Introduction
Labor Senators support the amendments to foreign bribery offences in Schedule 1 of this bill. Those are sensible amendments supported by a clear and considered rationale.
By contrast, Schedules 2 and 3 of the bill are not sensible and, as became clear during the Committee's public hearing, are not supported by a clear and considered rationale.
Schedule 2 and deferred prosecution agreements
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.
One of the Government's proposed solutions to our enforcement problem is contained in Schedule 2 of the bill. This Schedule would establish a Deferred Prosecution Agreement ("DPA") scheme which would allow companies that have engaged in serious corporate crime, including foreign bribery, to pay a fine and agree to a set of conditions and have their case put on indefinite hold.
The proposed DPA scheme purports to strike a balance between the need to encourage corporations to self-report serious offending and the need to hold corporations accountable for serious corporate crime. But the proposed scheme contains insufficient safeguards to prevent companies from effectively buying their way out of meaningful punishment for corporate crime.
The Government first proposed this DPA scheme in 2017 but did not proceed with it in the last Parliament. Between late 2017 and today, we have had the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry ("Banking Royal Commission") – something the current Liberal Government opposed 26 times before finally succumbing to public and political pressure.
Incredibly, the Government has made no amendments to the scheme it proposed in late 2017 in light of the findings by the Banking Royal Commission. Findings which included criticism of corporate regulators for frequently and inappropriately using "enforceable undertakings" as an alternative to court action.
As the Banking Royal Commission highlighted, ASIC regularly used "enforceable undertakings" as an alternative to taking banks to court. While there are a number of differences between a DPA and an enforceable undertaking, both represent alternatives to court action. Moreover, like enforceable undertakings, there is a risk that the Commonwealth Director of Public Prosecutions (CDPP) will use DPAs too often and in inappropriate circumstances.
Clearly, there are lessons to be learned from the Banking Royal Commission. Just as clearly, the current Government appears to be determined not to learn them.
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. For example:
the CDPP is not required to take any prescribed steps, such as consulting victims of crime, before negotiating a DPA with a corporation; and
the CDPP is given a broad discretion to withhold any (or even all) details of a DPA from the public if he or she considers it to be "in the interests of justice" to do so.
Accordingly, Labor Senators do not support Schedule 2 in its current form.
Schedule 3
The Minister’s Second Reading Speech described Schedule 3 as making "technical amendments to update the definitions of dishonesty under the Criminal Code". We do not propose to speculate on whether that statement was the product of rank incompetence or wilful deceit on the part of the Government (except to note that, given the context, it would be ironic if it were the latter). 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.
Despite this, there is no evidence that the Government gave any consideration – let alone detailed consideration – to any of the 58 offences that would be altered by the changes in Schedule 3.
The Government's failure to accurately describe and then explain these amendments is a sufficient reason for the Parliament of Australia to reject Schedule 3.
It is simply unacceptable for the Government to propose blanket – and substantive – changes to the Criminal Code without providing a detailed, considered and accurate explanation of (i) the effect of the changes and (ii) the rationale for the changes.
The Parliament and the Australian people we are tasked with representing deserve better.
Recommendation by Labor Senators
Labor Senators recommend that the bill be amended to implement the following recommendation.
Recommendation
Schedules 2 and 3 should be deleted from the bill.
Senator the Hon Kim Carr
Deputy Chair