people partly because they are more likely to accept their fate. The corporate criminal is not a practised confessor. ix STAINS ON A WHITE COLLAR This book doesn't stop with the thief. The corporate criminal, by neglect or outright irresponsibility can also contribute to loss of life. More recently I worked on the subject of asbestos related diseases in Australia. I learned we have the worst record for mesothylioma deaths of any country in the world. Mesothylioma is a particularly vicious form of cancer which attacks the lining of the lung and causes painful and inevitable death. It seems there are two reasons for the high incidence of this disease in Australia. The first is the substance which causes the disease, asbestos. The second is a more serious epidemic of secrecy. There is overwhelming evidence that the knowledge that asbestos is harmful has been with us for decades, if not centuries. Yet mine and factory managers appeared to err on the side of profit when imposing safety standards. They put dollars before men's lives. As this book points out, Industry executives rarely have contact with cancer patients. They are somewhat like the WWI bomber pilots who pressed the button, watched the flickering lights below and turned for home. Their failure to protect the workers; their guilt in covering up the dangers in the workplace has left the most shameful stain of all. The safety officers who allowed the mine managers to clean up before the Inspector's visit. The theatre sister who turned a blind eye to yet another unnecessary operation have all helped shield the corporate criminal. All too frequently I have seen the invest- igator in the Australian Federal Police or the Health Department, cast the file into the Too Hard Basket. They are dedicated to a quiet, untroubled life. Why would a lowly paid officer of the Fraud and Overservicing Division take on one of the most powerful medical practitioners in the land? So we all have a role to play in stripping the protective barriers away. I wonder whether a new age may bring us to the recognition that the tall poppy syndrome is a myth and there is little cause to take pride in the fact that we are not a nation of dobbers.
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