This country-specific Q&A provides an overview to bribery & corruption law in Australia.
It will cover the definition of bribery, regulation, compliance, liability and enforcement as well as insight and opinion and any upcoming legal changes planned for their respective country.
This Q&A is part of the global guide. For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/practice-areas/bribery-corruption/
What is the legal framework (legislation/regulations) governing bribery and corruption in your jurisdiction?
In Australia, public bribery is regulated by criminal laws at the state, territory and federal levels. Private bribery is a criminal offence at the state and territory level.
At the federal level, all of the key offences are contained within the Criminal Code Act 1995 (Cth) (Criminal Code) and both individuals and corporations may be charged. The key offences are:
- bribing or providing a corrupting benefit to a Commonwealth public official and the receipt of a bribe or a corrupting benefit by a Commonwealth public official;
- bribing a foreign public official; and
- making, altering, destroying or concealing an accounting document, or failing to make an accounting document that the person is under a duty to make, with the intention of, or reckless as to whether it would, facilitate, conceal or disguise the receiving or giving of a bribe, a benefit that is not legitimately due or a loss that is not legitimately incurred.
There are separate pieces of legislation in each state and territory of Australia which set out criminal offences in relation to the giving and receiving of bribes to non-Commonwealth public official and also to private persons in some circumstances. There also remain a number of bribery offences under the common law.
Which authorities have jurisdiction to investigate and prosecute bribery in your jurisdiction?
The Australian Federal Police (AFP) investigates bribery and corruption allegations at a federal level. State and territory police investigate pursuant to state and territory laws.
Generally, at a federal level, prosecutions are undertaken by the Commonwealth Director of Public Prosecutions (CDPP). Although the AFP is authorised to commence a prosecution, the CDPP may determine that a prosecution commenced by the AFP should not proceed.
At the state and territory level, the relevant state or territory department of public prosecutions would be involved in conjunction with the state or territory police.
The Australian Securities and Investments Commission is the main corporate regulator and may be involved in investigations and prosecutions into corrupt conduct where an Australian corporation is involved, particularly for offences relating to false company records.
How is bribery defined?
The definition differs slightly depending on the category of prohibited conduct.
Bribery of Commonwealth public officials involves dishonestly providing or offering a benefit (or causing it to be provided or offered) to a Commonwealth public official. The intention must be to influence the official in the exercise of the official’s duties. The benefit may be intangible, such as the provision of hospitality or entertainment.
The above definition applies to bribery of foreign public officials, save that the intention must be to influence the foreign official in the exercise of the official's duties in order to obtain or retain a business advantage that is not legitimately due, and the benefit being given must not be legitimately due.
The definitions for bribery of state or territory public officials and private bribery vary slightly between each state and territory.
Does the law distinguish between bribery of a public official and bribery of private persons? If so, how is ‘public official’ defined? Are there different definitions for bribery of a public official and bribery of a private person?
Australian laws do distinguish between bribery of a public official and bribery of private persons.
A foreign public official is defined broadly under Australian law and includes employees or officials of foreign government bodies (including military or police), contractors to foreign government bodies, intermediaries of foreign public officials, members of the judiciary of a foreign country, employees of public international (inter- governmental) organizations, persons performing duties for an office under a law of that country, and any person in the service of a foreign government body.
The definition of a Commonwealth public official expressly includes Commonwealth of Australia public service employees, defence force members, members of the AFP, service providers contracted to the Commonwealth, members of statutorily appointed bodies (such as chancellors of universities) or Commonwealth holders of office such as members of parliament, judicial officers and the Governor-General. Whether employees of publicly-owned companies in Australia will be deemed to be Commonwealth public officials will primarily depend on whether they are considered to be employed by the Commonwealth and whether they exercise powers or perform functions conferred on them by a law of the Commonwealth.
Australian state and territory laws have similarly broad definitions, though specific laws apply to different types of state or territory public officials.
The scope of private bribery offences vary between Australian states and territories. For example, in the state of New South Wales, the law prohibiting private bribery is primarily directed towards agents who receive corrupt benefits as an inducement or reward in relation to the business affairs of the agent's principal. Both the agent receiving and the person giving the benefit commit an offence, although the principal does not.
What are the civil consequences of bribery in your jurisdiction?
In Australia, bribery is a criminal offence both at federal, state and territory levels.
There have been non-criminal cases against directors who have been found to have breached their director's duties in failing to identify and prevent bribery within their organisations. There have also been civil class-actions by shareholders against listed companies who have been investigated for corruption.
It is possible for companies or individuals who have been negatively impacted by another's bribery (e.g. a losing bidder) to bring a civil claim in relation to losses suffered.
What are the criminal consequences of bribery in your jurisdiction?
The criminal consequences of bribery in Australia are:
- fines for an individual or corporation. These are available for the offences of domestic and foreign public bribery, domestic private bribery, or false accounting. The highest penalties are for a corporation found guilty of bribing a foreign or Commonwealth public official where the maximum fine is 100,000 penalty units (currently equal to AUD 2.1 million) or three times the value of the benefit (if it can be determined) or 10% of the annual turnover of the company during 12 months ending at the end of the month in which the conduct occurred. For false accounting offences, the maximum fine depends on whether the offence was committed recklessly or intentionally, with the penalty for intentional conduct currently being double the amount for reckless conduct; and/or
- imprisonment of an individual for the offences of domestic and foreign public bribery, domestic private bribery, or false accounting.
Does the law place any restrictions on hospitality, travel and entertainment expenses? Are there specific regulations restricting such expenses for foreign public officials?
Hospitality, travel and entertainment expenses can come within the meaning of 'benefit' for the purposes of a bribery offence, although Australian law does not specify any specific quantitative restrictions on such expenses. Some domestic government departments or other state authorities have guidelines for their own personnel to comply with relating to the acceptance of hospitality, travel and entertainment.
Are political contributions regulated?
Contributions or gifts to political parties or associated entities are regulated under Part XX of the Commonwealth Electoral Act 1918 (Cth). Generally, while there are no limits on individuals or organisations making such contributions to political parties, any individual contribution should be disclosed if it exceeds an appointed annual threshold, which is indexed to the official inflation measure for that year. Effective 1 July 2017 - 30 June 2018, the threshold is AUD13,500; the Australian Electoral Commission has confirmed that this will increase to AUD13,800 effective 1 July 2018 - 30 June 2019.
Separate provisions apply for individual states and territories. These are often far more proscriptive. For example, in New South Wales, any individual contribution valued at or exceeding AUD1,000 must be disclosed, and (cumulative) annual contributions above certain limits are prohibited (for the year 1 July 2017 to 30 June 2018, this annual limit ranged from AUD2,700 to AUD6,100, depending on the person, party or group to whom the contribution was made.)
Are facilitation payments regulated? If not, what is the general approach to such payments?
One of the defences to a charge of bribing a foreign public official is that the bribe or corrupting benefit constituted a facilitation payment. To successfully raise the defence, three elements must be established:
- the benefit must be of a minor nature;
- the benefit must have been offered for the sole or dominant purpose of expediting or securing the performance of a routine government action of a minor nature; and
- the provider of the benefit must have made a signed written record of the relevant conduct as soon as practicable. The record must include, among other things, the date on which the conduct occurred, value of the benefit concerned, the identity of the foreign official and/or the person receiving the benefit, and particulars of the routine government action sought.
Under Australian law, lawfully-made facilitation payments may be considered legitimate business expenses for the purposes of reducing a company’s taxable income.
Are there any defences available?
In relation to bribery of foreign public officials, there are two defences available:
- the facilitation payments defence described above in response to question 9; and
- the existence of a written law governing the foreign public official which expressly permits or requires the benefit to be given.
Are compliance programs a mitigating factor to reduce/eliminate liability for bribery offences in your jurisdiction?
As at the date this guide was prepared, compliance programs are not formally a mitigating factor. However, in determining whether a corporation can be criminally liable under federal law it will be relevant whether:
- a corporate culture existed within the corporation that directed, encouraged, tolerated or led to non-compliance with the relevant provision; or
- the corporation failed to create and maintain a corporate culture that required compliance with anti-corruption law.
Given that compliance programs are used by corporations to discourage and prevent bribery and corruption within an organisation, the existence of a robust compliance program would assist to demonstrate that an appropriate culture exists. Even if during a criminal prosecution, a compliance program is found to be inadequate and does not fully exculpate a corporation, it may be a mitigating factor for the purpose of sentencing.
Who may be held liable for bribery? Only individuals, or also corporate entities?
Both individuals and corporates may be held liable.
Has the government published any guidance advising how to comply with anti-corruption and bribery laws in your jurisdiction? If so, what are the elements of an effective corporate compliance program?
The federal government has not published any authoritative guidance on complying with anti-corruption and bribery laws, though both the Australian Trade and Investment Commission and the federal Attorney-General's Department provide some information and general guidance on their respective websites. In December 2017, the AFP and CDPP issued guidelines on 'Self-Reporting of Foreign Bribery and Related Offending by Corporations', which explain the principles and processes that the AFP and CDPP will apply where a company self-reports conduct involving a suspected breach of the foreign bribery offence or related offences. The AFP and CDPP note that the guidelines will be reviewed within two years (or earlier, if a Deferred Prosecution Agreement (DPA) scheme is introduced - see responses to questions 18 and 25 below).
Additionally, and as noted below in the response to question 18, there is currently a bill before Australia's federal parliament which among other things, introduces the offence of corporate criminal liability in relation to foreign bribery. Like its equivalent provision in the Bribery Act 2010 (United Kingdom), an absolute defence to the charge will be made out if the company can establish that it had 'adequate procedures' in place to prevent bribery. The bill also proposes that guidance be published on what amounts to adequate procedures, so companies can take steps to prevent their employees or other associates from bribing foreign officials. The adequate procedures guidance would set out the elements of an effective corporate compliance program.
Does the law provide protection to whistle-blowers?
Different laws apply to whistle-blowers in the public and private sectors.
Public sector protections are consolidated in the Public Interest Disclosure Act 2013 (Cth).
There is currently no unified set of whistleblowing protections applicable in the private sector.
There are various sources of protections with respect to disclosures relating to different subject matters or groups of persons, including, e.g. misconduct involving unions and employer organisations (see Fair Work (Registered Organisations) Act 2009 (Cth)), or institutions supervised by the Australian Prudential Regulation Authority (Banking Act 1959 (Cth), Insurance Act 1973 (Cth), Life Insurance Act 1995 (Cth), and/or Superannuation Industry (Supervision) Act 1993 (Cth)).
For whistleblowing in relation to offences under the Corporations Act 2001 (Cth) (Corporations Act), Part 9.4AAA provides protections to current officers, employees, contractors and contractors' employees if they report in accordance with the Corporations Act, including disclosing their identity. In any case, this protection does not directly apply to current officers, employees, contractors and contractors' employees making disclosures relating to criminal bribery offences, unless they also extend to related Corporations Act breaches relating to account-keeping.
Recently and in partial response to a September 2017 Parliamentary Joint Committee on Corporations and Financial Services' report on recommended changes to whistleblower protections in the corporate, public and not-for-profit sectors, Australia's parliament introduced a bill which seeks to consolidate and expand the existing private sector whistleblowing regime in Australia (see also response to question 18 below). In its current form, the bill provides for a single regime to cover the corporate, financial and credit sectors and introduces a parallel regime for tax whistleblowers. Features of the draft bill applicable to the corporate, financial and credit sectors include the following:
- all public, 'large proprietary' and proprietary companies that are trustees of registrable superannuation will be required to have an internal whistleblower policy;
- all eligible recipients of qualifying disclosures from eligible whistleblowers will, where such confidentiality is sought and unless subject to exceptions outlined in the proposed legislation, be required to protect from disclosure the identity of the discloser and information that is likely to lead to the identification of the discloser; and
- all regulated entities receiving qualifying disclosures from eligible whistleblowers will be required to protect eligible whistleblowers from retaliation. Unlike the existing whistleblower protections under the Corporations Act, there is no requirement for whistleblowers to identify themselves in order to receive such protections.
How common are government authority investigations into allegations of bribery?
While not as common as in many jurisdictions, Australian government authority investigations into allegations of foreign bribery appear to be increasing.
In its December 2017 Phase 4 Report relating to Australia's implementation of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Convention on Combatting Bribery) and related OECD anti-bribery instruments (Phase 4 Report), the authors noted there were 19 ongoing investigations, 13 allegations under evaluation, and 20 that had been finalised after evaluation or investigation and subsequently closed. This was in comparison to seven ongoing investigations at the time of the December 2014 Phase 3 Report relating to Australia's implementation of the OECD Convention (Phase 3 Report).
What are the recent trends in investigations and enforcement in your jurisdiction?
Investigations into, and enforcement of, allegations of foreign bribery appear to be steadily increasing in Australia. The Phase 4 Report (mentioned in our previous response) described Australia's enforcement of its foreign bribery offence as having 'increased markedly' since the Phase 3 Report. Given the increasing cross-jurisdictional cooperation in this area, we expect this trend to continue, particularly if proposed changes to the law are enacted and in force, as some of the changes will enhance the current framework (see response to question 18 below).
Last year, in R v Jousif; R v I Elomar; R v M Elomar  NSWSC 1299, two company directors of an Australian engineering, infrastructure and construction company and a third party facilitator pleaded guilty to conspiring to bribe a foreign (Iraqi) official in breach of federal provisions. The offending conduct included transferring USD1 million for the purpose of bribing the public official. The New South Wales Supreme Court sentenced each director to four years imprisonment and an AUD250,000 fine, while the intermediary received a four year prison sentence. These were the first published prison sentences relating to the federal offence of bribery of a foreign public official.
Investigations into allegations of domestic bribery also appear to be increasing, partly due to active state-based anti-corruption commissions which investigate public sector corruption. On occasions these have a flow-on effect relating to investigations into private sector bribery.
Is there a process of judicial review for challenging government authority action and decisions?
There is a process of judicial review for challenging government authority action and decisions. At the federal level, the processes arise under:
- s 75(v) of the Commonwealth Constitution;
- the Judiciary Act 1903 (Cth); and
- the Administrative Decisions (Judicial Review) Act 1977 (Cth).
However, in general, judicial review is only available in respect of administrative decisions, which arise when a statute confers a degree of discretion to an authority making a decision.
The relevant provisions of the Criminal Code and state and territory-based legislation which establish the criminal offences relating to bribery and corruption do not confer a government authority with any degree of discretion or decision-making, and administrative decisions cannot arise from them.
In Australia, the statutory position (confirmed by case law) is that CDPP's (or equivalent state prosecutors') decision to prosecute or not to prosecute an individual or corporation is not subject to judicial review.
Further, if charges are brought against an individual or corporation, the interpretation of the provisions and whether an individual or corporation has contravened them, would be determined using common law judicial processes.
Are there any planned developments or reforms of bribery and anti-corruption laws in your jurisdiction?
In early December 2017, the Australian government introduced two bills into federal parliament which if passed, will:
- expand and clarify the scope of Australia's foreign bribery offences (including relating to the scope of what constitutes bribery, the intention behind illegitimate payments or offers of payments, and what matters a court should and should not take into account when determining if an offence is made out);
- create the offence of corporate criminal liability in relation to foreign bribery unless the company can establish that it had 'adequate procedures' in place. The bill is framed identically to the UK Bribery Act equivalent, though the Government has not yet released draft or final guidance on what matters will be considered in the 'adequate procedures' defence;
- introduce a proposed DPA scheme which would apply to foreign bribery, bribery of federal public officials and other identified federal crimes; and
- consolidate and expand existing private sector whistleblowing laws and strengthen protections for private sector whistleblowers (as referred to in the response to question 14) at the federal level.
To which international anti-corruption conventions is your country party?
Australia is a party to:
- the OECD Convention;
- the United Nations Convention against Corruption; and
- the United Nations Convention against Transnational Organised Crime.
Do you have a concept of legal privilege in your jurisdiction which applies to lawyer-led investigations? If so, please provide details on the extent of that protection.
There are two types of legal privilege in Australia: litigation privilege and legal advice privilege. Depending on the circumstances, both of these may apply to lawyer-led investigations.
In both instances, parties may have the right to withhold certain confidential communications from disclosure (including from opponents in litigation, regulators and prosecuting authorities) if the communications were created for the dominant purpose of conducting or aiding the conduct of existing, pending or anticipated legal proceedings (litigation privilege), or providing legal advice (legal advice privilege).
There is case law confirming that legal advice privilege can extend to factual investigations carried out by lawyers to enable them to advise a client on the risks it faces and the course of action it should take (AWB Limited v Cole (No 5) (2006) 155 FCR 30).
How much importance does your government place on tackling bribery and corruption? How do you think your jurisdiction’s approach to anti-bribery and corruption compares on an international scale?
Australia's current federal government has taken steps to enhance the legislative framework for investigations and enforcement including by adopting measures recommended in various reports assessing Australia's implementation of the OECD Convention and related OECD anti-bribery instruments.
One step that has been introduced by the government recently is the introduction of a criminal offence for false dealing with accounting documents which intentionally or recklessly facilitates, conceals or disguises the receipt or provision of a bribe. This offence was introduced to address the difficulty in establishing all required elements to prove bribery, which has resulted in relatively few convictions. For the false accounting offence, the prosecution does not need to prove that the defendant or another person actually received or gave a benefit or that any loss was incurred, nor that the defendant intended that a particular person receive or give a benefit, or incur a loss.
In addition, the current federal opposition party's position is that not enough has been done to address bribery and corruption in Australia. Its proposed policy, if elected, is to introduce other measures such as:
- establishing a national integrity commission to look into possible and systemic corruption in the federal government;
- debarment of corrupt companies from bidding for government work; and
- banning the facilitation payment defence.
To date, Australia's enforcement of foreign bribery offences has lagged behind the United States, United Kingdom and, closer to home, China. There have been cases which involve Australian companies and/or individuals where Australian authorities have still been investigating the alleged offences when foreign regulators have commenced and completed enforcement action.
Generally how serious are organisations in your country about preventing bribery and corruption?
There is a wide range of approaches amongst Australian companies to the prevention of bribery and corruption. Many large listed companies, particularly those with overseas operations in high-risk jurisdictions, have sophisticated compliance policies and procedures and a zero tolerance to any corrupt conduct. For other companies, particularly those which only have local operations, bribery and corruption is not a key issue in their compliance agenda, particularly given the relatively low risk of bribery enforcement when compared with other jurisdictions and other enforcement areas, such as competition law. When the Australian government sought consultation in relation to proposed changes to the bribery laws in Australia, the responses from corporates indicated a wide divergence of views.
What are the biggest challenges enforcement agencies/regulators face when investigating and prosecuting cases of bribery and corruption in your jurisdiction?
Presently, one of the biggest challenges in prosecuting companies for foreign bribery offences is the high burden of proof in establishing the requisite fault element. A company can only be found guilty of the offence of bribing a foreign or federal public official if the prosecution can prove that the company expressly, tacitly, or impliedly authorised or permitted an employee, agent or officer's bribery of a foreign official. This authorisation or permission could be established by proving that:
- the company's board of directors intentionally, knowingly or recklessly carried out the relevant conduct, or expressly, tacitly or impliedly authorised or permitted the commission of the offence;
- a high managerial agent of the company intentionally, knowingly or recklessly engaged in the relevant conduct, or expressly, tacitly or impliedly authorised or permitted the commission of the offence;
- a corporate culture existed within the company that directed, encouraged, tolerated or led to the non-compliant conduct; or
- the company failed to create and maintain a corporate culture that required compliance with anti-corruption laws.
From an evidentiary perspective, these are complex matters to prove. In comparison, the new proposed legislation creates the offence of corporate criminal liability in relation to foreign bribery unless the company can establish that it had 'adequate procedures' in place - thereby reversing the onus of proof.
What do you consider will be the most significant corruption-related challenges posed to businesses in your jurisdiction over the next 18 months?
Once enacted, the proposed new laws described in response to question 18 will increase companies' anti-bribery and corruption related compliance requirements and, over time, the prospects of regulatory enforcement. To address these challenges, businesses, in particular those currently implementing a one-size-fits-all or 'off the shelf' anti-bribery and corruption compliance programs, will need to identify and assess their risks to develop tailored 'adequate procedures' to comply with the new legislative framework.
How would you improve the legal framework and process for preventing, investigating and prosecuting cases of bribery and corruption?
The proposed introduction of a DPA scheme (see above in response to question 13) is likely to have the most dramatic impact on investigating cases, prosecuting cases and enforcement results. There have been a number of high profile investigations in Australia where the cases have taken many years to investigate and/or many years to prosecute, and other cases where ultimately no charges have been brought after many years of investigation due to the difficulties of establishing the criminal offence beyond a reasonable doubt. The introduction of DPAs offers an efficient alternative to costly and time-consuming investigations, which may be beneficial to both the prosecutors and companies.