17 August 2017

In August 2015, KordaMentha made a written submission to the Senate Economics References Committee (the Committee) into foreign bribery. The following year, in May 2016, we also provided a response to the Australian Attorney General’s Office public consultation paper relating to the consideration of a Deferred Prosecution Agreements scheme in Australia.

On Monday 7 August 2017, on behalf of KordaMentha, I attended the Committee hearings in Sydney, where I was afforded the opportunity to answer questions from Committee members about the recommendations made in our submissions. Our written submission and opening statement to the Committee reflects our views on the issue of foreign bribery. A copy of the Hansard transcript of our opening statement and responses to the Committee can be accessed via the Committee’s website.

The public hearings indicate that the Committee is now moving closer to issuing its much anticipated report, which we are reliably informed is likely to be in December 2017.

Aside from the Committee’s soon to be issued report, an Exposure Draft of an Amendment Bill to the Australian Criminal Code, dated 31 March 2017, contains significant proposed changes to the current legislation, including:

  • Repeal of the current foreign bribery offence; to be replaced by an offence that, in relation to the benefit provided to a foreign public official, includes the ‘intention of improperly influencing’ that foreign public official (Section 70.2)
  • A new offence of Recklessly bribing a foreign public official (Section 70.2A)
  • Explanation and guidance about the application of ‘improper influence’ (Section 70.2B).

Most significantly, in our minds, is the introduction of a new offence of ‘Failing to prevent bribery of a foreign public official’ (Section 70.5A).

Similar to the UK Bribery Act offence, this new provision provides for ‘absolute liability’ for corporations that fail to prevent foreign bribery where an ‘associate’ of a corporation commits an offence against Sections 70.2 or 70.2A.

Section 70.5A (5) provides for an exception to this offence, being that the corporation had in place ‘adequate procedures’ to prevent the commission of an offence against Section 70.2 and 70.2A.

Section 70.5B imposes an obligation on ‘the Minister’ to publish guidance on the steps that a corporation can take to prevent an associate from bribing foreign public officials. We anticipate that this will reflect guidance similar to that contained in the UK Bribery Act Adequate Procedures guidance and the Foreign Corrupt Practices Act (FCPA) Resources guide.

Other significant developments include the passing of the Fair Work (Registered Organisations) Bill 2014 in late 2016. In addition to creating the Registered Organisations Commission (ROC) to oversee 100 federally registered unions and employer associations, the legislation broadened the range of persons who could make a protected disclosure and introduced prohibitions of reprisal action against whistleblowers.

Significantly, the Government has provided a written commitment to independent Senators that it will extend this new framework of whistleblower protection to companies and public sector employers within 18 months.

These current and proposed changes are a big step in the right direction towards more effectively dealing with foreign bribery and other serious crime.
 

About the author

David Lehmann is a Director in the Forensic practice of KordaMentha based in Melbourne. He has significant law enforcement and private sector experience investigating serious crime, such as fraud and corruption and provides our clients with advice about mitigation strategies for these and other risk issues. He regularly presents and writes articles on these and related subjects. Other publications by David, include:
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