From July 2015, the Senate Economics Reference Committee commenced its long-publicised review into Australia’s foreign bribery laws. Submissions have been called from interested parties, to be lodged with the Senate by 24 August 2015. The Committee is to finalise its report by 1 July 2016.
There are likely to be numerous topics up for review by the Senate. These include:
- an entire review of section 70 of the Criminal Code (the foreign bribery offence) given we have seen only 2 prosecutions in over 15 years;
- abolishing facilitation payments;
- improving the corporate criminal liability provisions (again because there have been no prosecutions);
- considering the introduction of a deemed corporate liability offence reflecting section 7 of the UK Bribery Act with an “adequate procedures” defence;
- introducing structured Deferred Prosecution Agreements (currently under review);
- reviewing how the existing enforcement agencies work together – AFP or ASIC – and the role of the CDPP;
- creating a books & records and internal controls offence with substantial penalties (under the Corporations Act for ASIC to enforce or the Criminal Code for the AFP to enforce);
- introducing comprehensive whistleblower protections and rewards in the private sector;
- considering the publication of an Australian Foreign Bribery Guidance to business similar to guidance published in the US and the UK;
- reviewing and implementing a national Anti-Corruption Plan, modelled on the UK plan; and
- creating an independent Federal anti-corruption commission.
There appears to be a fundamental fracture in the present system of investigation and enforcement of foreign bribery laws in Australia. Throughout the 22 submissions lodged with the Senate:
- almost all describe Australia’s foreign bribery enforcement record as weak, poor or ineffectual;
- almost all, bar two, strongly encourage the abolition of the facilitation payment defence while one suggests if the defence remains, clear guidance should be published on payments that are permitted;
- several encourage a complete review of the current investigation and enforcement regime; and
- most submissions note the lack of a whole-of-government approach to targeting foreign bribery, with the result that there is as perception amongst business (and the community more generally) that prosecutions for illegal commercial conduct (foreign bribery) are rare, too hard and complex so just get on with your business, risky though it may be.
In over 15 years, we have seen only two prosecutions for offences under section 70 of the Criminal Code. The Securency case commenced in July 2011 and most details of it are suppressed in Australia. The Lifese foreign bribery prosecution commenced in February 2015. We have seen no corporate criminal liability prosecutions relating to foreign bribery (under sections 12.1 to 12.6 of the Criminal Code). We have seen no civil prosecutions for false or misleading books and records. We have seen ASIC spend almost six years pursuing former AWB directors and officers for alleged breaches of their duties arising out of the infamous AWB wheat sales to Iraq in the early 2000s, two agreed to fines and a disqualification period (the former Managing Director and Chief Financial Officer), two had their cases discontinued in late 2013 and two face trial listed to commence in October 2015.
Why is that? Is the law too difficult to enforce? There have been no substantive changes to the law so that can hardly be the issue. Are cases too hard to prove or is the CDPP seeking too high a threshold to prosecute (certainty of success rather than evidence of a reasonable basis to secure a conviction, as the CDPP Prosecution Policy promotes)? What role should ASIC and the AFP play and how can criminal and civil prosecutions be improved are key areas to review.
The national Fraud & Corruption Centre hosted by the AFP draws upon multi-agency skills and experience, yet still Australia sees or hears little about why there is so little enforcement. It is time to reassess the overall management of Australia’s national response to fraud, corruption and foreign bribery and to decide if it is important enough for political leadership to dedicate resources to the process consistent with Australia’s international obligations. We all like to be a Convention signatory but are we prepared to live up to convention obligations?