OECD report on Australia's approach to enforcement of bribery and corruption laws indicates increase in investigations
In April 2015, the Organisation for Economic Co-operation and Development (OECD) released its Phase 3 report into Australia's implementation of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
The report noted a significant increase in the number of Australian Federal Police (AFP) investigations, with approximately 16 current investigations into foreign bribery and corruption across a range of industries within the Asia Pacific region. In evaluating Australia's progress, the OECD reviewers noted improved inter-agency cooperation including the creation of the inter-agency Fraud and Anti-Corruption Centre, hosted by the AFP and including officials seconded from the Australian Tax Office, Australian Securities and Investments Commission ( ASIC ), Australian Crime Commission, Australian Customs and Border Protection Service, Department of Human Services, Department of Immigration and Border Protection, Department of Defence, and Department of Foreign Affairs and Trade.
ASIC has also foreshadowed an increased move to seek criminal fines against companies for failure to establish an adequate corporate culture. Whilst Australia still has no guidance in relation to the elements required to avoid such criminal liability, the AFP and the Attorney General's department have indicated that guidance in in relation to self-reporting of bribery and corruption issues, as one means to potentially reduce any criminal liability, is expected to be published sometime during 2015.
Increase in investigations by State anti-corruption bodies
Whilst investigations by the NSW Independent Commission Against Corruption ( ICAC ) received the most prominent news coverage, for the life sciences industry the most relevant investigation was the Western Australian Crime and Corruption Commission's report concerning public hospital officials and gifts and hospitality.
The Crime Commission's report released in June 2014 found that WA Health was considered to have inadequate measures in place to prevent fraud and corruption in its procurement activities, notwithstanding its expenditure of $3.6 billion on procurement in 2011-2012.
A key finding concerned the inadequacy of WA Health's gifts and hospitality policies and registers, which were not consistently maintained and often not applied to hospitality offered to, and accepted by, senior leaders (being public officials) within WA Health. Critically, the data in the gifts register was found to be unreliable with several gifts identified from major pharmaceutical suppliers to WA Health, yet the gift giver was described as not being in a commercial relationship with WA Health.
Significant international action - enforcement of China's bribery and corruptions laws
Whilst the US regulators continued to have a high level of enforcement in relation to bribery offences the last year has also seen a significant increase in prosecutions in other jurisdictions including in China. In September 2014, GlaxoSmithKline ( GSK ) was prosecuted by Chinese authorities and fined approximately A$600 million for bribing doctors and hospital officials with payments through travel agencies and industry associations.
In addition, GSK's internal investigation conducted by a third party consultant separately resulted in the lead investigator being prosecuted for breaching China's data privacy laws. GSK's lead investigator was arrested in Shanghai by Chinese police and later sentenced to almost three years imprisonment for acquiring personal information about Chinese citizens in the course of the investigation. When allegations of bribery and corruption arise concerning China, those tasked with undertaking the initial internal investigation will need to set strict protocols and controls concerning any collection and dissemination of data during the course of an investigation, to ensure compliance with China's data privacy laws.