by David Lehmann | Jul 02, 2015
In recent weeks, the press has shone a big spot light on corruption issues. These range from:
 
Numerous arrests of officials relating to corruption allegations and the ensuing scrutiny of Football Federation Australia’s (FFA) 2022 World Cup bid, causing an unravelling of the “beautiful game’s” governing body, FIFA.
A property deal in Melbourne with kickbacks allegedly made to senior government officials within Malaysian government.
Australian and Papua New Guinean lawyers being caught on camera providing the ‘how to’ manual of bribe paying and money laundering.
 
It makes for interesting reading and affirms how pervasive and cross jurisdictional corruption is in our global society.
 
The increasing number of bribery and corruption issues reported in the press (and our low levels of enforcement of anti-corruption legislation) show that, when compared to other Western countries such as the United States and the United Kingdom, Australia has dragged its heels in respect of the refrom and enforcement of our anti-corruption legislation.
 
While Australians are generally compelled by the ethos of a ‘fair go’ for everyone, bribery and corruption does the opposite.  It is in this context that last week’s announcement that the Australian Senate will hold an inquiry into foreign bribery is a much welcomed development. We’ve set out the terms of reference in the box below.
 
Any interested party will be able to make a submission about foreign bribery to assist the Senate Committee make recommendations for much-needed reform.
 

Our KordaMentha Forensic practitioners have dealt with bribery and corruption issues in many different contexts, both in the public and private sectors in Australia and overseas. The types of matters that KordaMentha professionals have worked on in their careers prior to and whilst at KordaMentha include:
 
Investigations
 
A global investigation that produced the largest Foreign Corrupt Practices Act (FCPA) settlement to date.
Global Petroleum Company – investigated the circumstances relating to certain payments relating to the construction of a fuel depot at the Manila International Airport.
 
Compliance reviews
 
Subsidiary of global diversified technology company – conducted an anti-corruption compliance review of one of its business partners in Malaysia. The business partner had been engaged to assist in procuring a pilot project for the installation of LED lighting on a number of motorways. A number of corruption ‘red flags’ were identified and reported to the company.
Australian subsidiary of mining equipment manufacturer – ahead of the acquisition of the global business, conducted an anti-corruption compliance review. For one contract to supply equipment to a Chinese coal miner, a ‘donation’ prior to award of the contract was identified.
 
Integrity due diligence
Conducted numerous pre and post-merger and acquisition integrity due diligence investigations on behalf of US companies. One of the main objectives of these reviews was to ascertain whether the merger or acquisition target had a history of involvement in corrupt activities.
Based on the collective knowledge gained from this experience we have undertaken to provide our views on the matters contained within the terms of reference for the inquiry.
 
The Senate inquiry will commence on 1 July 2015, with its report to be tabled on 1 July 2016. The terms of reference of the inquiry include, but are not limited to:
 
the measures governing the activities of Australian corporations, entities, organisations, individuals, government and related parties with respect to foreign bribery, with specific reference to the effectiveness of, and any possible improvements to, Australia‘s implementation of its obligations under:
the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Convention), and
the United Nations Convention against Corruption (UNCAC); and
as part of, or in addition to, paragraph (a), the effectiveness of, and any possible improvements to, existing Commonwealth legislation governing foreign bribery, including:
Commonwealth treaties, agreements, jurisdictional reach, and other measures for gathering information and evidence,
the resourcing, effectiveness and structure of Commonwealth agencies and statutory bodies to investigate and, where appropriate, prosecute under the legislation, including cooperation between bodies,
standards of admissible evidence,
the range of penalties available to the courts, including debarment from government contracts and programs,
the statute of limitations,
the range of offences, for example:
false accounting along the lines of the books and records’ head in the US Foreign Corrupt Practices Act,
increased focus on the offence of failure to create a corporate culture of compliance’,
liability of directors and senior managers who do not implement a corporate culture of compliance, and
liability of parent companies for subsidiaries and intermediaries, including joint ventures,
measures to encourage self-reporting, including but not limited to, civil resolutions, settlements, negotiations, plea bargains, enforceable undertakings and deferred prosecution agreements,
official guidance to corporations and others as to what is a ‘culture of compliance’ and a good anti-bribery compliance program,
private sector whistleblower protection and other incentives to report foreign bribery,
facilitation payment defence,
use of suppression orders in prosecutions,
foreign bribery not involving foreign public officials, for example, company to company or international sporting bodies,
the economic impact, including compliance and reporting costs, of foreign bribery…’