Australian
companies
and directors
must also
understand
legislation
IN other
jurisdictions.
ANTI-BRIBERY AND
CORRUPTION
Strengthened by the enactment of new offences,
increased penalties and larger budgets, regulators
around the globe have been increasingly aggressive
in the investigation and enforcement of anti-bribery
and corruption laws. Australia is no exception.
legislation in other jurisdictions. The most relevant
jurisdictions are the United States and the
United Kingdom, which have particularly onerous
provisions coupled with strong enforcement and
prosecution cultures.
The consequences of breaching these laws can
be serious. In a number of cases overseas, severe
penalties (including incarceration) and fines have
been imposed on individuals and corporations
for direct involvement in bribery and corruption,
breaches of relevant legislation and/or failing
to mitigate the risk of bribery and corruption by
implementing a robust compliance program.
Indeed, the consequences are more far-reaching
and include reputational damage as well as a loss
of confidence amongst employees and business
counterparts.
Both locally and globally, the potential for corporate
liability has seen an increased focus on the
development and implementation of compliance
programs. Implementing an appropriate anti-bribery
compliance regime is critical to demonstrate a
culture of compliance.
As the global economy becomes increasingly
integrated, regulators are also co-operating across
international boundaries and focusing on high-risk
regions. This means that as well as being subject
to Australian anti-bribery and corruption legislation,
Australian companies and directors (or companies
doing business in Australia) must also understand
73 | Doing Business in Australia
Corruption Risks in
Australia
Transparency International’s 2013 Corruption
Perception Index lists Australia as the ninth
least corrupt country in the world. While this
ranking may give the perception that Australia is
a comparatively low-risk environment, there has
been a recent focus on anti-bribery and corruption
following a series of high-profile cases, including:
• the New South Wales Independent Commission
Against Corruption’s (ICAC) investigations into
Australian Water Holdings Pty Ltd which have
resulted in the resignation of the Premier and
several Ministers of the New South Wales State
Government;
• the first criminal prosecution under Australia’s
laws prohibiting the bribery of foreign public
officials of Securency International Pty Ltd and
Note Printing Australia Pty Ltd;
• the Australian Securities and Investment
Commission’s (ASIC) civil actions against six
former officers of AWB Ltd;
• the Australian Federal Police’s (AFP)
investigation into Leighton Holdings Ltd
regarding alleged foreign bribery offences; and
• the Royal Commission into Trade Union
Governance and Corruption.
Australia is a party to the OECD Anti-Bribery
Convention (which provides the international
framework for laws dealing with transnational
bribery) and is therefore subject to ongoing
progress reports. While the OECD’s Phase 3
Report on Implementing the OECD Anti-Bribery
Convention in Australia (October 2012) welcomed
recent efforts, it clearly signalled that Australia must
work harder through investigation and enforcement
to stamp out foreign bribery.
As a consequence of these matters, local and
international stakeholders (including the legislature,
NGOs and the media) are paying closer attention
to Australia’s level of commitment to the war on
bribery and corruption.
Law enforcement
Given the federal nature of the Australian system
of government, there is no single government anticorruption policy. Each jurisdiction has different
laws (statute and common law) to deal with bribery
and corruption.
The investigation of bribery and corruption
offences is divided between the AFP, ASIC
and the State and Territory police forces. An
investigation is referred to the relevant Director of
Public Prosecutions who then decides whether to
prosecute the matter.
In addition, there are a number of independent
commissions at both the Federal and the State
level to investigate possible corruption of public
Each australian jurisdiction has different
laws (statute and common law) to deal
with bribery and corruption.
officials (including politicians) and police. The ICAC
in New South Wales is an example of such a body.
While these commissions cannot charge individuals
or corporations with offences, they have wideranging investigative powers. Reports following an
investigation can be given to the police for further
investigation, Parliament, or released publicly.
Domestic bribery
Bribery of a Commonwealth public official
It is an offence under the Criminal Code Act 1995
(Cth) to dishonestly provide or offer to someone
(directly or indirectly) a benefit with the intention of
influencing a Commonwealth public official in the
exercise of their duties or where the receipt of the
benefit would tend to influence a Commonwealth
public official in the exercise of their duties.
the benefit cannot be determined) up to 10% of the
annual turnover of the corporate group.
Similar offences exist for Commonwealth public
officials who receive such bribes/corrupting
benefits, or abuse their public office.
Persons who aid, abet, counsel or procure the
commission of an offence by another person are
taken to have committed the offence.
Finally, conviction for bribery offences could lead
to possible penalties or forfeiture of profit under
proceeds of crime legislation.
State/Territory public officials
“Benefit” is broadly defined to include any
advantage and is not limited to money or property.
There are offences in State and Territory laws for
corruptly giving or offering an inducement or reward
to an agent for doing or not doing something
regarding the affairs of the agent’s principal. It
is also an offence to aid, abet, counsel, procure,
solicit or incite the commission of these offences.
“Commonwealth public official” covers all
employees of the Commonwealth and any
Commonwealth authority.
The penalties differ in each State and Territory but
for individuals can include a fine and/or up to 10
years’ imprisonment.
Penalties
Bribery offence at common law
Individuals found guilty of bribing a Commonwealth
public official face up to 10 years’ imprisonment
and/or a fine of up to A$1.7 m.
It is also an offence at common law to offer or
receive any undue reward to or by any person
in public office in order to influence that person’s
behaviour in that office.
For companies, it’s the greater of a fine of up to
A$17 million, a disgorgement penalty of up to
three times the value of the benefit reasonably
attributable to the conduct or (where the value of
74 | Doing Business in Australia
Commercial bribery
Generally speaking, the above State and Territory
laws prohibiting the giving or receipt of corrupt
commissions or rewards also apply to rewards
given to employees or agents of private or public
companies and individuals.
An employee who receives a bribe will likely also
contravene the Corporations Act 2001 (Cth) and
faces a pecuniary penalty of up to $200,000, a
disqualification order or a compensation order.
Foreign bribery
Australia implemented the OECD Convention on
Combating Bribery of Foreign Public Officials in
International Business Transactions in 1999 by
enacting the anti-bribery and corruption provisions
in the Criminal Code.
Under the Criminal Code, it is an offence to provide
or offer to someone (directly or indirectly) a benefit
that is not legitimately due to that person with the
intention of influencing a foreign public official in the
exercise of their duties in order to obtain or retain
business or a business advantage.
“Foreign Public Official” includes employees,
contractors or officials of a foreign government
department or agency, a foreign controlled
company or public international organisation,
members of a foreign military or police force or
members of the executive, judiciary or magistracy
of a foreign country.
Australian authorities can prosecute companies and
individuals for such offences provided a sufficient
connection can be established between the entity
under investigation and Australia. More specifically,
the conduct constituting the offence must occur
wholly or partly within Australia, or wholly or
partially on board an Australian aircraft or ship.
The offence will also apply where the conduct is
committed wholly outside Australia, but at the time
of the offence, the person who is alleged to have
committed it is an Australian citizen, a resident of
Australia, or an Australian corporation.
Defences are available in two circumstances:
• where the conduct was lawful in the foreign
public official’s country (in the sense that it is
permitted or required by written law); or
• where a payment is a facilitation payment made
to expedite or secure the performance of a
routine government action of a minor nature and
the payment is of minor value.
“Routine government action” excludes a decision
about the awarding of new business, continuing
existing business, or the terms of new or existing
business. To rely on this exception companies must
demonstrate that they have appropriate recording
keeping procedures which include adequately
recording the value, date, recipient and the purpose
of any transaction with a foreign public official.
Australia is currently considering removing the
“facilitation payment” defence from the statute book.
with the AFP declaring foreign bribery a key
Organisational priority, it is likely that
there will be more foreign bribery prosecutions
in Australia in coming years.
The foreign bribery offence gives rise to obvious compliance risks for companies doing business in highrisk environments – in particular where those activities are carried on by agents, or through joint venture
vehicles. Thorough due diligence and ongoing monitoring (together with the existence of an anti-bribery
compliance program) will help to minimise risk in this area.
Penalties under the Criminal Code for foreign bribery offences mirror the domestic bribery offences for
bribery of a Commonwealth public official.
Corporate liability
Under the Criminal Code, corporations can be held to be criminally responsible for the conduct of a
corporate agent in a range of situations, in particular where the corporate culture directs, encourages,
tolerates, or leads to breaches of the legislation, or where the company fails to create or maintain a
corporate culture that requires compliance with the legislation.
Gifts/hospitality to Australian public
officials
Greater care needs to be taken with provision of gifts/hospitality to Australian public officials than to private
sector employees.
Australian public officials are usually subject to additional guidelines. For example, each Commonwealth,
State and Territory government has its own public service with its own code of conduct.
These codes of conduct are often supplemented by agency-specific codes of conduct.
There are no “generally allowable limits” for gifts/hospitality to public officials, although some agencyspecific codes of conduct may specify dollar limits. Although it will depend on the applicable guidelines,
generally speaking:
• gifts of more than token value, or excessive hospitality, should be avoided; and
• it will usually be inappropriate to pay for transport or accommodation of a public official (without prior
approval from the relevant agency).
75 | Doing Business in Australia
What next for Australia?
In September 2011 the Commonwealth Government announced a commitment to developing a National
Anti-Corruption Plan.
Despite a public consultation process which concluded in 2012, a National Plan has yet to be released.
Nevertheless, it is hoped that this will eventuate and that Australia will see a stronger
and more cohesive approach to corruption.
As more and more Australian businesses continue to expand into offshore markets, and with the AFP
declaring foreign bribery a key organisational priority, it is likely that there will be more foreign bribery
prosecutions in Australia in coming years.