The Australian Government has finally re-enacted a Bill to reform important parts of Australia’s foreign bribery laws, many years after the Australian Senate and numerous parliamentary committees called for reform. Historically, Australia has had a poor record of investigation and enforcement of these laws, and has been regularly criticised by the OECD under the country reviews performed on Australia’s compliance with its obligations under the OECD Anti-Bribery Convention. It is hoped these reforms will go some way to address long-standing concerns and facilitate a better process for the investigation and prosecution of foreign bribery.
On 22 June 2023, the Australian Attorney General introduced the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023 (the Bill) into the Australian Parliament (see Bill). The Bill seeks to enact various reforms to the Criminal Code Act 1995 (Cth) (Code) that have been dormant for many years under the former, conservative government and languished at least twice, with no apparent political will to enact them.
While these reforms are commendable, they lack the one reform that will make a real difference to business, a legislative deferred prosecution agreement (DPA) scheme to provide much needed certainty for a business that wishes to voluntarily disclose potential criminal conduct. Regrettably the DPA scheme, included in earlier draft bills, has not been included despite widespread bipartisan legislative support. This is likely to mean Australian businesses will still think twice about engaging with the investigative agency (the Australian Federal Police, AFP) and prosecution agency (the Commonwealth Director of Public Prosecutions, CDPP) and instead, subject the company to the unpredictable criminal justice system.
The Bill’s Key Features
The Bill’s key features include the following:
Analysis of the Proposed Amendments
The broad changes to the Code (section 70.2 where the offence of bribery of a foreign public official lies) are welcomed. They seek to simplify the complex elements of an offence that has proved notoriously difficult for the AFP to investigate and for the CDPP to prosecute.
The most important of these changes is to change the key threshold test of a benefit that is “not legitimately due” to a test of whether the conduct constitutes the “improperly influencing” of a foreign public official (presently defined very broadly). It remains to be seen how Australian authorities and the courts will interpret “improper” in the context of “improperly influencing” a relevant official. Misconduct generally means wrongful, improper or unlawful conduct motivated by a premeditated, obstinate or intentional purpose. This will have to be considered in the context of the physical and mental elements prescribed in the Code for determining criminal liability and the Bill’s requirement that what constitutes “improperly influencing” is a matter of fact for the jury (as Commonwealth criminal offences must only be tried before a jury, not a judge sitting alone, as can occur with various State criminal offences) where certain factors are set out to be or not to be taken into account.
New Indictable Office for Failing to Prevent Foreign Bribery
The new offence, directed to Australian corporations, is in substance, that a corporation commits an offence if an associate of the corporation engages in conduct that would constitute an offence under s 70.2 of the Code and the conduct is undertaken for the profit or gain of the corporation.
Key features of the new offence are as follows:
This offence is drawn from the corporate foreign bribery offence in the UK, known as the section 7 Bribery Act 2010 offence. Unfortunately, unlike the UK, the Australian Government has decided to introduce these offences without the key feature to really encourage corporations to voluntarily self-disclose misconduct: a statutory DPA scheme. Such a scheme existed in earlier iterations of the Bill under the former government. It exists in the UK and has proved a great weapon for the Serious Fraud Office to tackle foreign bribery and provide a degree of certainty that now, a decade later with substantial fines and numerous DPAs in place, is well-known by corporations and their legal advisors. Yet Australia chooses to ignore these obvious tools and rely on the good sense of the business community to avoid, where possible, the traditional criminal justice system. This is unlikely to generate the results that the AFP and the CDPP might be hoping for (notwithstanding the CDPP’s Best Practice Guidelines to self-reporting foreign bribery offences, see Guidelines), as defence counsel will necessarily think long and hard about whether to roll the dice.
What are the “adequate procedures” that a corporation should have in place? The Bill is silent on them. In late 2019, the former government issued a consultation paper on what the procedures might be and a draft guidance (see Draft Guidance). Nothing further has occurred. Until the Australian Government publishes a guidance applicable to the Bill, corporations should consider the draft guidance from 2019 and the well-established Guidance under the UK Bribery Act 2010 published by the UK Ministry of Justice (see UK Guidance).
An example of why the lack of a DPA scheme can prove troubling is found in the Jacobs foreign bribery prosecution.
This shows that despite an early disclosure by Jacobs, it spent the next decade engaged in dialogue and then contested court hearings with the CDPP.
As a side note, the CDPP had 5 individuals to prosecute. In the end:
This raises some interesting issues where Jacobs, for its own reasons and considering certain different legal tests pleaded guilty to the very conduct for which a jury not only acquitted the individuals but the CDPP abandoned all other cases. Hardly a ringing endorsement of the process.
Conclusion – An Opportunity Missed?
Whether a DPA might have avoided the difficulties the authorities experienced in the Jacobs case, and indeed, the defendants with over a decade of investigation and prosecution, remains to be seen. Unfortunately, a traditionally aggressive criminal law approach to corporate crime can prove costly on all sides. This is what DPAs were designed to avoid and to provide a clear pathway for corporations to voluntarily report potential illegal conduct. Sadly, the Bill has not given corporations or the regulatory agencies the tools so well used overseas, to really tackle foreign bribery.
Overall, the objects of the Bill are long overdue and may provide assistance to the AFP and CDPP in their quest to investigate and prosecute Australian businesses where foreign bribery is suspected. It is disappointing that the Australian Government lost an opportunity to introduce a DPA scheme. This means Australian business continues to have to navigate the complex world of plea deals and a prosecutorial mentality that says once you are charged, that is it, just plead guilty and put your mitigating circumstances to the Court. Experiences in the US, the UK and more recently France, are demonstrating the value of DPAs. Hopefully, the DPA reforms will be introduced in the near future.
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