Key points
- The Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023 (the Bill) replaces the offence of bribery of foreign public officials in the Criminal Code Act 1995 with a new offence in an effort to make it easier to investigate and prosecute offenders.
- The new offence will expand the scope of the existing foreign bribery offence, including by capturing candidates for office in the definition of foreign public official and applying the offence where a personal (as opposed to business) advantage is sought.
- The Bill introduces a new corporate offence of failure to prevent bribery of a foreign public official. The offence is modelled on section 7 of the United Kingdom’s Bribery Act 2010.
- The Bill makes related changes to income tax legislation to prohibit a person from claiming tax deductions relating to foreign bribery.
- The Bill is similar to two previous Bills introduced by the Coalition Government in 2017 and 2019, although it differs in that it does not include provisions relating to Deferred Prosecution Agreements. Neither of those Bills were debated.
- The Bill was referred to the Senate Legal and Constitutional Affairs Committee for inquiry. The Committee’s report makes three recommendations:
- that the Government consider amending the Bill or the Explanatory Memorandum with respect to the proposed corporate offence of failure to prevent bribery ‘to clarify that the fact that foreign bribery has occurred does not, in itself, mean that adequate procedures were not implemented by the respective body corporate’
- that the Commonwealth government considers the introduction of further measures to address foreign bribery, including after the reforms proposed in this Bill have been given time to have an impact and
- that the Bill be passed.
Introductory Info
Date introduced: 22 June 2023
House: House of Representatives
Portfolio: Attorney-General
Commencement: Schedule 1 Part 1 commences 6 months after Royal Assent
Schedule 1 Part 2 commences on the first 1 January, 1 April, 1 July, or 1 October to occur after the end of six months after Royal Assent.
Purpose of
the Bill
The purpose of the Crimes
Legislation Amendment (Combatting Foreign Bribery) Bill 2023 (the Bill) is
to amend the Criminal
Code Act 1995 (Criminal Code) and Income Tax
Assessment Act 1997 to tighten the rules around bribery of a foreign
public official. Specifically, the Bill seeks to:
- broaden
the scope of commercial and personal conduct that may be captured under the
existing offence of foreign bribery
- introduce
a new offence of failure to prevent bribery of a foreign public official, and
- make
consequential amendments to income tax legislation to ensure that a person
cannot claim tax deductions as a result of foreign bribery.
Structure
of the Bill
The Bill has one Schedule, divided into in two Parts.
Part 1 makes changes to Division
70 of the Criminal Code (Bribery of foreign public officials) to
broaden the scope of the existing foreign bribery offence and introduce a new
indictable corporate offence of failing to prevent foreign bribery.
Part 2 of the Bill makes consequential amendments
to the Income
Tax Assessment Act 1997 to ensure that persons cannot claim deductions
for losses or outgoings that are connected to bribery of a foreign official (as
amended by this Bill).
Background
Foreign
bribery under Australian law
Attempts to control foreign bribery by businesses has had
a relatively short history in Australian law and indeed in Western industrialised
economies. The United States was the first modern nation to seek to combat
foreign bribery and corruption in law. In 1977, in the wake
of the Lockheed controversy, the Carter Administration introduced the Foreign
Corrupt Practices Act (FCPA). The FCPA required publicly
held companies to institute internal accounting controls to ensure that all
transactions were made in accordance with management's specific authorisation
and were fairly recorded.
Until the mid-1990s, the United States remained the only
major nation that made it a criminal offence to bribe a foreign public official.
The impetus for a more transnational approach, including the involvement of
Australia, was the signing of the Convention
on Combating Bribery of Foreign Public Officials in International Business
Transactions (OECD Anti-Bribery Convention). The
Convention was signed in December 1997 and entered into force in February 1999.
Australia ratified the treaty in 1999 and in the same year, the Howard
Government passed the Criminal Code
Amendment (Bribery of Foreign Public Officials) Act 1999.[1]
That Act inserted a new division 70 into the Criminal
Code. Section 70.2 currently makes it an offence to bribe a foreign public
official. Section 70.3 provides a defence for conduct which was lawful in the
country where the person’s conduct occurred, and section 70.4 provides a
defence for facilitation payments where the benefit was minor and the conduct
was engaged in for the sole or
dominant purpose of expediting or securing the performance of a routine
government action.
Relevantly, in the
context of the current Bill, section 70.2 includes a requirement that the
prosecution prove that the benefit or advantage provided to the foreign
official was ‘not legitimately due’.[2] In establishing whether a
benefit or advantage is not legitimately due, the investigator (or
subsequently, the Court) is to disregard the value of the benefit or ‘official
tolerance’ of the benefit or advantage as well as the fact that it may be, or be
perceived to be, customary, necessary or required in the situation.[3]
The Bill
proposes to remove the wording of not legitimately due and instead base the revised
offence of foreign bribery on the concept of improper influence.
The potential ramifications of this change are discussed further below in the Key
issues and provisions section, below.
The difficulty in prosecuting foreign
bribery
The revision of
the existing foreign bribery offence in Division 70 of the Criminal Code
is said to be based, in large part, on the difficulty in investigating and
successfully prosecuting foreign bribery offences. In his second reading
speech, the Attorney-General described how the offence has proven to be overly prescriptive and difficult to use. The Explanatory Memorandum to the Bill further
discussed some of these difficulties:
Challenges
relating to the existing foreign bribery offence include the need to show that
both the bribe and the business or personal advantage sought were not
legitimately due. In some cases, the threshold of ‘not legitimately due’ can
present challenges. For example, bribe payments can be concealed as agent fees,
making it difficult to show, beyond a reasonable doubt, that the payments were
not legitimately due. Further, proving the existing offence can also require
reliance on international legal assistance processes. Reliance on such
processes may be required, for example, to prove that a benefit or advantage
was not legitimately due or that a foreign official was working within their
official duties. International legal assistance processes may take time and/or
prove unsuccessful, and the investigation/prosecution may be compromised as a
result (p. 12).
Challenges in monitoring and enforcing the offence of
foreign bribery are also reflected in the relatively low conviction rates
secured by regulators in Australia. Despite the introduction of the offence of
foreign bribery by the Howard Government in 1999, the first prosecutions did
not commence until 2011. The most recent figures suggest since that time, only
seven individuals and three corporations have been convicted of a foreign
bribery offence. The challenge is not particularly unique to Australia,
with the situation of the UK revealing only a handful of
convictions between 2014 and 2020.
Comparison
with the 2017 and 2019 Bills
The current Bill is substantially similar to two previous Bills
introduced to the Parliament:
The major difference is that the current Bill does not
include a Deferred Prosecution Agreement (DPA) scheme. The inclusion of a DPA
scheme was opposed
by Australian Labor Party Senators during the Committee inquiry into the
2019 Bill (pp. 27–28). The reasons for this opposition are discussed below.
The 2017 Bill was introduced by the Turnbull Government in
December 2017. The purpose of the 2017 Bill was to:
- amend
the Criminal Code to expand the scope of the existing foreign bribery
offence and introduce a new corporate offence of failing to prevent foreign
bribery
- amend
the Director of
Public Prosecutions Act 1983 to introduce a DPA scheme for serious
corporate crime under a range of existing legislation (rather than just in
relation to foreign bribery offences), and
- make
consequential amendments to other legislation.[5]
The proposed DPA scheme for Australia was to be modelled
off that of the UK (introduced in 2014) and would have allowed the
Commonwealth Director of Public Prosecutions (CDPP) to invite a company that
has engaged in serious corporate crime to negotiate an agreement to comply with
a range of specified conditions.[6]
The proposed new corporate offence of failing to prevent
bribery was generally supported, including by external stakeholders such as the
Uniting Church, the International Bar Association and some legal academics.[7]
The Senate Economics Reference Committee supported both the creation
of the new foreign bribery offence and the introduction
of a DPA scheme. The 2017 Bill lapsed, however, at the end of the 45th Parliament
on 1 July 2019.
The 2019 Bill was introduced in December 2019. It was
substantially similar to the 2017 Bill including seeking to expand the scope of
the existing foreign bribery offence and introducing a new corporate offence
for failing to prevent foreign bribery.[8]
As a point of difference, however, the 2019 Bill also included additional
amendments (Schedule 3) which sought to replace the current definition of
‘dishonesty’ used in the Criminal Code.[9]
Amendments to the definition of dishonesty are not contained in the current
Bill. It may be that this is a response to the somewhat controversial nature of
those amendments in relation to the 2019 Bill, which was considered by the
Senate Standing Committee on Legal and Constitutional Affairs and which were
opposed by the ALP at that time in its dissenting report,
arguing (p 28):
The Minister’s Second Reading Speech described Schedule 3 as
making "technical amendments to update the definitions of dishonesty under
the Criminal Code"… Regardless, the suggestion that Schedule 3 makes only
"technical amendments" is clearly untenable. As outlined in cogent
and detailed written and oral submissions by Professor Jeremy Gans and the Law
Council of Australia, the so-called "technical amendments" in
Schedule 3 would make substantive changes to as many as 58 federal dishonesty
offences and, in Professor Gans' words, may lead to a situation where:
…someone who believed that he or
she was acting according to ordinary people's standards will still be able to
be found to be criminally dishonest so long as he or she was wrong, even
reasonably, about what those standards are.
The Senate Standing Committee on Legal and Constitutional
Affairs recommended
that the 2019 Bill be passed (p. 25). A dissenting report by Australian
Labor Party (ALP) Senators, recommended that the DPA scheme and changes to the
definition of ‘dishonest’ (noted above) be deleted from the Bill. On the topic
of the DPAs the ALP’s dissenting report
argued (pp. 27–29):
When ordinary Australians commit crimes, they feel the full
force of the law. But too often when it is companies committing the crimes,
nothing happens… [T]he proposed [DPA] scheme contains insufficient safeguards
to prevent companies from effectively buying their way out of meaningful
punishment for corporate crime… Labor Senators do not support the creation of a
two-tiered justice system where corporate criminals are granted the unique
privilege of effectively negotiating their own so-called "punishment"
in secret while everyone else is subject to the full force of the law in a
court of law. While there may be a place for DPAs in Australia, the Government
has not made the case and, in any event, the proposed scheme is clearly too
weak.
In its additional comments, the Australian Greens
argued (pp. 31–33) that the Senate should suspend consideration of the 2019
Bill until after the Australian Law Reform Commission (ALRC) had completed its
inquiry into Australia's corporate criminal responsibility. The need to wait
for the ALRC’s report to be finalised, to help inform further debate, was
raised by several inquiry participants at the time.
The ALRC
Report on Corporate Criminal Responsibility
The ALRC’s inquiry into corporate criminal responsibility
was conducted contemporaneously with Committee examination of the 2019 Bill. In
its final report, released
in April 2020, the ALRC did not revisit the advantages and disadvantages of
introducing a DPA scheme in Australia, however, it did recommend that judicial oversight
of a DPA scheme should occur (p. 496).
On the question of a proposed new offence for failing to
prevent foreign bribery (that is the new corporate offence), the ALRC concluded
that:
…it may be appropriate to have mechanisms both for holding
corporations responsible for directly engaging in criminal conduct such as
foreign bribery, as well as holding corporations responsible for failing to
prevent such conduct by their associates.[10]
The ALRC further recommended that the Australian
Government should consider applying the failure to prevent bribery offence in
the 2019 Bill to other Commonwealth criminal offences in the context of
transnational business activities.[11]
On this point, the ALRC suggested:
The failure to prevent model may be appropriate in relation
to offences that might occur in a transnational business context, such as tax
evasion, slavery and slavery-like offences, human trafficking, violation of
foreign sanctions, torture, crimes against humanity, war crimes, genocide, and
financing of terrorism.[12]
Like the 2017 Bill, the 2019 Bill was never put to a vote.
It lapsed on 25 July 2022 after the 46th Parliament had been prorogued.
Failure to
prevent bribery under UK law
The proposed new offence of failure to prevent foreign
bribery in the Bill is largely based on section 7 of the UK’s
Bribery Act 2010. The UK legislation was introduced in 2010 after
lengthy debate about how best to protect against both domestic and foreign
bribery. As a point of difference from the current Bill, the UK’s Bribery
Act 2010 deals with general bribery offences and bribery of foreign
public officials. By comparison, and reflecting the constitutional limitations
of the Commonwealth, the Criminal Code deals only with bribery of
Commonwealth public officials[13]
and foreign officials[14]
whilst the states and territories have laws that deal with bribery generally
(including state and territory government officials).[15]
Section 7 of the Bribery Act 2010 (UK), discussed
further below, makes it an offence for a commercial organisation to fail to
prevent bribery by a person associated with the organisation.
Some data on the use of section 7 by the UK’s Serious
Frauds Office has been
released online through freedom of information requests. Similar to the
current Bill, there is a defence under the Bribery Act 2010 if the
organisation can prove that it had in place adequate
procedures designed to prevent its associates from engaging in bribing. The
standard of proof for this defence is the balance of probabilities.[16]
Also, similar to the current Bill, there is a requirement for the UK Government
to publish
guidance about the steps organisations may take to prevent associates from
engaging in bribery. The guidance is not intended to be prescriptive and nor
will compliance with the guidance provide a complete defence to criminal
prosecution.[17]
The proposed ‘failure to prevent offence’ is rather novel
in the context of Australian corporate law when it comes to the actions of
associates of a corporation overseas.[18]
In other jurisdictions (especially Europe) laws have been introduced that seek
to further target illegal activities of subsidiary companies, partners and
other associates from engaging in illegal or immoral activities (for example, human
rights abuses). As is discussed further below, the ALRC’s Report on
Corporate Criminal Activity suggested that it may be appropriate for
Australian Government to broaden such offences past failure to prevent bribery
and include ‘third party’ offences such as tax evasion, slavery, human
trafficking, torture, crimes against humanity, war crimes, genocide, and
financing of terrorism.[19]
In 2017 in the UK, legislation
was introduced to make it a corporate offence to prevent the facilitation
of tax evasion. That offence was reportedly
modelled on section 7 of the Bribery Act 2010 (UK).
Committee
Consideration
Senate
Standing Committee on Legal and Constitutional Affairs
The Bill was referred
to the Senate Standing Committee on Legal and Constitutional Affairs (L&C
Committee) on 22 June 2023. The L&C Committee report
on the Bill made three recommendations. First, that the government consider
amending the Bill or the Bill’s Explanatory Memorandum to clarify that in the
proposed corporate offence of failure to prevent bribery, the fact that foreign
bribery has occurred does not, in itself, mean that adequate procedures were
not implemented. Two, that the government considers the introduction of further
measures to address foreign bribery, including after the reforms proposed in
the Bill have been given time to have an impact. Three, the Committee
recommends that the Bill be passed (pp. 15–16, [2.35], [2.39]–[2.40]).
Senator Scarr, as Deputy Chair, provided additional
comments, stating that he is ‘firmly of the view that the Government should
reconsider its position with respect to Deferred Prosecution Agreements’, and
that if the Bill does not provide for DPAs, ‘this will represent a missed
opportunity in Australia’s efforts to combat foreign bribery’ (p. 17).
Ultimately, Senator Scarr recommends that the Bill be amended to provide for a
DPA scheme with statutory review to occur a reasonable period of time after
adoption (p. 23, [1.22]).
Senate Standing Committee for the Scrutiny of Bills
At the time of writing, the Senate Standing Committee for
the Scrutiny of Bills had not considered the Bill. The Committee’s relevant
comments on the 2017 Bill are summarised below, to assist in consideration of
the current Bill.
The Scrutiny of Bills Committee raised two issues in its
report on the 2017 Bill, both of which related to amendments that are
replicated in the current Bill.[20]
Offence-specific defence to the foreign bribery
offence
Item 7 of the 2023 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)).
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).[21]
In its report on the same amendment in the 2017 Bill, 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.[22] 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).[23]
The then 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.[24]
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.[25] The information is
included in the Explanatory Memorandum for the current Bill.[26]
Preventing bribery of foreign public officials
Proposed section 70.5A of the Criminal Code
(inserted by item 8 of the 2023 Bill) 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.
In its report on the same amendment in the 2017 Bill, 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.[27]
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.[28]
The then 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.[29]
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.[30]
The Explanatory Memorandum for the 2023 Bill includes the additional
information.[31]
2018
Inquiry into foreign bribery
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 2023
Bill.[32]
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)
- 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).
These recommendations are implemented in the Bill.[33]
Position of
major interest groups
Ashurst
Australia
In its submission
to the Senate Legal and Constitutional Affairs Committee, the law firm
Ashurst Australia expressed concerns about the meaning of ‘adequate procedures’
under proposed subsection 70.5A(5) of the Bill. Ashurst suggested that
the proposed subsection should be amended to refer to a company having
procedures which were ‘reasonable in all the circumstances’ as opposed to a
focus on ‘adequacy’. The rationale for Ashurst’s suggested change was based in
part on the findings of a UK Court[34]
which indicated the phrase could be interpreted too narrowly, as well as
conclusions in the 2022 UK Law Commission's Options
Paper for Corporate Liability (p 103). As Ashurst argued in its
submission:
The statutory language of "adequate", by its plain
English meaning, is capable of being interpreted in a way that is
outcomes-focussed (i.e. the fact foreign bribery occurred means procedures were
not adequate) rather than process focussed (i.e. what is important is whether
the procedures in place were appropriate) (p. 2)….
…our concern is that the language of "adequate
procedures" may result in a jury incorrectly equating the fact that
bribery has occurred with a lack of adequate procedures, which contradicts the
intended meaning of the provision (p. 4).
The Law
Council of Australia
The Law Council of Australia, in
its submission, agreed with, amongst other things, the proposed extension
of the foreign bribery offence to include candidates for public office (p. 5).
However, it did raise some concerns about the change of the language from ‘not
legitimately due’ to ‘improper influence’ in proposed section 70.2. The
Law Council noted that the concept of improper influence is not well understood
in Australian criminal law, and that the language of ‘dishonesty’ should also
be included as an element of the offence. In its submission, the Law Council
argued (at pp. 6–7):
… the Law Council considers [that] intention should be
accompanied with the requirement for the person to be acting with ‘dishonesty’,
which should be elevated from being a factor that may be considered at proposed
paragraph 70.2A(3)(f) to an element of the offence, so that a person commits
the offence if the person dishonestly does the things listed in proposed
subparagraphs 70.2(1)(a)(i) to (iv).
Uniting
Church in Australia, Synod of Victoria and Tasmania
The Uniting Church in Australia, Synod of Victoria and
Tasmania (the Synod), in its submission
to the Committee, welcomed the introduction of the new offence of failure
to prevent foreign bribery as well as the broad definition of associate (p. 5).
On this point, the Synod concluded:
The legislative change to make it an offence for a body
corporate to fail to prevent foreign bribery by an associate is vital to
prevent Australian corporations from being able to pay bribes through
intermediaries (p. 5).
On the topic of changes to the existing offence of foreign
bribery, the Synod suggested that a new fault element of recklessness should be
included in the provision which would, in effect, ‘lower the bar on the level
of evidence needed to prosecute a case involving foreign bribery successfully’
(p. 3).
Despite being broadly supportive of the Bill, the Synod
did raise concerns that the Bill did not include a DPA scheme saying it was
‘deeply disappointed’ that deeply disappointed that the current Government
seemed opposed to a DPA scheme (p. 1). The Synod suggested that this would
effectively undermine the ability of law enforcement officers to detect and
deter corporate misconduct (p. 1):
The current Government’s opposition to DPA schemes appears to
rest on the mistaken belief that if DPAs are not offered, then all cases will
proceed to prosecution. The reality is that in the absence of a DPA, many
corporate crimes carried out by middle managers that would otherwise be
self-reported to law enforcement agencies by the corporation itself will go
undetected. Those responsible will never go to trial. The experience of other
jurisdictions is that a DPA scheme increases the detection of corporate crimes
and results in more prosecutions of the individuals inside the corporation that
engaged in criminal conduct.
Allens
Linklaters
Law firm Allens Linklaters (Allens), in
its submission, focused on the adequate procedures exemption (defence)
provided for in proposed subparagraph 70.5A(5) as well as the absence of
a DPA Scheme in the Bill. On the topic of DPAs, Allens argued (p. 3):
Allens maintains its strong support for the introduction of a
DPA scheme, in line with our earlier comments as well as international best
practice. We remain of the view that DPAs can provide an effective and
efficient means of addressing corporate misconduct in suitable cases. This has
been seen in practice in both the US and the UK and aligns with the OECD's
landmark antibribery guidance issued in 2021 which strongly suggests that
signatories, like Australia, should have in place non-trial resolution mechanisms
for foreign bribery matters – such as a DPA scheme (footnotes omitted).
Transparency
International
Transparency International (TI) welcomed the proposed
amendments in the Bill through its submission
to the Senate Legal and Constitutional Affairs Committee. In addition to its
support for the Bill, TI suggested that the Government, also undertake the
following (p. 2):
- Publish
statistics on foreign bribery investigations, prosecutions and case outcomes.
- Develop
a database of foreign bribery investigations and enforcement outcomes.
- Introduce
a DPA scheme as per previous versions of the proposed Bill. However, ensure it
includes the requirement of an admission of criminal liability as part of a
DPA.
- Abolish
the facilitation payments defence.
- Introduce
a debarment regime to grant agencies the power to preclude companies found
guilty of foreign bribery offences from being awarded contracts.
- Ensure
the Bill makes it a criminal act to pay bribes to third parties to win
government contracts in foreign jurisdictions, such as bribing a competitor to
put in an uncompetitive bid for the contract.
Financial
implications
The Bill is not expected to have any significant impact on
consolidated revenue, although Explanatory Memorandum suggests that it may lead
to more fines being imposed for the foreign bribery offence.[35]
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.[36]
Parliamentary
Joint Committee on Human Rights
The Committee examined the 2017 and 2019 Bill and had no
concerns.[37]
At the time of writing it had not yet considered the current Bill.
Key issues
and provisions
The Bill makes a number of changes to the offence of
bribing a foreign public official under section 70.2 of the Criminal Code
and related provisions.
Current
offence of bribing a foreign public official
Currently section 70.2 of the Criminal Code establishes
that a person commits an offence if that person:
- provides,
offers, or causes a benefit, or causes an offer or a promise of a benefit, to
be provided to another person
- the
person does so with the intention of influencing a foreign public official in
the exercise of his or her duties
- the
person does so in order to:
- obtain
or retain business or
- obtain
or retain a business advantage that is not legitimately due to
the recipient
- the
benefit provided or offered is not legitimately due to the other
person.[38]
Revised
offence of bribing a foreign public official
The Bill makes a number of changes to the current offence
of bribing a foreign public official under section 70.2 of the Criminal Code
set out above. These changes should also be considered in connection with
the Bill’s proposed introduction of a new offence of failing to prevent bribery
of a foreign public official under proposed section 70.5A.
In summary, the Bill proposes to replace and remake
section 70.2 by making the following changes:
- expanding
the definition of foreign public official to include candidates to be a foreign
public official
- removing
the existing requirement that the benefit is not legitimately due to the
recipient and replacing it with a requirement that the person committing
the offence does so with the intention of improperly influencing the
foreign public official
- removing
the existing requirement that the person committing the offence intends to
influence a foreign public official in the exercise of the official’s duties
- expanding
a requirement that the person intends to obtain or retain business or a
business advantage to also include obtaining or retaining a personal advantage
and
- removing
the requirement that the obtained or retained business or business advantage
was not ‘legitimately due’ to the person who provided, offered, promised to
provide or caused a benefit to be provided to another person.
These changes are examined in detail below.
Bill
expands definition of foreign public official to include candidates for public
office
Item 4 of the Bill proposes to amend the definition
of ‘foreign public official’ in the Criminal Code to include a person
standing, or nominated (whether formally or informally) as a candidate to be a
foreign public official. The Explanatory Memorandum to the Bill (p. 11) states
that:
this amendment ensures that the foreign bribery offences
extend to bribes made to candidates for public office. Law enforcement
experience indicates that individuals or companies may seek to bribe candidates
for public office, with the intent of obtaining an advantage once the candidate
takes office. It is appropriate to criminalise this conduct given that it
equally undermines good governance and free and fair markets.
The inclusion of candidates for office is consistent with
the Senate Standing Committee on Economics recommendation in 2018 that the
definition of foreign public official be expanded.[39]
The proposed expansion was supported at the time of the Committee’s report by,
amongst other stakeholders, law firm Allens
Linklaters and the Australian Institute of Company Directors (pp. 62‑63).
Replacement
of ‘not legitimately due’ with ‘improperly influencing’
As noted above, currently, division 70 of the Criminal
Code criminalises providing, offering or promising to provide, or causing a
benefit to be provided to another person, where the benefit is not
legitimately due to that other 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 to obtain or retain a business advantage
that is not legitimately due to the recipient or intended
recipient.[40]
The Bill proposes to remove the requirement for the
prosecution to prove the element of not legitimately due and
replace it with the concept of improper influence. The offence in
proposed section 70.2 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.
The Explanatory Memorandum to the Bill suggests that this
term would better characterise the conduct of foreign bribery than the current
term ‘not legitimately due.’[41]
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 list 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)).
Proposed section 70.2A is consistent (as with many
other aspects of this Bill) with the amendments proposed in 2017 and 2019 to
the Criminal Code.
Part of the change is reportedly due to legislative
complexity with, for example, the Law Council of Australia,
arguing in 2017 (pp 35–36):
The requirements that a benefit not be legitimately due to
the bribe taker and bribe giver creates unnecessary complexity to the offence.
The UK Bribery Act deliberately removed these requirements from that
legislation. Corporate culpability is too complex.
In response to the inquiry by the Senate Standing
Committee on Legal and Constitutional Affairs into the 2019 Bill, the
Attorney-General’s Department provided a rationale for the inclusion of improper
influence as an element of the offence:
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’ …
While the offence is founded on ‘improper influence’,
dishonesty is included as a relevant factor for determining whether influence
is improper.[42]
Influence
in exercise of the official’s duties
The Bill proposes to remove the requirement that the
person committing the offence intends to influence the foreign public official in
the exercise of the official’s duties under existing paragraph 70.2(1)(c).
As explained by the Attorney-General’s Department:
The amendments remove the requirement that the intention to
influence the foreign official must be directed towards the exercise of the
official’s duties. The requirement puts an unnecessary burden on the
prosecution to prove the scope of a foreign public official’s duties.
Additionally, proof of foreign official duties relies on international legal
assistance processes, which can be protracted or unsuccessful.
The AFP has previously noted that foreign public officials
can be bribed to act outside of their official duties to secure business or an
advantage. For example, investigations have identified instances where senior
ministers in foreign countries may have been bribed to act beyond their
official duties. The foreign public official’s position of power within the
foreign country, or candidacy for such a position, is the relevant
consideration in criminalising conduct amounting to foreign bribery.[43]
Obtaining a
personal advantage
The proposed section 70.2 offence will also apply
where a personal (as opposed to business) advantage is sought. The 2019 Bill
proposed a similar change. This will implement recommendation 6 of the Senate
Standing Committee on Economics’ report on foreign bribery, discussed above.[44]
Penalty for
foreign bribery
Under the proposed revised
offence, the maximum penalty for engaging in foreign bribery is, for an
individual, 10 years’ imprisonment or a fine of not more than 10,000 penalty
units, or both (proposed subsection 70.2(3)).[45]
For a corporation, pursuant to proposed subsection 70.2(4) the offence
is punishable by a fine not more than the greatest of the following:
- 100,000
penalty units[46]
- if
the court can determine the value of the benefit that the body
corporate and any body corporate related to the body corporate,
have obtained directly or indirectly and that is reasonably
attributable to the conduct constituting the offence—3 times the
value of that benefit
- if
the court cannot determine the value of that benefit—10% of the
annual turnover of the body corporate during the period (the turnover period)
of 12 months ending at the end of the month in which the body
corporate committed, or began committing, the offence.
Offence of
failing to prevent foreign bribery
Item 8 of Schedule 1 will insert proposed
Subdivision 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.[47]
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[48]
- the
associate does so for the profit or gain of the body corporate (proposed
paragraph 70.5A(1)(c)).
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:
Conduct that is done for the ‘profit or gain’ of the first
person (paragraph 70.5A(1)(c)) is not defined in the legislation and would be
interpreted by reference to the ordinary meaning of the words. The ordinary
meaning of these words, however, is very broad. ‘Gain’ would include any sort
of benefit or advantage to the body corporate. The term would cover, for
example, situations where an Australian company benefits merely because it is
the beneficial owner of a subsidiary company that benefited from the commission
of the foreign bribery offence.[49]
Proposed subsection 70.3(2A)(8) is a new addition
that was not in the 2017 or 2019 Bills. It specifies that an offence against
subsection 70.5A(1) is an indictable offence. As set out in the Explanatory
Memorandum:
Section 4G of the Crimes Act provides that indictable
offences are offences against a law of the Commonwealth punishable by
imprisonment for a period exceeding 12 months, unless the contrary intention
appears. As the new offence at subsection 70.5A(1) does not contain a penalty
of imprisonment (as it only applies to bodies corporate) it must therefore be
specified as an indictable offence in order for it to be considered as such.
Specifying the new offence as an indictable offence will
allow prosecutions of the offence to be heard in superior courts and enables
the Commissioner of the AFP and CDPP to seek certain orders under the Proceeds
of Crime Act 2002 in respect of the offence, including certain types of
restraining orders, forfeiture orders and pecuniary penalty orders.[50]
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, or is controlled by, the other person (within the meaning of
the Corporations Act) or
- otherwise
performs services for or on behalf of the other person.
The
definition of associate
The key definition of associate in the Bill,
is defined rather expansively in proposed section 70.1. By comparison,
the Corporations
Act 2001 defines ‘associate’ in sections 10 to 17, providing that an
associate may be:
- a
director or secretary of the body, a related body corporate, or a director or
secretary of a related body corporate (section
11)
- a
person in concert with whom the primary person is acting, or proposes to act (section
15)
- a
person who, under the regulations, is, for the purposes of the provision in
which the associate reference occurs, an associate of the primary person
(section 15)
- a
person with whom the primary person is, or proposes to become, associated,
whether formally or informally, in any other way (section 15).
However, section
16 specifically excludes certain classes of people from the definition of
‘associate’ under the Corporations Act, relevantly to the measures
proposed by the Bill, including by providing that a person is not an associate
of another person merely because:
one gives advice to the other, or acts on the other's behalf,
in the proper performance of the functions attaching to a professional capacity
or a business relationship (paragraph 16(1)(a).
In contrast, the definition of associate in the Bill is
much broader and provides that a person is an ‘associate’ of another person if
the first-mentioned person:
- is
an officer, employee, agent or contractor of the other person
- is
a subsidiary
(within the meaning of the Corporations Act) of the other person
- is controlled
(within the meaning of the Corporations Act) by the other person or
- otherwise
performs services for or on behalf of the other person.[51]
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.[52]
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, but would
not need to show that the associate has been successfully prosecuted.[53]
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 offence in subsection 70.5A(1) is necessary to ensure the
effectiveness of the new offence. In particular, it ensures that the
prosecution does not need to establish any fault element in order to prove the
offence. Accordingly, a corporation will not be able to avoid criminal
liability committed by its associate for the profit or gain of the corporation
because one or more fault elements could not be attributed to it. In this way,
the offence incentivises corporations to actively ensure they have adequate
procedures in place to prevent foreign bribery occurring…. Applying absolute
liability in this way is appropriate to capture the distinct nature of
corporate misconduct where it is a form of omission.[54]
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).[55]
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.[56]
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 states
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 and activities’.[57]
As noted above, Ashurst
argued to the L&C Committee that the phrase ‘adequate procedures’ should be
replaced by the standard of ‘reasonable in all the circumstances’. This was
because, arguably, adequate was capable of being interpreted in a way that is
outcomes-focussed (i.e. the fact foreign bribery occurred means procedures were
not adequate) rather than process focussed (i.e. what is important is whether
the procedures in place were appropriate). On this issue, the L&C Committee
recommended
the Government consider amending the Bill (or the Bill’s Explanatory Memorandum)
to clarify that where foreign bribery has occurred this will not, in itself,
mean that adequate procedures were not implemented.
Penalty
The maximum penalty for the proposed new offence will be
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 $31,300,000)
- 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).[58]
While not recommending a specific amendment, the Law
Council considered that the difficulty of determining the value of the benefit
obtained by an associate could mean that the ten percent of annual turnover
figure is likely to be relied on for larger corporations. It cautioned:
This may result in significant penalties for entities, for
actions, which as noted above, may well be beyond their control under existing
principles of criminal attribution.[59]
Stakeholder
reaction to proposed offence of failing to prevent foreign bribery
The ALRC report on its
inquiry into corporate criminal responsibility examined the failure to prevent
model generally as a form of corporate criminal regulation. This examination
explores the implementation of such offences in the UK, where the first failure
to prevent offence was introduced in the UK through section 7 of the Bribery
Act 2010.[60]
One of the key policy objectives of the UK failure to prevent foreign bribery
offence was ‘to influence behaviour and encourage bribery prevention as part of
corporate good governance’.[61]
The report notes that, ‘in part, the UK offences were intended to address
perceived difficulties in attributing liability to corporations under the UK’s
identification doctrine, and that several UK stakeholders in the Bribery Act
were highly supportive of the changes resulting from the introduction of
these failure to prevent offences.[62]
As acknowledged in the Attorney-General’s second reading
speech for the 2023 Bill, the draft guidance on adequate procedures to avoid
criminal liability ‘will largely be modelled on the UK government's guidance
that accompanies the 'failure to prevent' offence under section 7 of the UK
Bribery Act’.[63]
Many stakeholders in the ALRC inquiry considered the
introduction of the UK offence as successful, and in 2019, the House
of Lords Bribery Act Committee concluded that, on the whole, the offence
‘is generally agreed to have been remarkably successful’.[64]
The ‘failure to prevent’ model was again adopted in the Criminal
Finances Act 2017 (UK), creating offences of failing to prevent the
facilitation of tax evasion both domestically and overseas.
The ALRC considered it may be appropriate to have ‘failure
to prevent’ mechanisms when it comes to criminal conduct undertaken by a
corporation’s associate,[65]
noting that the failure to prevent model is well suited to offences such as
failure to prevent bribery.[66]
However, some qualifications were set out.
The ALRC considered several public consultation
submissions in relation to the 2019 Bill, stating that ‘the failure to prevent
offence was supported by 11 out of 16 submissions’[67]
in the Attorney-General’s Department’s public consultation, and that it was
supported by ‘five out of six submissions’[68]
to the Senate Legal and Constitutional Affairs Committee Inquiry on the 2019
Bill.
Publication
of, and reliance upon, Ministerial guidance
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. Such guidance will
not be a legislative instrument. The Government states that the guidance will
be:
- principles-based,
and designed to be applicable to corporations of different sizes and operating
in different sectors[69]
and
- similar
to the guidance the UK Government has published in relation to section 9
of the Bribery Act 2010 (UK).[70]
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.[71]
Two of those recommendations were reiterated by the
L&C Committee in its report on the 2017 Bill.[72]
Some indication of how the guidance may be intended to
operate in terms of linking to the proposed exception in proposed subsection
70.5A(5) may be gleaned from the substantially similar provision in section
9 of the UK’s Bribery Act 2010. The UK’s guidance to help commercial
organisations understand the sorts of procedures they can put in place to
prevent bribery has
been published online. The UK’s guidance describes its function as follows
(p. 6):
The guidance is designed to be of general application and is
formulated around six guiding principles, each followed by commentary and
examples. The guidance is not prescriptive and is not a one-size-fits-all
document. The question of whether an organisation had adequate procedures in
place to prevent bribery in the context of a particular prosecution is a matter
that can only be resolved by the courts taking into account the particular
facts and circumstances of the case. The onus will remain on the organisation,
in any case where it seeks to rely on the defence, to prove that it had
adequate procedures in place to prevent bribery. However, departures from
the suggested procedures contained within the guidance will not of itself give
rise to a presumption that an organisation does not have adequate procedures.[emphasis
added]
The six principles under the UK Guidance (on which
Australia’s principles are expected to be largely based) are set out in the
table below.
| Principles
of Guidance for UK’s Bribery Act 2010 |
| Principle |
Description |
| 1. Proportionate procedures |
A commercial organisation’s procedures to prevent bribery
by persons associated with it are proportionate to the bribery risks it faces
and to the nature, scale and complexity of the commercial organisation’s
activities. They are also clear, practical, accessible, effectively
implemented and enforced. |
| 2. Top-level Commitment |
The top-level management of a commercial organisation (be
it a board of directors, the owners or any other equivalent body or person)
are committed to preventing bribery by persons associated with it. They
foster a culture within the organisation in which bribery is never
acceptable. |
| 3. Risk Assessment |
The commercial organisation assesses the nature and extent
of its exposure to potential external and internal risks of bribery on its
behalf by persons associated with it. The assessment is periodic, informed
and documented. |
| 4. Due Diligence |
The commercial organisation applies due diligence
procedures, taking a proportionate and risk based approach, in respect of
persons who perform or will perform services for or on behalf of the
organisation, in order to mitigate identified bribery risks. |
| 5. Communication (including training) |
The commercial organisation seeks to ensure that its
bribery prevention policies and procedures are embedded and understood
throughout the organisation through internal and external communication,
including training, that is proportionate to the risks it faces. |
| 6. Monitoring and Review |
The commercial organisation monitors and reviews
procedures designed to prevent bribery by persons associated with it and
makes improvements where necessary. |
Source: UK
Ministry of Justice, The Bribery Act 2010 - Guidance, 2011, pp. 21–31.
Under the United State’s FCPA, there is also
departmental guidance
available. As with the UK’s guidance, the United States guide states that
it is non-binding and does not create any legal rights.[73]
As for the current Bill, the Attorney-General has made clear that the guidance
material will be finalised ‘in the coming months,’ be modelled largely off that
of the UK’s guidance (presumably a principles-based approach) and that it will build
on the draft guidance published
by the Attorney-General’s Department under the previous government in 2019.
The absence
of a DPA scheme in the current Bill
One of the key differences between
this Bill and the 2017 and 2019 Bills is the absence of a DPA scheme. As noted
earlier, ALP Senators recommended that the DPA provisions be removed from the
2019 Bill. In his second reading speech, the Attorney-General noted that it was
premature to entertain the introduction of a DPA in Australia, and that such a
scheme should only be entertained after the measures in this Bill have been
given time to work.[74]
DPA schemes are a relatively novel response to combatting corporate
crime (not just foreign bribery). The United States and UK have
utilised DPAs in the recent past, including for foreign bribery offences.
There is evidence to suggest that Canada, France and Singapore have also
utilised DPAs.[75]
The ability to enter into coordinated DPAs—where criminal conduct spans
multiple jurisdictions—is one potential benefit of the DPA model.[76]
Another is the potential to ‘bundle up’ or ‘package’ disparate allegations into
a single legal resolution.[77]
DPAs may also encourage companies to self-report instances of corporate crime,
where they otherwise might not.[78]
On the other hand, arguments have been put that DPAs may create a ‘two tiered
justice’ system, providing favourable treatment to white collar criminals,
whereas ordinary Australians face the full force of the law.[79]
The essence of a DPA is, in effect, that where a company
has engaged in a serious corporate crime, prosecutors
have the option to invite the company to negotiate an agreement to comply with
a range of specified conditions. As the Attorney-General’s Department has made
clear in the past:
The terms of the DPA would likely require the company to
cooperate with any investigation, pay a financial penalty, admit to agreed
facts, and implement a program to improve future compliance. A company would
not be prosecuted in relation to the matters outlined in the DPA where the
company fulfils its obligations under the agreement.
DPAs are increasingly used for corporate offences - like
foreign bribery - which are difficult
to detect, investigate and prosecute.[80]
As noted above, in Additional Comments to the L&C report
on the Bill, Liberal Party Senator Paul Scarr recommended that the Bill be
amended to provide for a DPA scheme with a statutory review to occur a
reasonable period of time after adoption (p. 23). As also set out above, a
number of submitters to the L&C inquiry into the Bill (including TI, the
Law Council, the Synod and Allens) also supported the introduction of a DPA
scheme.[81]