New laws to help stamp out foreign bribery offences
The Morrison Government is strengthening Australia’s foreign bribery laws to help crackdown on corporations and employees that improperly influence foreign officials.
The Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019, to be tabled in the Senate today, brings Australia into line with many of our major trading partners such as the United States and Britain, which have already taken significant steps to stamp out foreign bribery.
Most significantly, the Bill creates a new offence for corporations of failing to prevent foreign bribery, carrying a maximum penalty of either $21 million, 10 per cent of annual turnover, or three times the benefit gained – whichever is greatest.
This measure holds companies directly liable for the foreign bribery activities of their employees, external contractors, agents and subsidiaries, unless the business can demonstrate that it had “adequate procedures” in place to minimise risks.
The Bill would apply to the activities of companies and employees overseas and in Australia where the activity involves an effort to improperly influence a foreign official.
Adequate procedures include maintaining effective and proportionate compliance and enforcement strategies, risk assessments and due diligence, whistle-blower reporting mechanisms, staff training and the promotion of a strong integrity culture at all levels, including company boardrooms.
To assist companies in creating these adequate procedures, the Government released draft guidance for public consultation, with submission sought by the end of February 2020.
The Bill also includes a deferred prosecution agreement (DPA) scheme, which gives law enforcement agencies a new tool to uncover corporate misconduct. It also gives companies a strong incentive to cooperate with those authorities, including through self-reporting suspicious behaviour by their staff.
Under the scheme, organisations that pay an appropriate financial penalty and cooperate fully with the conditions of the DPA may not face prosecution themselves. The scheme will include appropriate safeguards to ensure DPAs are in the interests of justice.
Attorney-General and Minister for Industrial Relations, Christian Porter, said foreign bribery needed to be stamped out as it helped to entrench corruption in developing countries and gave dishonest companies an unfair advantage over their competitors.
“Companies that view foreign bribery as simply the cost of doing business overseas are creating an uneven playing field which unfairly penalises businesses who do the right thing and play by the rules,” Mr Porter said.
“This Bill addresses gaps identified by prosecutors and law enforcement agencies in existing legislation and will make it easier to investigate bribery offences and secure convictions.
“The Bill also puts the onus squarely on corporations to get their own houses in order by encouraging them to put effective controls and safeguards in place to prevent bribery from happening in the first place.
“Companies that fail to take that action will pay a very high price if bribery offences are detected.”
Examples of significant penalties levied against major companies in other jurisdictions include:
- Rolls Royce paid financial penalties of approximately $US 800 million following actions against them in the US, UK and Brazil.
- In March 2019, MTS (the largest mobile telecommunications company in Russia) and its Uzbek subsidiary agreed to pay a combined total penalty of $US 850 million to the US.
- In December 2017, Keppel Offshore Marine Ltd and its subsidiary agreed to pay a penalty of $US 422 million to the US, Singapore and Brazil for its involvement arising out of a decade-long scheme to pay millions of dollars in bribes to officials in Brazil.