Today’s post is from Robert Wyld (Johnson Winter & Slattery), the Australia Expert for FCPA Professor.
This post highlights a range of important developments in Australia and the Asia Pacific Region in the area of foreign bribery policy, investigations and regulation through August 2014. Issues covered include:
- Australia’s agenda for the G20 November meetings;
- Whistleblower protections;
- Australian courts and “super injunctions”;
- Australian foreign bribery investigations and prosecutions – media updates;
- New Zealand amendments to foreign bribery and other economic crime laws; and
- Asia-Pacific Anti-Corruption Network
Australia’s G20 Anti-Corruption Agenda
The Australian Government has a significant opportunity to proactively shape the anti-corruption agenda at the forthcoming meeting of G20 countries in Brisbane in November 2014. Senior members of the Attorney General’s Department (AGD) are leading the way, seeking to develop initiatives for consideration by all G20 countries.
The Action Plan of 2012 is due to expire in 2014. The AGD is focusing on three key priorities:
- developing rules for the disclosure of beneficial ownerships;
- combating foreign bribery; and
- promoting judicial integrity.
There is a broadly held view that corporate or other structures are regularly used to engage in economic crime, including corruption, and transparency is required to identity the beneficial ownership of a particular entity. Together with targeting foreign bribery and corruption, the G20 governments regard these topics as of high priority. Each G20 country is to prepare a detailed self-assessment of their performance as against the OECD Convention criteria. Once principles are agreed upon, they will be made public by the G20 leaders.
In terms of any National Anti-Corruption Plan, promoted by the former Labor Government, the Plan appears to have died due to government inactivity and it is not clear whether it will be resuscitated. The public perception from the media is that the current government is not interested in any over-arching Commonwealth anti-corruption body. This is disappointing as history tells us that wherever governments make decisions worth significant money, the existence of corruption rears its head.
ASIC and Whistleblower Protections
The role of protections for whistleblowers is not going away despite the apparent lack of focus within ASIC (Australian Securities and Investments Commission) to manage whistleblower complaints.
On 26 June 2014, the Australian Senate Economics Reference Committee released its report into the ongoing review of ASIC. The Committee made a number of key recommendations:
- that ASIC establish an “Office of the Whistleblower”;
- that existing laws should be extended to cover anonymous disclosures;
- the “good faith” requirement for protected disclosures under the Corporations Act 2001 (Cth) be repealed;
- the Government explore options to incentivise whistleblowers through a rewards-based system (as currently existing in the US under the Exchange Act).
It will be interesting to see how this last point develops. In the past, the Chairman of ASIC has publicly started he does not favour a scheme that rewards whistleblowers, believing that a reward will in some way corrupt the value of the evidence and undermine a whistleblower’s credibility (although that has not been a problem in the US to date).
Australian Courts and Super Injunctions
Australia is a signatory to the OECD Anti-Bribery Convention. Article 5 of the Convention reads as follows:
“Investigation and prosecution of the bribery of a foreign public official shall be subject to the applicable rules and principles of each Party. They shall not be influenced by considerations of national economic interest, the potential effect upon relations with another State or the identity of the natural or legal persons involved.”
This principle is reflected in the Prosecution Guidelines issued by the Commonwealth Director of Public Prosecutions (CDPP) where, in Annexure A to the Guidelines dealing with prosecutions for foreign bribery, it is made clear a prosecutor must not be influenced by the factors identified in Article 5 of the OECD Convention. It should be noted that the CDPP has issued Guidelines for Suppression Orders (as at May 2013). These Guidelines acknowledge that while the fundamental principle of open justice should prevail, circumstances involving “national security”, “ensuring a fair trial” and the “protection of vulnerable witnesses” may justify suppression orders.
In June 2014, unbeknown to anyone outside a select group of litigants, the Victorian Supreme Court issued what is known as a “super injunction” in Australia’s prominent foreign bribery case. This injunction prevents the media from reporting anything about the case, the terms of the order or the identity of various persons named in the order. These orders have now been published on the internet by WikiLeaks and have been republished across a range of Asian media. These types of orders, secured in secrecy and imposing draconian contempt penalties for any contravention, sit very uncomfortably with Australia’s international obligations and the principle of open justice. Indeed, when the internet is free to publish such orders and they are republished across the regional media, one can only conclude that such orders are ineffective and are driven by unknown and unstated political or economic or other reasons. The only party that can explain the need for such orders is the Commonwealth Government, yet it remains conveniently silent, no doubt relying on that well-worn phrase “you may think that but I could not possibly comment”.
New Zealand Amends Anti-Corruption Laws and Penalties
The New Zealand Government has published the Organised Crime and Anti-Corruption Bill in Parliament to update its economic crime laws, to allow for a greater degree of international agency collaboration and to reflect the country’s obligations under the OECD and United Nations Conventions.
The principal features of the Bill, in so far as anti-corruption laws are concerned, include the following:
- authorising the NZ Police to share personal information with their international counterparts;
- creating a criminal offence to accept a bribe from a foreign public official (attacking the demand side of corruption);
- creating a criminal offence to accept a bribe for using one’s influence over an official (referred to as “trading in influence”);
- clarifying the circumstances under which a body corporate commits the criminal offence of bribery and corruption;
- making it clear that a foreign bribery offence can be prosecuted whether or not the conduct is an offence in the country in which the conduct occurred;
- increasing the maximum penalty for imprisonment for a bribery and corruption conviction from 2 years to 7 years;
- including bribery and corruption offences as a “crime involving dishonesty”;
- requiring companies to record facilitation payments (permitted under the NZ Crimes Act) in a consistent manner under the Companies Act; and
- amending the Income Tax Act to ensure bribes are not tax-deductible.
These are important changes and while the maintenance of facilitation payments is still regrettable, the laws demonstrate the NZ Government’s commitment to bringing its domestic laws into harmony with those of other OECD member countries.
Asia-Pacific Anti-Corruption Network
The recent meeting of the APEC Network of Ant-Corruption Authorities and Law Enforcement Agencies, or ACT-NET in Beijing announced the commencement of a new channel or platform for regulatory agencies to exchange information targeting large scale corruption and bribery in the Asia Pacific region. The secretariat will by initially hosted by China, based in Beijing and the Chinese Ministry of Supervision will manage the information sharing in an institutional capacity.
As Fu Kui, Vice Minister of China’s National Bureau of Corruption Prevention said:
“As domestic anti-corruption efforts intensify, corrupt officials flee abroad and remain at large by taking advantage of legal differences between our jurisdictions…this is a serious challenge to each economy’s rule of law. By building a multilateral platform to strengthen work-level exchange and case cooperation, and expand channels for anti-corruption and law enforcement partnership, we could cut off the escape route of corrupt fugitives.”
Regarding the above-referenced New Zealand bill, it – like the FCPA-like laws of many other OECD member countries that recognize corporate criminal liability – contains compliance-defense concepts. Specifically, the bill states: ”a body corporate or corporation sole does not commit an offence … if it has taken reasonable steps to prevent the offence.”