Australia's foreign bribery regime may be set for a significant overhaul in 2016 and 2017.
Australia's current foreign bribery legislative framework and approach to enforcement are under review, with the commencement of an Australian Senate inquiry in June 2015. A Senate-appointed committee is currently reviewing submissions from 40 organisations and individuals who have expressed views about the effectiveness of, and possible improvements to, Australia's measures against foreign bribery and the existing Commonwealth legislative framework governing foreign bribery.
The terms of reference for the Inquiry address several gaps and grey areas in Australia's existing foreign bribery regime, including the "facilitation payment" defence, lack of alignment with foreign peer jurisdictions in respect of offences, penalties, and protection of whistleblowers .
The submissions already reveal a number of clear themes: in particular, calls to expand the scope of Australia's current foreign bribery offences, abolish the facilitation payment defence, improve guidelines on the structure and operation of the foreign bribery regime, and expand the current regimes for protection of whistleblowers. Submissions frequently referred to US and UK practices as offering benchmarks for a comprehensive and thorough anti-bribery regime .
So, based on these themes, what big-ticket items are the most likely candidates for change in Australia, and why should you look out for them?
TOP 4 POTENTIAL CHANGES
1. Improved framework and scope of legislation
The majority of submissions received by the Senate Committee express the view that the current anti-bribery regime in Australia is inadequate. Most submissions advocate for the adoption of similar offences as are proscribed by US and UK laws. The most frequently mentioned additions included:
- Broadening the foreign bribery offence under Australia's Criminal Code legislation to include private instances of bribery, rather than just limiting the offence to public officials and
- Creating a books-and-records provision comparable to that in the US Foreign Corrupt Practices Act (FCPA), making it an offence for a corporation to fail to keep accurate financial records that record and explain its transactions.
There have also been suggestions of deploying a "debarment" type penalty from government contracts for those found guilty of bribery offences, with reference made to adopting a US-style Interagency Suspension & Debarment Committee.
Besides the scope of Australia's laws themselves, there was criticism of the lack of in-depth official guidance available for companies to navigate Australia's existing foreign bribery regime. A number of submissions cited the US Department of Justice’s Resource Guide to the US Foreign Corrupt Practices Act as a good example, setting out how bribery offence operate and providing the right level of detail and practical steps that can be taken to avoid engaging in an offence.
2. Culture of compliance
A significant number of submissions have called for a review of Australia's Criminal Code to better incorporate a clear offence for failure to maintain a culture of compliance. Some envisaged this as encompassing provisions to address the combined knowledge of corporate officers, the potentially mitigating features of a self-reporting regime and the introduction of enforceable undertakings requiring organisations to develop and implement anti-bribery compliance programs. Many also make a general call for improved guidance for addressing culture of compliance requirements, with an emphasis on identifying what internal compliance measures or programs would satisfactorily demonstrate a culture of compliance.
3. Removal of the facilitation payment defence
The majority of submissions advocate the removal of the facilitation payment defence. Many supported a notice and/or grace period to allow organisations to amend practices and implement revised procedures, ahead of the abolition of the defence. The minority who wrote in favour of retaining the defence argued that it was necessary for some small to medium sized enterprises operating in certain jurisdictions, and that the defence could be better monitored with increased scrutiny and improved guidance. Entities that engage in facilitation payment practices will also need to consider how any changes to the books and record provisions of Australia's foreign bribery regime will impact the way these payments are recorded.
4. Improved protection for whistleblowers
Several submissions criticised existing Australian protections for whistleblowers as inadequate, with no structured regime for private sector whistleblowers who reported foreign bribery. They pointed to the US and UK regimes, which protect whistleblowers against retaliation from employers and provide immunity or plea deals with reduced fines or sentences, as potential models for change. However, some expressed reservations about adopting a US False Claims Act-style reward system for whistleblowers in Australia.
The Senate Committee will provide a report to the Senate by July 2016, and the government will then determine what changes it will make, if any, to the foreign bribery legislative framework. It is unlikely that any of the above potential legislative and framework changes will come to fruition before 2017. But entities conducting business in Australia should be mindful that certain areas of the foreign bribery regime may be changing – and keep such possible changes in mind as they review and implement internal policies, particularly around a culture of compliance, accounting practices and treatment of whistleblowers.
DLA Piper will be tracking the Inquiry closely in Australia and will provide regular updates. To learn more, please contact the authors.