Bills Digest No. 105,
2017–18
PDF version [791KB]
Cat Barker
Foreign Affairs, Defence and Security Section
Monica Biddington
Law and Bills Digest Section
8
May 2018
Contents
Purpose of the Bill
Commencement
Background
Committee
consideration
Policy
position of non-government parties/independents
Position of
major interest groups
Financial
implications
Statement of
Compatibility with Human Rights
Key issues
and provisions: foreign bribery (Schedule 1)
Key issues
and provisions: deferred prosecution agreements (Schedule 2)
Other
provisions
Date introduced: 6
December 2017
House: Senate
Portfolio: Attorney-General
Commencement: See
page 3 of this Digest for details.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent, they
become Acts, which can be found at the Federal
Register of Legislation website.
All hyperlinks in this Bills Digest are correct as at
May 2018.
Purpose of
the Bill
The purpose of the Crimes Legislation Amendment
(Combatting Corporate Crime) Bill 2017 (the Bill) is to:
Commencement
Sections 1–3 will commence on Royal Assent.
The main amendments to the foreign bribery offence in Part 1
of Schedule 1, and the consequential amendment to the DPP Act
in item 11 of Schedule 1 will commence six months after
Royal Assent. The consequential amendments in items 12–15 of Schedule 1
will commence on the first 1 January, 1 April, 1 July or
1 October to occur after the end of the period of six months from Royal
Assent.
The deferred prosecution agreement scheme in Schedule 2
will commence the day after Royal Assent with the exception of Part 2 which
will commence on the first 1 January, 1 April, 1 July or 1 October to
occur after the day the Act receives Royal Assent.
Background
Foreign bribery
Australia ratified the Organisation for Economic
Cooperation and Development (OECD) Convention on Combating Bribery of
Foreign Officials in International Business Transactions (Anti-Bribery
Convention) in 1999.[1]
It introduced Division 70 of the Criminal Code, which implements
the key obligation of criminalising bribery of foreign public officials, the
same year.[2]
Currently, it is an offence to provide, offer or promise to provide, or cause a
benefit to be provided to another person, with the intention of influencing a
foreign public official in the exercise of his or her duties, in order to
obtain or retain business, or a business advantage, that is not legitimately
due to the recipient or intended recipient. To date, there have only been two
foreign bribery prosecutions in Australia: one in which charges were laid
against Securency International Pty Ltd and Note Printing Australia (NPA)
Limited and six individuals (which remains before the courts) and another in
which three individuals pleaded guilty to conspiracy to bribe a foreign public
official to secure contracts for their construction company, Lifese, in Iraq.[3]
In April 2017, the Government released a consultation
paper and exposure draft provisions of proposed reforms to Australia’s foreign
bribery laws.[4]
The consultation paper stated:
... Due to its nature, foreign bribery is inherently difficult
to detect and enforce. Offending is often offshore, with evidence hard to
identify and obtain. It can be easily concealed—with bribes disguised as agent
fees or other seemingly legitimate expenses.
The offence in its current form poses challenges for typical
cases of foreign bribery, which may involve the use of third party agents or
intermediaries, instances of wilful blindness by senior management to
activities occurring within their companies and a lack of readily available
written evidence.[5]
The proposed reforms aim to remedy those shortcomings by:
- expanding
the definition of foreign public official to include candidates for office
- providing
that the foreign bribery offence is about ‘improperly influencing’ a foreign
public official (instead of the current language which refers to a benefit
being ‘not legitimately due’)
- removing
the requirement for a bribe to be provided, promised or offered so as to
influence the foreign public official in the exercise of his or her official
duties
- expanding
the foreign bribery offence to apply where a personal (as opposed to business)
advantage is sought
- clarifying
that the advantage sought may be for someone other than the person providing,
promising or offering a bribe
- clarifying
that the accused does not need to have specific business or a specific business
advantage in mind and
- creating
a new corporate offence of failing to prevent foreign bribery.
The proposed new offence of failing to prevent foreign
bribery is similar to an offence introduced in the United Kingdom in 2010 as
part of an overhaul of its domestic and foreign bribery laws.[6]
Under section 7 of the Bribery Act 2010 (UK), a commercial
organisation is guilty of an offence if a person associated with the
organisation bribes another person intending to obtain or retain business, or
an advantage in the conduct of business, for the organisation.[7]
It is a defence if the organisation can prove that it had adequate procedures
in place to prevent persons associated with the organisation from engaging in
bribery. As required under section 9 of the Bribery Act, the
relevant minister has published guidance on procedures that commercial
organisations can put in place to prevent bribery.[8]
The UK’s offence of failing to prevent bribery represented
a novel approach to holding companies accountable for the conduct of their
employees and other associates by extending corporate liability beyond
traditional limits:
The main problem confronting prosecutors in this country
today is how to put companies in the dock, together with those individuals who
have behaved corruptly for their benefit.
In order to indict a company, we need to prove that at least
one individual who was a 'controlling mind' of that company had been involved
in the corruption.
In practice that means someone at or very close to Board
level. You can immediately appreciate the difficulty in proving that especially
in global companies where much of the decision making is devolved away from the
Board.
...
The new Act sweeps away this requirement and introduces a new
corporate offence of failing to prevent bribery.
This is a novel concept under English law and one which we
are likely to see more of the years to come.[9]
The UK offence commenced in July 2011, but the first
conviction was not obtained until December 2015, when Sweett Group PLC
pleaded guilty to failing to prevent a bribe intended to secure and retain a
contract in the United Arab Emirates. The company was ordered to pay £2.25 million
in February 2016.[10]
The UK’s Serious Fraud Office has since entered into deferred prosecution
agreements with Standard Bank and another company in relation to this offence.[11]
The first contested prosecution for the offence concluded in March 2018,
with Skansen Interiors Limited being found guilty of the offence. One of
Skansen’s former directors had previously pleaded guilty to foreign bribery and
Skensen was unsuccessful in its argument that it had adequate procedures in
place.[12]
Like the UK offence, the proposed corporate offence of
failing to prevent foreign bribery in the Bill will impose liability on a
corporation for the actions of a person associated with it unless the
corporation can prove that it had adequate procedures in place to prevent such
conduct. As is the case in the UK, the offence will be accompanied by a
provision requiring the minister to provide written guidance on preventative
measures.
OECD Working Group report on Australia’s compliance with
the Anti-Bribery Convention
The OCED Working Group on Bribery adopted a report on the
fourth evaluation of Australia’s compliance with the Anti-Bribery Convention
in December 2017.[13]
The Working Group identified several achievements and positive developments,
including reforms passed since the previous assessment, establishment of the
Fraud and Anti-Corruption Centre in the Australian Federal Police (AFP),
establishment of the Fintel Alliance (a public-private partnership aimed at
combating money laundering, terrorist financing and organised crime), and the
engagement of AFP liaison officers around the world in foreign bribery
investigations.[14]
The Working Group also made 15 recommendations. With the exception of the
recommendation to enact whistleblower protections for the private sector
equivalent to those that apply to the public sector under the Public Interest
Disclosure Act 2013, the recommendations did not relate to legislative
reforms.[15]
The Working Group noted but did not provide any assessment of the reforms
proposed in the Bill, stating:
While as a matter of practice, the [Working Group] does not
assess proposed legislation, the lead examiners acknowledge that the amendments
introduced into the Australian Parliament in December 2017 are intended to
clarify and strengthen Australia’s foreign bribery offence.[16]
Deferred prosecution agreements
According to the Oxford Dictionary of Law Enforcement a
deferred prosecution agreement is an agreement that:
... charges will be laid but not proceeded with provided the
organisation complies with a set of agreed terms and conditions, which may
include, among other things, payment of a financial penalty, an account of any
profits made from the alleged offence and the implementation of remediation
and/or monitoring measures. The approval of the court is required for the DPA
to come into effect. The court must decide if using a DPA is in the interest of
justice.[17]
The proposal in this Bill to
introduce a Deferred Prosecution Agreement Scheme (DPA scheme) is the first
time Australia has considered having a scheme. The Attorney-General’s
Department published a Public Consultation Paper in March 2017 entitled
‘Improving enforcement options for serious corporate crime: A proposed model
for a Deferred Prosecution Agreement Scheme in Australia’, which followed an
earlier public consultation paper one year earlier.[18] The Government sought to focus on options to develop an
effective response to corporate crime by encouraging greater self-reporting by
companies, and ultimately enhance the accountability of Australian business for
serious corporate crime.[19] The 2017 Consultation paper proposed an Australian DPA
scheme focused on reparation, remediation, financial penalties and on the
implementation of effective compliance programs, and modelled aspects of the
proposed scheme on the UK DPA scheme.[20]
DPAs in the United Kingdom[21]
In the United Kingdom DPAs are provided for under the Crime
and Courts Act 2013 (UK).[22]
This Act provides a non-exhaustive list of approved DPA terms to:
-
pay to the prosecutor a financial penalty;
-
compensate victims of the alleged offence;
-
donate money to a charity or other third party;
-
disgorge any profits made from the alleged offence;
-
implement a compliance programme or make changes to an existing
compliance programme relating to policies or to the training of employees or
both;
-
co-operate in any investigation related to the alleged offence; [or]
-
pay any reasonable costs of the prosecutor in relation to the alleged
offence or the DPA.[23]
As stated above the list is non-exhaustive; the Act merely
requires that the terms included in the DPA be ‘fair, reasonable and proportionate’.[24]
The circumstances in which it would be appropriate to utilise a DPA are
outlined in the DPA Code of Practice published by the Serious Fraud Office
(‘SFO’) and the Crown Prosecution Service.[25]
The full list of offences that are covered by the UK’s DPAs scheme are listed
in Schedule 17 of the Crime and Courts Act 2013 (UK).[26]
The first step is to determine whether there is sufficient
evidence to bring a prosecution.[27]
Then, prosecutors assess whether it would be in the public interest to undertake
a DPA rather than to prosecute.[28]
Certain factors are listed within the code that would guide this analysis such
as the past behaviour of the corporation and the extent of the cooperation of
the company involved.[29]
The court will then undertake a similar analysis to determine whether a DPA is
in the public interest. The court will look at, among other things the
seriousness of the offence, the value to the community of incentivising
corporations to self-report offences, the attention that the corporation paid
to compliance both before and after the offence, the impact of a prosecution on
third parties and the extent to which the corporation has changed its culture
and personnel.[30]
DPAs in the United States
By way of comparison, DPAs are also used in the United
States and are not as detailed under statute as the UK model. Vicky Comino
offers an excellent summary of the framework for DPAs in the United States of
America. She states that ‘DPAs developed in the US as an administrative
innovation of prosecutors’.[31]
Although there is no statute that specifically addresses DPAs an indirect
authority for prosecutors to enter into such arrangements is the Speedy
Trial Act 1974 (US). This Act makes provision for the suspension of time
limits upon cases where the:
... prosecution is deferred by the attorney for the Government
pursuant to written agreement with the defendant, with the approval of the
court, for the purpose of allowing the defendant to demonstrate his good
conduct.[32]
This is as opposed to the UK model where guidance as to
the content of DPA is derived from statute. In the US, the terms of a DPA are
often borrowed from the United States Sentencing Guidelines for the relevant
offences.[33]
According to Eugene Illovsky DPAs typically include:
... some admission of wrongdoing, payment of fines, cooperation
with the government, adoption of compliance programs and waiving of speedy
trial rights and statute of limitations defences that would otherwise apply in
respect of the identified offences.[34]
Guidelines for the use of DPAs have also been issued by
the Department of Justice in the US Attorneys’ Manual, Principles of Federal
Prosecution of Business Organisations and by the Securities and Exchange
Commission in its Enforcement Manual.[35]
In proposing the Australian DPA Scheme, the Government
considered the frameworks currently in use in the United States and United
Kingdom, and the responses it received to the 2016 consultation paper.[36]
Committee consideration
Senate Standing Committee on Legal and Constitutional
Affairs
The Senate Standing Committee on Legal and Constitutional
Affairs (L&C Committee) reported on its inquiry into the Bill on 20 April
2018.[37]The
Committee made four recommendations, three of which mirrored recommendations made by the Senate Standing Committee on
Economics, and the last of which was that the Bill be passed. Matters raised
in submissions to the inquiry are discussed below under ‘Position of major
interest groups’.
Senate Standing Committee on Economics
The Senate Standing Committee on Economics tabled the
report on its inquiry into foreign bribery on 28 March 2018. The
report included 22 recommendations, several of which are directly relevant to
the Bill (both the foreign bribery reforms and the introduction of DPAs).[38]
Foreign bribery recommendations relevant to the Bill
Among the Committee’s recommendations were:
- the
definition of foreign public official be amended to include
candidates for office (Recommendation 5)
- the
foreign bribery offence apply in circumstances where a bribe was made to obtain
or retain a personal advantage (Recommendation 6)
- a
new corporate offence of failing to prevent bribery be enacted, and that
principles-based guidance be published on steps corporations should take to
implement adequate procedures to prevent foreign bribery (Recommendation 7)
and[39]
- the
foreign bribery offence be amended to clarify that a person is prohibited from
bribing a foreign public official to obtain a business advantage for someone
else, and that the payer of the bribe need not intend to obtain or retain any
specific business or business advantage to be guilty of the offence (Recommendation 10).[40]
The Bill would implement all of the above recommendations.
The Committee did not make any recommendations relevant to the amendments in
the Bill that will provide that the foreign bribery offence is about
‘improperly influencing’ a foreign public official (instead of a benefit being
‘not legitimately due’) and remove the requirement for a bribe to be provided,
promised or offered so as to influence the foreign public official in the
exercise of his or her official duties.[41]
The majority of the Committee also recommended that the
‘facilitation payments’ defence to the foreign bribery offence in the Criminal
Code and related provisions in the Income Tax Assessment Act 1997 be
‘abolished over a transition period, to enable companies and individuals to
adjust their business practices and procedures to comply with the law as
amended’.[42]
That recommendation was not supported by Coalition Senators.[43]
Deferred prosecution agreement recommendations
The Committee also made a number of recommendations about a
deferred prosecution agreement scheme, specifically:
- that
the government introduce a deferred prosecution agreement scheme for
corporations, supported by a strong legislative framework which requires strict
compliance and allows for adequate responses in the event of a breach (Recommendation
11)
- other
than in exceptional circumstances, deferred prosecution agreements be published,
together with details on how a company has complied with the terms and
conditions, and any breach, variation or termination (Recommendation 12)
- the
Code of Practice make provision for the appointment and methodology of
independent external monitors at the company’s expense to monitor compliance
with a deferred prosecution agreement (Recommendation 13)
- as
part of the public consultation on the draft Code of Practice, the government
publish an exposure draft and allow a period of no less than four weeks for
stakeholders to provide comment (Recommendation 14).[44]
These recommendations are similar to those subsequently made
by the L&C Committee’s inquiry into the Bill.[45]
Senate Standing Committee for the Scrutiny of Bills
The Senate Standing Committee for
the Scrutiny of Bills (Scrutiny of Bills Committee) raised two issues in its
report on the Bill, both of which relate to the foreign bribery amendments in
Schedule 1 to the Bill.[46]
Offence-specific defence to the foreign bribery offence
Item 7 of Schedule 1 to the
Bill will insert proposed subsection 70.3(2A) to establish a new defence
to the offence of foreign bribery in section 70.2 of the Criminal Code as amended by the Bill. The defence is similar
to an existing ‘lawful conduct’ defence in subsection 70.3(1), which,
broadly, provides that a person does not commit the offence of foreign bribery
if a written law in force where a person’s conduct occurred required or
permitted the provision of the benefit in question. However, the new defence
will apply in relation to conduct related to candidates to be foreign public
officials (it is consequential to an amendment to the definition of foreign public official to include candidates for office
(item 4 of Schedule 1). As with the existing defences, a defendant
wishing to rely on the new defence in proceedings for a foreign bribery offence
will bear an evidential burden in relation to
the matter (which would require adducing or pointing to evidence that suggests
a reasonable possibility that the matter exists).[47]
The Scrutiny of Bills Committee recognised that the
defendant will bear only an evidential rather than a legal burden, but
nonetheless stated that it expected any reversal of the burden of proof to be
justified.[48]
It did not consider that the defence meets the criteria for offence-specific
defences set out in the Government’s Guide to Framing Commonwealth Offences,
and requested the Attorney-General’s advice as to why an offence-specific
defence is proposed (as opposed to including the matter as an element of the offence).[49]
The Attorney-General responded that the defence is
‘consistent with the broader principle in Australian law of a defence of lawful
authority’, for which a defendant bears an evidential burden, and is
appropriate because the defendant would be in a better position to point to
evidence of a written foreign law he or she relied on; it would be difficult
and expensive for the prosecution to prove the non-existence of a foreign law
and the question of whether a benefit was required or permitted under a written
foreign law is not central to the question of culpability for the offence.[50]
The Scrutiny of Bills Committee still considered that the
proposed defence does not appear to accord with the principles in the Guide
to Framing Commonwealth Offences. It requested that the information
provided by the Attorney-General be incorporated into the Explanatory
Memorandum, drew its concerns to the attention of senators and left the
question of the appropriateness of the proposed defence to the Senate as a
whole.[51]
Preventing bribery of foreign public officials
Proposed section 70.5A of the Criminal Code
(inserted by item 8 of Schedule 1) will create a new
corporate offence of failing to prevent foreign bribery. An exception will
apply if a corporation can prove that it had adequate procedures in place
designed to prevent its associates (which include, for example,
its employees and officers) from engaging in foreign bribery (proposed
subsection 70.5A(5)). Proposed section 70.5B (inserted by
the same item) will require the Minister to publish guidance on the steps that
a body corporate can take to prevent its associates from bribing foreign public
officials. The guidance will not be a legislative instrument.
The Scrutiny of Bills Committee queried the proposed
interaction of the exception in proposed subsection 70.5A(5) and the
guidance that the Minister will publish under proposed section 70.5B:
... It is not clear whether a body corporate that complies with
guidance published by the minister would be determined to have 'adequate
procedures' in place and therefore able to establish the defence in subsection
70.5A(5), or if a body corporate could comply with such guidelines but still be
found by the courts to not have had adequate procedures in place.
The committee is concerned that, because the exception to the
offence does not clearly articulate what would constitute 'adequate
procedures', it has been left to ministerial guidance to clarify the limits of
criminal liability with respect to the offence. This concern is compounded by
the fact that the guidance will not be a legislative instrument.[52]
It requested the Attorney-General’s advice on whether it
is possible that a body corporate that complies with the guidance could still
be convicted of the proposed offence, and on why the guidance should not be in
the form of a legislative instrument and subject to disallowance.[53]
The Attorney-General advised that the guidance would be
principles-based rather than prescriptive:
It is reasonable to expect companies of all sizes to put in
place appropriate and proportionate procedures to prevent bribery from
occurring within their business. However, the application of steps to prevent
foreign bribery will differ substantially from corporation to corporation ...
It is for this reason that I propose to provide guidance,
rather than a legislated, prescriptive checklist of compliance. In this way, it
will not be for Government to determine or clarify the limits of criminal
liability with respect to the offence. This is appropriately a matter for
courts, taking into account the circumstances of each case without the
encumbrance of rigid statutory requirements.[54]
The Scrutiny of Bills Committee was satisfied with the
Attorney-General’s response and requested that the information he provided be
incorporated into the Explanatory Memorandum.[55]
Policy
position of non-government parties/independents
At the time of writing this Bills Digest, the position of
the non-government parties and independents was not known. However, members of
the Senate Economics Reference Committee included non-government party
representation and independents and that Committee’s recommendations supported,
amongst other matters, the creation of a new foreign bribery offence and the
deferred prosecution agreement scheme.[56]
Further, the non-government members of the L&C Committee recommended that
the Bill be passed.[57]
Position of
major interest groups
The positions taken by stakeholders in submissions to the
L&C Committee’s inquiry into the Bill are summarised below. Further detail
is set out in the ‘Key issues and provisions’ sections of the Digest.
Foreign bribery reforms
New corporate offence of failing to prevent bribery
The proposed new corporate offence of failing to prevent
bribery was supported by the Uniting Church, the International Bar Association
(IBA), Dr Vivienne Brand (of the College of Business, Government and Law at
Flinders University), and the law firm Morgan, Lewis and Bockius.[58]
The Australian Institute of Company Directors (AICD) had
‘serious reservations’ about the offence.[59]
Similarly, the Law Council of Australia (LCA) recommended that the offence be
‘reconsidered given a number of problematic features of the offence’.[60]
However, the LCA noted that a minority among the members of the Foreign Corrupt
Practices Committee of its Business Law Section supported the enactment of the
offence.[61]
Professor Simon Bronitt and Zoe Brereton (of the TC Beirne
School of Law at the University of Queensland) considered that there are
‘strong reasons to support’ the offence, but raised concerns about the
application of absolute liability and the potential for the offence to become
the ‘default’ offence used in all foreign bribery prosecutions.[62]
Reforms to the existing foreign bribery offence
The Uniting Church supported all of the proposed reforms
to the existing foreign bribery offence.[63]
These reforms were also supported by the LCA, AICD and the IBA, except:
- the
LCA, AICD and the IBA recommended that the current test of a benefit being ‘not
legitimately due’ should be replaced by a ‘dishonesty’ test instead of the
proposed amendment, under which the offence would apply if a benefit is offered
or provided to another person with the intent to ‘improperly influence’ a
foreign public official and
- the
LCA suggested an alternative amendment to that proposed for expanding the
offence to cover bribery of foreign public officials in relation to actions
outside of the official’s authority.[64]
Additional suggested reforms
The Uniting Church recommended that the Bill be amended to
include an additional foreign bribery offence based on recklessness (the
existing offence requires proof of intention).[65]
The enactment of such an offence was among the proposed reforms in the
Government’s April 2017 consultation paper, but has not been included in
the Bill.[66]
AGD’s submission to the L&C Committee outlined some of the considerations
behind the decision not to proceed with such an offence:
The AFP and CDPP [Common wealth Director of Public
Prosecutions] support the creation of such an offence, noting that it would
effectively capture instances of wilful blindness by suspects, including senior
company officers (such as directors). Most foreign bribery cases involve bribes
paid by third parties in circumstances where the suspects (individuals and
companies) are wilfully blind as to the activities of their agents (including
employees, subsidiaries and third party agents). While the offence of failing
to prevent foreign bribery would go some way to addressing this scenario, it is
possible that companies and individuals may still be able to structure their
affairs in ways which allow them to limit or avoid exposure to criminal
liability for conduct that should be criminalised.
...
After balancing these arguments against other views expressed
in submissions received in response to the April 2017 discussion paper, the
Government elected not to proceed with a recklessness offence.
A number of submissions received in response to the 2017
discussion paper raised concerns that the offence would set too low a standard
for culpability ...
Submissions also identified that a recklessness offence would
be inconsistent with international standards ...[67]
The LCA and the IBA supported that offence being omitted
from the Bill.[68]
The Uniting Church also suggested enactment of an
additional offence criminalising the paying of bribes to third parties in order
to win government contracts overseas, ‘such as bribing a competitor to put in
an uncompetitive bid for the contract’.[69]
Morgan, Lewis and Bockius recommended the repeal of the
‘facilitation payments’ defence to the foreign bribery offence.[70]
As noted above, the majority of the Senate Standing Committee on Economics
recommended the repeal of this defence in its March 2018 report on foreign bribery.
Deferred prosecution agreements
The Uniting Church supported the introduction of a DPA
scheme, seeing DPA’s as part of a suite of measures needed to deter, detect and
prosecute corporate criminal behaviour with additional measures being
whistleblower protection and reward in the private sector, a public beneficial
ownership register and making it easier to for law enforcement agencies to
prosecute money laundering offences. However, the Uniting Church did note there
is reason to be cautious about the introduction of a DPA scheme and it should be
subject to a review in five years’ time to assess its effectiveness.[71]
The Australian Institute of Company Directors recommended an
amendment so that ‘determinations of a material contravention of a DPA by the Director
of the CDPP are subject to merits review. It is in the interests of fairness
and justice that a mechanism exists to confirm that determinations are correct
and preferable’.[72]
The Law Council of Australia, whilst broadly supportive of
the proposed scheme recommended:
- a
comprehensive program of education in relation to the finalised DPA scheme
should be undertaken
- the
Australian Government should further investigate means by which a Commonwealth
DPA could also resolve breaches of state and territory laws
- the
Australian Government should consider, and if necessary address whether the
CDPP and the AFP have the full range of skills and experience to engage in
corporate negotiation and compromise
- the
DPA scheme should include a delay of the limitation period in respect of any
related civil proceedings that arise out of the offending conduct
- independent
corporate monitors should be engaged in appropriate cases. Where a monitor is
engaged, consideration needs to be given to the need for confidentiality of their
reports and findings. These reports should be confidential and not publicly
available, unless required in proceedings for a breach of the DPA; and
- the
DPA scheme could also include a process for resolving disputes, including having
an independent third party determine whether there has been a material breach
of a DPA.[73]
Other stakeholders supported the creation of a new foreign
bribery offence and the deferred prosecution agreement scheme in responses to
the Government’s consultation papers in 2016 and 2017.[74]
Financial
implications
The Explanatory Memorandum states that the Bill is
‘unlikely to have a significant impact on consolidated revenue’, but notes:
- removing
impediments to successful prosecutions for foreign bribery may result in
increased recovery of penalties for the offence and
- costs
incurred by Commonwealth agencies as a result of the DPA process in Schedule 2
will be absorbed by these agencies. There will be other costs for the party to
a DPA by way of financial penalties or compensation to Commonwealth agencies
associated with the negotiation and administration of a DPA. DPAs may lead to
the recovery of penalties in cases that may not have proceeded to prosecution.[75]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[76]
Parliamentary Joint Committee on Human Rights
The Parliamentary Joint Committee on Human Rights
considers that the Bill does not raise any human rights concerns.[77]
Key
issues and provisions: foreign bribery (Schedule 1)
Division 70 of the Criminal Code criminalises
providing, offering or promising to provide, or causing a benefit to be
provided to another person, with the intention of influencing a foreign public
official in the exercise of his or her duties, in order to obtain or retain
business, or a business advantage, that is not legitimately due to the
recipient or intended recipient. Currently, the main provisions are sections
70.1 (definitions), 70.2 (offence), and 70.3 and 70.4 (defences). Schedule 1
of the Bill will amend section 70.1, repeal and replace the offence in
section 70.2 to make several amendments to it, amend the lawful conduct
defence in section 70.3 and insert proposed subsection C,
which will include the proposed new corporate offence of failing to prevent
foreign bribery and related provisions.
Expanding the definition of foreign public official to
include candidates for office
Foreign public official is defined in
section 70.1 of the Criminal Code. Item 4 of Schedule 1
will insert proposed paragraph (m) to expand that definition to also
include ‘an individual standing, or nominated, (whether formally or informally)
as a candidate to be a foreign public official’ covered by any of the existing
categories of foreign public official listed in paragraphs (a) to (k) of
the definition. These include, for example, an employee of a foreign government
body, a member of the executive or the judiciary, a member or officer of the
legislature of a foreign country or part thereof, and an employee of a public
international organisation. The Explanatory Memorandum states that law
enforcement experience indicates that bribes may be offered to candidates for
public office with the intent of obtaining an advantage after the candidate
takes office.[78]
This amendment will implement recommendation 5 of the Senate
Standing Committee on Economics’ report on foreign bribery.
Subsection 70.3(1) sets out the ‘lawful conduct’
defence to the foreign bribery offence in section 70.2. Broadly, the
defence provides that a person does not commit the offence of foreign bribery
if a written law in force where a person’s conduct occurred required or
permitted the provision of the benefit in question. Item 7 will
insert proposed subsection 70.3(2A) to establish a new defence that
is similar to the existing defence in subsection 70.3(1), but which will
apply in relation to conduct related to candidates to be foreign public
officials. As with the existing defences, a defendant wishing to rely on the
new defence in proceedings for a foreign bribery offence will bear an
evidential burden in relation to the matter (which would require adducing or
pointing to evidence that suggests a reasonable possibility that the matter
exists).
Other amendments to the existing foreign bribery offence
Item 6 of Schedule 1 will repeal
existing section 70.2 and replace it with proposed sections 70.2 and
70.2A. The key differences between the existing offence and the new
provisions are that the offence will:
- apply
where a benefit is offered or provided to another person with the intent to
‘improperly influence’ a foreign public official (see further below), instead
of the benefit being ‘not legitimately due’ to the person and intended to
influence a foreign public official[79]
- not
be limited to instances where a benefit is offered or provided with the intent
to influence a foreign public official in the exercise of the official’s
duties[80]
- also
apply where a personal (as opposed to business) advantage is sought (this will
implement recommendation 6 of the Senate Standing Committee on
Economics’ report on foreign bribery)[81]
- more
clearly apply where an advantage is sought for someone other than the person
providing or offering a benefit (this will implement the first part of recommendation
10 of the Senate Standing Committee on Economics’ report on foreign
bribery) and[82]
- apply
regardless of whether the person offering the benefit intends to obtain or
retain specific business or a specific advantage (this will implement the second
part of recommendation 10 of the Senate Standing Committee on Economics’
report on foreign bribery).[83]
The maximum penalties that apply to individuals and bodies
corporate will remain unchanged.[84]
Proposed section 70.2A will provide that the
determination of whether influence is improper is a matter for the trier of
fact, and provide guidance on matters relevant to that determination. Proposed
subsection 70.2A(2) will lists matters that must be disregarded,
specifically:
- the
fact that the benefit (or the offer or promise to provide the benefit) may be,
or be perceived to be, customary, necessary or required in the situation
- any
official tolerance of the benefit and
- if
particular business or a particular advantage is relevant to proving the
offence, the fact that the value of the business or advantage is insignificant
(if that was the case), any official tolerance of an advantage, and the fact
that an advantage may be customary, or perceived to be customary, in the
situation.
These matters are equivalent to those that must currently
be disregarded in determining whether a benefit or business advantage is ‘not
legitimately due’ under subsections 70.2(2) and (3).
Proposed subsection 70.2A(3) will provide a
non-exhaustive list of matters to which a trier of fact may have regard
in determining whether influence is improper, such as the recipient or intended
recipient of the benefit, the nature of the benefit, and whether the benefit
was provided, offered or promised dishonestly. A trier of fact may also have
regard to matters not specifically listed (proposed subsection 70.2A(4)).
Improper influence
Several stakeholders raised concerns with the concept of
improper influence in submissions to the L&C Committee’s inquiry into the
Bill. Consistent with their earlier submissions to AGD on the consultation
paper and exposure draft provisions, the LCA, IBA and AICD each submitted that
the current test of a benefit being ‘not legitimately due’ should instead be
replaced by a ‘dishonesty’ test.[85]
The LCA considered that the ‘novel and undefined’ concept of improper influence
will introduce complexity and further uncertainty about the scope of the
foreign bribery offence:
In contrast, the concept of 'dishonesty' is well-established
and understood in Australian criminal law. The definition in Chapter 7 of the
Criminal Code encompasses both a subjective and objective test, which would
permit a trier of facts to make well-informed decisions with respect to the factual
circumstances surrounding allegations of foreign bribery. Moreover, the concept
of 'dishonesty' already applies to a range of other criminal offences,
including the domestic bribery provisions in Division 141 of the Criminal Code.
Accordingly, introducing this concept in relation to the foreign bribery
offence would serve to harmonise the language of the bribery offences in the
Criminal Code and provide greater certainty as to the operation of the
provisions.[86]
Morgan, Lewis and Bockius suggested that consideration be
given to including a high level definition of what constitutes improper
influence in the Bill.[87]
AGD’s submission to the L&C Committee’s inquiry into
the Bill noted that submissions it received on the consultation paper and
exposure draft provisions were divided on the issue.[88]
It provided the following rationale for preferring the concept of improper
influence to dishonesty:
The Department, AFP and CDPP have closely considered the
points raised in submissions. On balance, the Department considers that the
proposed approach of ‘improper influence’ is preferable. Some bribery does not
involve dishonesty. For instance, where a company provides an open
‘scholarship’ to the child of a foreign public official. The scholarship is not
necessarily intended to have a ‘dishonest’ influence, if it is done
transparently. However, it could still be done with the intention of improperly
influencing the foreign public official in favouring the company when business
is being awarded. The UK Law Commission has observed that not all bribes are
‘dishonest’ in the sense required. An advantage conferred may be ‘illegitimate,
unreasonable, disproportionate or otherwise “improper” without being
dishonest’. Proposed subsection 70.2A(3) of the Bill details matters that a
trier of fact may have regard to when determining whether influence is improper
(the list is non-exhaustive). These matters are based on the experience of
foreign bribery investigators and prosecutors, and provide the trier of fact
with relevant factors on which to inform his or her determination.[89]
Whether a benefit was offered or given dishonestly is
among the listed matters in proposed subsection 70.2A(3) to which a
trier of fact may have regard in determining whether influence is improper.
Removing the requirement of influencing a foreign public
official in the exercise of the official’s duties
As noted above, the Bill would amend the foreign bribery
offence so that it is not limited to instances where a benefit is offered or
provided with the intent to influence a foreign public official in the
exercise of the official’s duties. The LCA suggested that instead of simply
omitting this requirement, the approach taken in the Bribery Act 2010
(UK) might be preferable.[90]
Subsection 6(4) of that Act provides that references to influencing a
foreign public official in the performance of his or her functions as such an
official include any omission to exercise those functions and any use of the
official’s position as such an official, even if not within official’s authority.[91]
New corporate offence of failing to prevent foreign
bribery
Item 8 of Schedule 1 will insert
proposed proposed subsection C of Division 70, which will
include the proposed new corporate offence of failing to prevent foreign
bribery and related provisions. As noted above, these provisions are similar to
those introduced in the UK in 2010, and would implement recommendation 7
of the Senate Standing Committee on Economics’ report on foreign bribery.
Proposed subsection 70.5A(1) will create a new
offence of failing to prevent bribery of a foreign public official that will
apply to a body corporate if:
- the
body corporate is a constitutional corporation, is incorporated in a Territory,
or is taken to be registered in a Territory under section 119A of the Corporations
Act 2001 (proposed paragraph 70.5A(1)(a))
- an
associate of the body corporate commits an offence against
section 70.2 or engages in conduct outside Australia that, if engaged in
in Australia, would constitute an offence against section 70.2 (proposed
paragraph 70.5A(1)(b)) and[92]
- the
associate does so for the profit or gain of the first person (proposed
paragraph 70.5A(1)(c)).
Item 2 will insert a definition of associate
into section 70.1. A person will be an associate of another person if the
first-mentioned person:
- is
an officer, employee, agent or contractor of the other person
- is
a subsidiary of the other person (within the meaning of the Corporations Act)
or
- otherwise
performs services for or on behalf of the other person.
The Explanatory Memorandum notes that ‘profit or gain’
will not be defined and provides an example of what is intended to be captured
by the inclusion of this element of the offence:
It is intended these are broad concepts, in particular gain
could include any sort of benefit or advantage to the body corporate. For
example, it is intended to cover the situation where a company benefits merely
because it is the beneficial owner of a subsidiary company that commits the
foreign bribery offence.[93]
Proving the offence
Absolute liability will apply to certain elements of the proposed
offence (proposed subsection 70.5A(2)). This will mean that the
prosecution will not be required to prove fault with respect to the body
corporate (such as proving that the body corporate knew about or was reckless
as to the associate’s conduct), and that the body corporate will not be able to
raise a defence of mistake of fact.[94]
Further, a body corporate may still be convicted of an offence against proposed
subsection 70.5A(1), even if the associate has not been convicted of an
offence against section 70.2 (foreign bribery) (proposed
subsection 70.5A(3)).
However, to establish the proposed failure to prevent
offence, the prosecution will need to prove that the associate committed an
offence against section 70.2 (or engaged in conduct outside Australia that, if
engaged in in Australia, would constitute an offence against section 70.2),
including establishing the fault elements that make up that offence.[95]
This would include establishing that the associate provided or offered a
benefit, or caused the provision or offer of a benefit, with the intention
of improperly influencing a foreign public official. It is possible that the prosecution
may find it difficult in practice to prove beyond reasonable doubt that an
associate, who may not have any connection with Australia, has engaged in
conduct outside Australia that would constitute an offence in Australia, and
did so for the profit or gain of the first person.
The Explanatory Memorandum includes justification for the
application of absolute liability to elements of the proposed offence:
In this case, applying absolute liability to the above
elements of the new offence is necessary to ensure the effectiveness of the new
offence and the enforcement regime. This would ensure that the offence operates
as intended, where the only way to avoid liability for the body corporate to
avoid liability is by having adequate procedures in place, as explained further
below. This is necessary to overcome challenges in establishing liability of
corporate entities for foreign bribery, and to ensure that companies are not
able to avoid possible liability through wilful blindness. The application
of absolute liability to paragraph 70.5A(1)(a) is necessary as this aspect
of the offence is a jurisdictional element. It is not appropriate to permit the
defence of mistake of fact to the offence elements in paragraph 70.5A(1)(b). It
is sufficient that the fault elements of the underlying conduct by the
associate described in those subparagraphs would still need to be established
by the prosecution.[96][emphasis
added]
While a body corporate will not be able to raise a defence
of mistake of fact, there is a specific exception to the offence of adequate
procedures (outlined below) and a body corporate would still be able to raise
other general defences provided for in the Criminal Code (except that a
defence of intervening conduct or event will not be available if that conduct
or event was brought about by an associate of the body corporate).[97]
Exception: adequate procedures
Proposed subsection 70.5A(5) will provide for
an exception to the proposed new offence. The offence will not apply if the
body corporate can prove that it had adequate procedures in place designed to
prevent the commission of an offence against section 70.2 by any associate
and to prevent any associate engaging in conduct outside Australia that, if
engaged in in Australia, would constitute an offence against section 70.2.
A body corporate will bear a legal burden in relation to this exception,
meaning it will need to prove the matter to the standard of the balance of
probabilities.[98]
While the Minister will publish guidance on the steps that
bodies corporate can take to prevent an associate from bribing foreign public
officials (see below), it will be up to a court to determine on a case-by-case
basis whether a body corporate had adequate procedures in place. AGD stated
that it expects the concept will be scalable, ‘depending on the relevant
circumstances including the size of the body corporate and the nature of its
business activities’.[99]
The Attorney-General considered that ‘companies with effective and well
integrated compliance regimes would not be convicted of the failure to prevent
foreign bribery offence’.[100]
Penalty
The maximum penalty for the proposed new offence will be
the equivalent to that which currently applies to bodies corporate for the
offence of foreign bribery under section 70.2. Proposed
subsection 70.5A(6) will provide that the maximum penalty is a fine not
more than the greatest of:
- 100,000
penalty units (currently $21 million)[101]
- three
times the value of the benefit that the associate obtained directly or
indirectly, and that is reasonably attributable to the conduct constituting the
offence (or that would have constituted the offence) against section 70.2 (if
the court can determine that value) or
- ten
per cent of the annual turnover of the body corporate in the 12 months ending
at the end of the month in which the associate committed, or began committing,
the offence (or notional offence) against section 70.2 (if the court
cannot determine the value of the benefit).[102]
Issues with the proposed offence
Some stakeholder submissions to the L&C Committee’s
inquiry into the Bill raised concerns with the proposed new offence of failing
to prevent foreign bribery. The Scrutiny of Bills Committee did not make a
comment about the application of absolute liability.
Application of absolute liability/associate engaging in
conduct for the profit or gain of the body corporate
The LCA, AICD, and Bronitt and Brereton raised concerns
about the application of absolute liability to elements of the proposed
offence. The AICD and Bronitt and Brereton raised general objections to the use
of absolute liability in the offence and did not consider that it had been
adequately justified. The AICD stated:
... in the absence of demonstrating adequate procedures to
prevent foreign bribery of associates, a corporation will be liable under s
70.5A without the need for the prosecution to establish any culpability on the
part of the corporation. Legislative use of ‘absolute liability’ requires
strong justification and should only occur in limited circumstances. Given the
seriousness of the proposed offence, its broad application, and the potential
penalty and stigma of a conviction, the application of absolute liability to
the offence is not adequately justified.[103]
Bronitt and Brereton considered that the application of
absolute liability will mean that distinctions between more and less culpable conduct
will be lost:
A corporation may fail to implement adequate procedures to
prevent foreign bribery due to inadvertence, carelessness or ineptitude, but
equally it may fail to prevent foreign bribery intentionally, knowingly,
recklessly or dishonestly. Framed as a form of absolute liability, the FPFB
offence is a blunt ‘catch all’ provision that does not differentiate between
different degrees of corporate culpability.[104]
The LCA was concerned specifically with the application of
absolute liability to the element of the proposed offence that the associate
engaged in the conduct for the profit or gain of the body corporate (proposed
paragraph 70.5A(1)(c), emphasis added). The LCA was concerned that it
is not clear exactly what would need to be proved for the offence to be made
out, and how that would be done:
The primary offence does not require that the associate does
so for the profit or gain of the first person (the body corporate charged with
the failing to prevent offence). Therefore, the circumstance of the
associate doing so for the profit or gain of the first person is likely to be a
contested matter. Further, proposed subsection 70.5A would allow a body
corporate to be convicted because of the commission by the associate of a
primary offence even if the associate has not been convicted of that offence.
If the associate is not convicted of the offence, absolute liability should not
apply to the corporation because mens rea will need to be proved on
the part of the associate under paragraph 70.5A(1 )(c); it is not clear how
this could be proved.[105][bold
emphasis added]
Placing of a legal burden on the defendant to establish
the adequate procedures exception
The LCA and the AICD did not consider it appropriate that
the onus of proof be reversed in relation to establishing that a body corporate
had adequate procedures in place to prevent foreign bribery. They both argued
that if this matter is to be cast as an exception instead of as an element of
the offence, that the defendant should bear only an evidential burden (which
would require adducing or pointing to evidence that suggests a reasonable possibility
that it had adequate procedures in place[106])
instead of the proposed legal burden.[107]
Definition of associate
The LCA and the AICD were concerned that the definition of
associate is too broad.[108]
The AICD considered that the proposed definition could expose Australian
corporations to ‘a serious risk of prosecution for the conduct of persons with
which they have an association but not necessarily any actual or effective
influence or control over’.[109]
Conversely, the IBA considered that the definition may be too narrow:
[the term] should clearly and unambiguously capture conduct
by an[y] natural or incorporated person, including any association
(incorporated or unincorporated) or persons operating through a trust or any
other structure designed or created to facilitate the relevant conduct in a
manner to shield others from potential liability ... the question of whether the
payer of the bribe performs services on behalf of a company should be
determined by reference to all the relevant circumstances rather than what
appears to be an exclusive list.[110]
Potential for the new offence to become the default for
foreign bribery prosecutions
The AICD and Bronitt and Brereton expressed concern that
the features of the proposed offence outlined above could mean that it will
become the default or ‘go to’ offence for foreign bribery. The AICD considered
that such an outcome would be ‘particularly problematic and unjust’ given it
will carry the same maximum penalty as the existing foreign bribery offence but
‘does not require proof of fault on the part of the corporation’.[111]
Bronitt and Brereton raised concerns about the potential combined impacts of
the proposed offence and the introduction of DPAs:
As a broad ‘fallback’ offence, the FPFB offence is likely to
assume a key role in DPA negotiations in foreign bribery cases. It is vital
that negotiations over foreign bribery allegations do not inappropriately
divert away from criminal prosecution cases of serious bribery (determined by
assessing blameworthiness and harm) that would properly merit investigation,
prosecution and punishment through the criminal justice system.[112]
Jurisdictional scope
Proposed subsection 70.5A(7) will provide that
section 15.1 of the Criminal Code (extended geographical
jurisdiction—category A) applies to the proposed new offence. One of the
circumstances this will capture is where the conduct constituting the alleged
offence occurs wholly outside Australia and the person is a body corporate
incorporated by or under an Australian law.[113]
Morgan, Lewis and Bockius suggested that jurisdiction should be expanded to
also include corporations ‘carrying out business in Australia’. This would
mirror the jurisdictional reach of the equivalent offence in the Bribery Act
2010 (UK).[114]
Guidance on preventing foreign bribery
Proposed subsection 70.5B will require the
Minister to publish guidance on the steps that bodies corporate can take to
prevent an associate from bribing foreign public officials, and provide that
such guidance is not a legislative instrument. The Government stated that the
guidance will be principles-based, and designed to be applicable to
corporations of different sizes and operating in different sectors.[115]
The Attorney-General stated:
It is reasonable to expect companies of all sizes to put in
place appropriate and proportionate procedures to prevent bribery from occurring
within their business. However, the application of steps to prevent foreign
bribery will differ substantially from corporation to corporation—I do not
consider it reasonable to expect small and medium-sized enterprises to put in
place a compliance program of the same size that would be required of a large
multi-national company. Similarly, a corporation with limited exposure to
foreign bribery risk should not be expected to take mitigation measures as
extensive as another corporation that has a significantly greater risk profile.[116]
The Government also stated that the guidance will be
broadly consistent with the guidance the UK Government has published in
relation to section 9 of the Bribery Act 2010 (UK):
This is in line with the preference Australian industry has
expressed and will enable Australian companies that have already framed their
anti-bribery policies on international guidelines to easily incorporate
additional policies relevant to the Australian context.[117]
It committed to consult
publicly on the guidance and review and incorporate stakeholder feedback.[118]
The Senate Standing Committee on Economics recommended:
- the
Government publish an exposure draft of the guidance and allow a period of no
less than four weeks for stakeholders to comment
- the
guidance be published with sufficient time before the commencement of the
proposed failing to prevent bribery offence to allow corporations to implement
necessary compliance measures and
- the
guidance should include the existence of internal corporate whistleblowing
systems.[119]
Key issues
and provisions: deferred prosecution agreements (Schedule 2)
On 8 December 2017, the CDPP and AFP created the Best
Practice Guidelines on Self-Reporting of Foreign Bribery and Related Offending
by Corporations.[120]
This will complement the framework in the Bill for a Deferred Prosecution
Agreement scheme.
Schedule 2 of the Bill establishes a Commonwealth
Deferred Prosecution Agreement (DPA) scheme. The DPA scheme will allow the CDPP
to invite a person (not an individual) that has engaged in serious corporate
crime to negotiate an agreement to comply with a range of specified conditions.
If those conditions are complied with, it will not
subsequently be prosecuted in relation to the offences specified in the DPA. A
breach of the terms of a DPA may result in the CDPP commencing prosecution or
renegotiating the terms of the DPA with the person.
Part 1 of Schedule 2 will make amendments to
the Director of Public Prosecutions Act 1983 (DPP Act) including
inserting a new function of the Director, in section 6 of the Act. Item 4
will insert new paragraph 6(1)(fb) to allow the Director to negotiate,
enter into, and administer, on behalf of the Commonwealth, deferred prosecution
agreements. Similarly, section 9 of the Act will be amended, by item 5,
to authorise the Director to have the power to enter into a DPA and do all things
necessary of convenient to be done for or in connection with negotiation,
entering into or administering, a DPA.
Deferred Prosecution Agreement Scheme
Item 7 will insert into the DPP Act a new
Part 3 consisting of proposed sections 17A-17L to outline the
operation of the Deferred Prosecution Agreement Scheme.
Proposed section 17A will give the Director (of
Public Prosecutions) the discretion to enter into an agreement for an offence
mentioned in section 17B that is specified in the agreement. Under proposed
subsection 17A(2) criminal proceedings must not be instituted against the
person in relation to an offence specified in the agreement approved under
section 17D. However, if the Director is satisfied that there has been a
material contravention of the agreement or the person knowingly provided
inaccurate, misleading or incomplete information to a Commonwealth entity in
connection with the agreement, then subsection (2) does not apply (proposed subsection 17A(3).
Proposed section 17B is a key provision outlining,
in a table, when a DPA may be entered into in relation to the offence against prescribed
provisions. The Government proposes that an Australian DPA scheme should apply
to a similar set of offences as those covered by the UK scheme. In its 2017 consultation
paper, the Attorney-General’s Department stated:
Accordingly, we propose that DPAs be made available to
corporations in the context of the following crime types:
- fraud
- false
accounting
-
foreign bribery
- money
laundering
-
dealing with proceeds of crime
-
forgery and related offences
-
exportation and/or importation of prohibited or restricted goods
-
specific offences under the Corporations Act, and
- any ancillary offence relating to an offence to
which the DPA scheme explicitly applies.[121]
The table in proposed section
17B reflects this with offences listed under the Anti-Money Laundering
and Counter-Terrorism Financing Act 2006, Autonomous Sanctions Act 2011,
Charter of the United Nations Act 1945, Corporations Act 2001, and the Criminal
Code Act 1995.
Other provisions outline the content, approval and terms
of a DPA (proposed sections 17C, 17D, 17E and 17F) and also include a
limitation on the admissibility in proceedings of specific documents that are
likely to be generated or provided to Commonwealth agencies during the course
of DPA negotiations, and/or, in compliance with a DPA (proposed section 17H).
This is to ‘encourage a person who is negotiating, or considering negotiating,
a DPA to engage in full and frank discussions with the CDPP. To encourage a
person to engage openly and honestly in negotiations, these protections apply
regardless of whether the DPA negotiations ultimately results in a DPA.’[122]
Proposed section 17J will create a new offence if a
book, document or thing is relevant to negotiating or complying with a DPA and
a person (intentionally) causes that book, document or thing to be prevented
from being used in negotiating, complying or as relevant evidence relating to
the DPA. The penalty for an individual is five years imprisonment or 300
penalty units, or both. For a body corporate, the penalty for this offence of
destroying evidence is 5, 000 penalty units ($1,050,000).
As noted above the L&C Committee inquired into the
Bill and in its report of 20 April 2018, it recommended that the Bill be
passed. In relation to the proposed DPA Scheme, the Committee recommended that
as part of public consultation on the draft Deferred Prosecution Agreement Code
of Practice, the government consider publishing an exposure draft which allows
corporate stakeholders a four week period to provide comment.[123]
The Government has noted that it ‘will consult publicly on proposed guidance
material detailing how the scheme operates in early 2018’.[124]
While there are proposed mandatory conditions for DPAs in
the Bill, Senator Rex Patrick made some Additional Comments in the L&C
Committee’s report on the Bill, that ‘we need to avoid the possibility of a
controversy within the CDPP because of ‘secret’ DPAS. We do not want to be
establishing an independent assurance of DPAs program in the years to come.’[125]
Senator Patrick further recommended that the discretion that the Director has
to publish a version of a DPA that does not disclose the name of the person,
should be removed (proposed subsection 17D(8)).[126]
Other provisions
In Part 2 of Schedule 2, Item 14 will make an amendment
to the Income Tax Assessment Act to ensure that any loss or outgoing
incurred by a corporation under a term of a DPA is not deductible under the Income
Tax Assessment Act.
Further, in Part 3, amendments made to the Administrative
Decisions (Judicial Review) Act will provide that that Act does not apply
to decisions made under Part 3 of the DPP Act. Therefore, judicial
review will not be available for decisions including the Director’s decision to
enter into a DPA (proposed section 17A), not to publish or vary a DPA (proposed
section 17D and 17F) and related decisions. The Explanatory
Memorandum justifies the exemption on a number of grounds, including the voluntary
nature of a party’s participation in the DPA scheme and the availability of
traditional law enforcement mechanisms as an alternative to the DPA process.[127]
Item 17 of Part 3 to Schedule 2 will amend the
sentencing consideration provisions in the Crimes Act by inserting proposed
paragraph 16A(2)(fa) to require, at the time of sentencing, a court to
consider the fact that a person entered into a DPA in relation to the offence
and the extent to which the person complied, or failed to comply, with the
terms of the DPA. The Explanatory Memorandum says that ‘this provision allows a
court to impose a sentence that reflects the extent to which, if at all, the
corporation maliciously exploited the DPA process to avoid prosecution’.[128]
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
[1]. Convention
on Combating Bribery of Foreign Officials in International Business
Transactions, opened for signature 17 December 1997, ATS
[1999] No. 21 (entered into force for Australia
17 December 1999).
[2]. C Barker,
Australia’s
implementation of the OECD Anti-Bribery Convention, Background note,
Parliamentary Library, Canberra, 7 February 2012.
[3]. For
Securency and NPA see: Australian Federal Police (AFP), Foreign
bribery charges laid in Australia, media release,
1 July 2011; AFP, Further
charges laid in foreign bribery investigation, media release,
10 August 2011; N McKenzie and R Baker, ‘Printing
man on bribery charges’, The Age, 13 September 2011,
p. 3; AFP, Further
changes laid in foreign bribery investigation, media release,
14 March 2013. Non-publication
orders in place in Victoria prohibit the publication of certain details of
these proceedings, including the outcomes of those that have concluded, in that
state.
For Lifese, see: AFP, Man
arrested for foreign bribery, media release,
20 February 2015; N McKenzie, R Baker and P Bibby, ‘Terrorist
link to bribery charges’, The Sydney Morning Herald,
21 February 2015, p. 4; S Dalzell, ‘Mamdouh
Elomar, father of IS fighter, to stand trial over alleged bribe to Iraqi
official’ ABC News (online), 30 June 2016; J Sturmer,
‘Mamdouh
Elomar, Ibrahim Elomar and John Jousif plead guilty to bribing foreign minister’,
ABC News (online), 10 July 2017.
[4]. Attorney-General’s
Department (AGD), Combatting
bribery of foreign public officials: proposed amendments to the foreign bribery
offence in the Criminal Code Act 1995, AGD, April 2017; Crimes
Legislation Amendment Bill 2017: Exposure Draft.
[5]. AGD,
Combatting
bribery of foreign public officials: proposed amendments to the foreign bribery
offence in the Criminal Code Act 1995, op. cit., p. 1.
[6]. T
Edmonds, Bribery
Bill [HL]: Bill No 69, Research paper 10/19, United Kingdom Parliament
website, 1 March 2010.
[7]. Bribery Act 2010
(UK), section 7. ‘Associated person’ is defined in section 8.
[8]. Ministry
of Justice (UK), The
Bribery Act 2010: Guidance about procedures which relevant commercial
organisations can put into place to prevent persons associated with them from
bribing, Ministry of Justice, 2011.
[9]. R
Amaee (Serious Fraud Office (SFO)), World
Bribery and Corruption Compliance Forum, speech,
14 September 2010. See also V Robinson (General Counsel, SFO), Bribery
Bill and anti-corruption: breakfast seminar with Grant Thornton,
speech, 10 November 2009.
[10]. SFO,
Sweett
Group PLC sentenced and ordered to pay £2.25 million after Bribery Act
conviction, media release, 19 February 2016. The amount
comprised a fine of £1.4m and confiscation of £851,152.23: SFO, ‘Sweett Group’ SFO
website, 12 May 2016.
[11]. SFO,
‘Standard Bank PLC’,
SFO website, 1 June 2016; SFO, SFO secures
second DPA, media release, 8 July 2016 (the second company
has not been named due to ongoing related legal proceedings).
[12]. O
Qureshi, A Wilkinson and I Fernandez, ‘UK’s
first consideration of the Bribery Act’s adequate procedures defence’, FCPA
Professor, Blog, 19 March 2018; J Ludlam, C Thomson and H Garfield, ‘UK:
“Adequate procedures” and self reporting under the spotlight as jury rejects
Section 7 defence’, Global Compliance News, 14 March 2018.
[13]. Organisation
for Economic Cooperation and Development (OECD) Working
Group on Bribery, Implementing the OECD Anti-Bribery Convention: phase 4
report: Australia, OECD, 2017.
[14]. Ibid.,
pp. 20–1, 32–3, 35, 57.
[15]. Ibid.,
pp. 57–9.
[16]. Ibid.,
p. 33.
[17]. G
Gooch and M Williams, A
dictionary of law enforcement, Oxford University Press, Oxford,
2015, accessed 2 March 2018.
[18]. AGD,
Improving
enforcement options for serious corporate crime: a proposed model for a
Deferred Prosecution Agreement scheme in Australia: public consultation paper,
AGD, Canberra, March 2017. See also, AGD, ‘Deferred Prosecution Agreements –
Discussion paper’, AGD, Canberra, March 2016.
[19]. AGD,
Improving
enforcement options for serious corporate crime: a proposed model for a
Deferred Prosecution Agreement scheme in Australia: public consultation paper,
op. cit., p. 3.
[20]. Ibid.,
p.6.
[21]. This
section draws heavily from the work of S Bronitt, ‘Regulatory
bargaining in the shadows of preventative justice: deferred prosecution
agreements‘, in T Tulich, R Ananian-Welsh, S Bronitt and S Murray, eds, Regulating
preventative justice: principle, policy and paradox, Routledge, Abingdon,
2017.
[22]. Crime
and Courts Act 2013 (UK), accessed 30 April 2018.
[23]. Crime
and Courts Act 2013 (UK) chapter 22, schedule 17, part 1, section
5(3)(a)—(g) quoted in S Bronitt, Regulatory bargaining in the shadows of
preventative justice, op. cit., pp. 213–4.
[24]. Crime
and Courts Act 2013 (UK) chapter 22, schedule 17, part 1, subsections 7(1),
8(1).
[25]. The
Serious Fraud Office and the Crown Prosecution Service (CPS) (UK), Deferred
prosecution agreements code of practice, CPS and SFO, London, 2014.
[26]. See
Part
2 – offence in relation to which a DPA may be entered into.
[27]. Ibid.,
p. 3.
[28]. Ibid.
[29]. Ibid,
pp. 6–7.
[30]. Serious
Fraud Office v Rolls Royce Holdings plc, Royal Courts of Justice, London,
17 January 2017, paragraph 20.
[31]. V
Comino, ‘The
adequacy of ASIC’s “tool kit” to meet its obligations under corporations and
financial services legislation’, Company and Securities Law Journal,
34(5), 1 August 2017, p. 374.
[32]. Speedy
Trial Act of 1974 18 USC subsection 3161(h)(2)(1974)(US); S Bronitt,
Regulatory bargaining in the shadows of preventative justice, op. cit., p 212.
[33]. E
Illovsky, ‘Corporate
Deferred Prosecution Agreements: the brewing debate’, Criminal Justice,
21(2), 2006, p. 36.
[34]. Ibid.
[35]. United
States of America, Department of Justice (DOJ), US
attorneys manual, principles of federal prosecution of business organizations,
DOJ; United States of America, Securities and Exchange Commission (SEC), Enforcement
manual, SEC.
[36]. AGD,
Improving
enforcement options for serious corporate crime: a proposed model for a
Deferred Prosecution Agreement scheme in Australia: public consultation paper,
op. cit.
[37]. Senate
Standing Committee on Legal and Constitutional Affairs, Report,
Inquiry into the Crimes Legislation Amendment (Combatting Corporate Crime) Bill
2017, The Senate, Canberra, 2018.
[38]. Senate
Standing Committee on Economics References Committee, Foreign
bribery, The Senate, Canberra, March 2018.
[39]. Recommendations 8
and 9 related to the consultation process and timing recommended for the
guidance. Recommendation 17 was that the guidance include the
existence of internal corporate whistleblowing systems: Ibid.,
pp. 83–4, 131.
[40]. Ibid.,
pp. 61–3, 67–83, 85–7.
[41]. The
Committee considered these amendments, but did not make recommendations on
them: Ibid., pp. 63–7, 84–7.
[42]. Senate
Standing Committee on Economics References Committee, Foreign
bribery, op. cit., pp. 161–2 (Recommendation 18).
The defence is set out in section 70.4 of the Criminal Code.
[43]. Ibid.,
p. 205. AusTrade explains
that facilitations payments are ‘customary, unofficial minor payments to secure
or speed a routine government action.’ Section 70.4 of the Criminal Code
outlines how a facilitation payment can be a defence to bribery, for example
where the value of the benefit was of a minor nature, the conduct was engaged
in for the sole or dominant purpose of expediting or securing the performance
of a routine government action of a minor nature and a record was made of the
conduct.
[44]. Ibid.,
p. 111.
[45]. Senate
Standing Committee on Legal and Constitutional Affairs, Report,
Inquiry into the Crimes Legislation Amendment (Combatting Corporate Crime) Bill
2017, The Senate, Canberra, 2018.
[46]. Senate
Standing Committee for the Scrutiny of Bills (Scrutiny of Bills Committee), Scrutiny
digest, 1, 2018, The Senate, 7 February 2018, pp. 17–20.
[47]. Criminal Code Act
1995 (Criminal Code), section 13.3.
[48]. Scrutiny
of Bills Committee, Scrutiny
digest, 1, 2018, op. cit., p. 18.
[49]. Ibid.;
AGD, A
guide to framing Commonwealth offences, infringement notices and enforcement
powers, AGD, Canberra, 2011, pp. 50–1.
[50]. Scrutiny
of Bills Committee, Scrutiny
digest, 3, 2018, The Senate, 21 March 2018, pp. 95–6.
[51]. Ibid.,
p. 96.
[52]. Scrutiny
of Bills Committee, Scrutiny
digest, 1, 2018, op. cit., pp. 19–20.
[53]. Ibid.,
p. 20.
[54]. Scrutiny
of Bills Committee, Scrutiny
digest, 3, 2018, op. cit., pp. 98–9.
[55]. Ibid.,
p. 100.
[56]. Senate
Standing Committee on Economics References Committee, Foreign
bribery, op. cit.
[57]. Senate
Standing Committee on Legal and Constitutional Affairs, Inquiry into the Crimes
Legislation Amendment (Combatting Corporate Crime) Bill 2017, Report,
op. cit. The non-government members of that Committee are Senator Louise
Pratt (ALP), Senator Murray Watt (ALP) and Senator Nick McKim (Australian
Greens).
[58]. Justice
and International Mission Unit, Synod of Victoria and Tasmania, Uniting Church
in Australia (Uniting Church), Submission
to Senate Standing Committee on Legal and Constitutional Affairs (L&C
Committee), Inquiry into the Crimes Legislation Amendment (Combatting
Corporate Crime) Bill 2017, 22 January 2018, pp. 4–5;
International Bar Association Anti-Corruption Committee (IBA), Submission
to L&C Committee, Inquiry into the Crimes Legislation Amendment
(Combatting Corporate Crime) Bill 2017, 23 January 2018,
p. 2; V Brand, Submission
to L&C Committee, Inquiry into the Crimes Legislation Amendment
(Combatting Corporate Crime) Bill 2017, 7 February 2018,
p. 1; Morgan, Lewis and Bockius LLP, Submission
to L&C Committee, Inquiry into the Crimes Legislation Amendment
(Combatting Corporate Crime) Bill 2017, 6 February 2018.
[59]. Australian
Institute of Company Directors (AICD), Submission
to L&C Committee, Inquiry into the Crimes Legislation Amendment
(Combatting Corporate Crime) Bill 2017, 8 February 2018,
pp. 2–5.
[60]. Law
Council of Australia (LCA), Submission
to L&C Committee, Inquiry into the Crimes Legislation Amendment
(Combatting Corporate Crime) Bill 2017, 9 February 2018,
p. 5 (see further pp. 7–9).
[61]. Ibid.,
p. 9.
[62]. S
Bronitt and Z Brereton, Submission
to L&C Committee, Inquiry into the Crimes Legislation Amendment
(Combatting Corporate Crime) Bill 2017, 14 March 2018, pp. 6–8.
[63]. Uniting
Church, Submission
to L&C Committee, op. cit., pp. 2–3.
[64]. LCA,
Submission
to L&C Committee, op. cit., pp. 5–7; AICD, Submission
to L&C Committee, op. cit., pp. 1–2; IBA, Submission
to L&C Committee, op. cit., pp. 2–3.
[65]. Uniting
Church, Submission
to L&C Committee, op. cit., p. 2.
[66]. AGD,
Combatting
bribery of foreign public officials: proposed amendments to the foreign bribery
offence in the Criminal Code Act 1995, op. cit., pp. 7–8.
[67]. AGD,
Submission
to L&C Committee, Inquiry into the Crimes Legislation Amendment
(Combatting Corporate Crime) Bill 2017, n.d., pp. 6–7.
[68]. LCA,
Submission
to L&C Committee, op. cit., p. 6; IBA, Submission
to L&C Committee, op. cit., p. 3.
[69]. Uniting
Church, Submission
to L&C Committee, op. cit., p. 3.
[70]. Morgan,
Lewis and Bockius LLP, Submission
to L&C Committee, op. cit.
[71]. Uniting
Church, Submission
to L&C Committee, op. cit., p. 9.
[72]. AICD,
Submission,
op. cit., p. 4.
[73]. LCA,
Submission
to L&C Committee, op. cit., pp. 10–11.
[74]. See
for example, the submissions
received by the Attorney-General’s Department in 2016. The submission to the
2017 consultation paper can be found here.
[75]. Explanatory
Memorandum, Crimes Legislation Amendment (Combatting Corporate Crime) Bill
2017, p. 4.
[76]. The
Statement of Compatibility with Human Rights can be found at page 6 of the Explanatory
Memorandum to the Bill.
[77]. Parliamentary
Joint Committee on Human Rights, Human
rights scrutiny report, 1, 6 February 2018, p. 78.
[78]. Explanatory
Memorandum, p. 12.
[79]. Proposed
paragraph 70.2(1)(b), replacing current paragraph 70.2(1)(b).
[80]. Current
paragraph 70.2(1)(c).
[81]. Proposed
paragraph 70.2(1)(b); current paragraph 70.2(1)(c).
[82]. Proposed
paragraph 70.2(1)(b); current paragraph 70.2(1)(c).
[83]. Proposed
paragraph 70.2(2)(b).
[84]. Proposed
subsections 70.2(3) and (4); current subsections 70.2(4) and (5).
[85]. LCA, Submission
to L&C Committee, op. cit., pp. 6–7; IBA, Submission
to L&C Committee, op. cit., pp. 2–3; AICD, Submission
to L&C Committee, op. cit., p. 2; LCA, Submission
to AGD, Proposed amendments to the foreign bribery
offence in the Criminal Code Act 1995, 8 May 2017,
pp. 2–3; IBA, Submission
to AGD, Proposed amendments to the foreign bribery offence in the Criminal
Code Act 1995, 26 April 2017, pp. 3–5; AICD, Submission
to AGD, Proposed amendments to the foreign bribery offence in the Criminal Code
Act 1995, 8 May 2017, pp. 4–5.
[86]. LCA,
Submission
to L&C Committee, op. cit., p. 7. See also IBA, Submission
to L&C Committee, op. cit., pp. 2–3; AICD, Submission
to L&C Committee, op. cit., p. 2.
[87]. Morgan,
Lewis and Bockius, Submission
to L&C Committee, op. cit.
[88]. AGD,
Submission
to L&C Committee, op. cit., p. 5.
[89]. Ibid.
Footnote references have been omitted from this quotation and can be viewed in
the source document.
[90]. LCA,
Submission
to L&C Committee, op. cit., p. 9.
[91]. Bribery Act
2010 (UK), subsection 6(4).
[92]. The
Explanatory
Memorandum, states that inclusion of conduct outside Australia that, if
engaged in in Australia, would constitute an offence against section 70.2
is intended to cover ‘situations where a subsidiary of a body corporate engages
in conduct abroad that would constitute the foreign bribery offence’
(p. 17).
[93]. Explanatory
Memorandum, p. 17.
[94]. Criminal Code,
section 6.2.
[95]. Explanatory
Memorandum, pp. 17–18.
[96]. Ibid.,
p. 18.
[97]. Proposed
subsection 70.5A(4) and sections 10.1 and 12.6 of the Criminal Code.
Defences of general application to Commonwealth criminal offences are set out
in Part 2.3 of the Criminal Code
[98]. Criminal Code,
sections 13.4 and 13.5.
[99]. AGD,
Submission
to L&C Committee, op. cit., p. 9.
[100]. Scrutiny
of Bills Committee, Scrutiny
digest, 3, 2018, op. cit., p. 99.
[101]. The
value of a penalty unit is set by section 4AA of the Crimes Act 1914,
and is currently $210.
[102]. Proposed
section 70.5C (equivalent to current subsection 70.2(6) and (7),
which will be repealed) will set out the meaning of annual turnover.
[103]. AICD,
Submission
to L&C Committee, op. cit., p. 3.
[104]. Bronitt
and Brereton, Submission
to L&C Committee, op. cit., p. 7.
[105]. LCA,
Submission
to L&C Committee, op. cit., p. 8.
[106]. Criminal Code,
section 13.3.
[107]. LCA,
Submission
to L&C Committee, op. cit., p. 8; AICD, Submission
to L&C Committee, op. cit., pp. 3–4.
[108]. Ibid.
[109]. AICD,
Submission
to L&C Committee, op. cit., p. 3.
[110]. IBA,
Submission
to L&C Committee, op. cit., p. 3.
[111]. AICD,
Submission
to L&C Committee, op. cit., p. 3.
[112]. Bronitt
and Brereton, Submission
to L&C Committee, op. cit., p. 8.
[113]. Criminal Code,
paragraph 15.1(1)(c).
[114]. Bribery Act
2010 (UK), section 7.
[115]. Scrutiny
of Bills Committee, Scrutiny
digest, 3, 2018, op. cit., p. 98.
[116]. Ibid.,
p. 99.
[117]. Ibid.
See also AGD, Submission
to L&C Committee, op. cit., p. 9.
[118]. Ibid.
[119]. Senate
Standing Committee on Economics References Committee, Foreign
bribery, op. cit., pp. 83–4, 131 (Recommendations 8,
9 and 17).
[120]. Commonwealth
Director of Public Prosecutions, Self-reporting
of foreign bribery and related offending by corporations,
8 December 2017.
[121]. AGD,
‘Improving
enforcement options for serious corporate crime: a proposed model for a
Deferred Prosecution Agreement scheme in Australia: public consultation paper’,
op. cit., p. 6. The Attorney-General’s Department further noted that it is continuing
to assess whether other crime types (such as environmental crime, tax offences,
cartel offences and offences under workplace health and safety legislation)
should be included in a DPA scheme.
[122]. Explanatory
Memorandum, p. 27.
[123]. Senate
Standing Committee on Legal and Constitutional Affairs, Report,
op. cit., p. 34.
[124]. G
Brandis, ‘Second
Reading Speech: Crimes Legislation Amendment (Combatting Corporate Crime) Bill
2017’, Senate, Debates, 6 December 2017, p. 9908.
[125]. Senate
Standing Committee on Legal and Constitutional Affairs, Report,
op. cit., p. 36.
[126]. Ibid.,
p. 37. Senator Patrick also made recommendation that full publication of a DPA must
occur once concerns that it is not in the interests of justice are no longer
present. Proposed subsection 17D(10) allows the Director to do so, if
the Director considers that it would be in the interests of justice to publish
the DPA.
[127]. Explanatory
Memorandum, p. 32.
[128]. Ibid.,
p. 33.
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