On a federal level, the Criminal Code set out at Schedule 1 of the Criminal Code Act 1995 (Cth) (the ‘Criminal Code’) contains numerous offences falling within the classification of bribery and corruption. Other offences are contained within state and territory criminal legislation, such as the:

• Crimes Act 1900 (NSW).
• Crimes Act 1958 (VIC).
• Criminal Code Act 1899 (QLD).
• Criminal Code Compilation Act 1913 (WA).

Australia is also party to numerous anti-corruption conventions, including the:

• UN Convention against Corruption 2003.
• OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions 1997.
• UN Convention Against Transnational Organized Crime 2000.

Upon ratification, Australia acceded to implementing domestic measures in accordance with that mandated by the treaties. Therefore, whilst the treaties do not have direct force of law in Australia, their content is in numerous respects incorporated into Australian legislation, for example through the enactment of criminal offences of bribery with respect to national public officials, foreign public officials and officials of public international organizations, as called for under Chapter III of the UN Convention against Corruption.

Public Prosecutors – Commonwealth and State

The Australian public prosecutors are the Commonwealth Director of Public Prosecutions (‘CDPP’). The CDPP is responsible for criminal prosecutions of offences in breach of Commonwealth laws. The CDPP works collaboratively with government agencies who may refer matters to the CDPP for prosecution following investigations. There are also State and Territory Directors of Public Prosecutions (‘DPP’). The State and Territory DPPs pursue prosecutions for offences under State and Territory laws.

Australian Federal Police

The Australian Federal Police (‘AFP’) is responsible for the investigation of offences under the Criminal Code. As part of their investigations, the AFP can undertake duly executed search warrants to obtain evidence in criminal investigations. The AFP also have the power to make arrests where persons are charged with a criminal offence.

State and Territory Police Forces

State and Territory police forces have the authority to investigate and lay charges in respect of bribery occurring within their respective jurisdictions (except foreign bribery and bribery of Commonwealth officials). Their powers are generally the same as the AFP.

The National Anti-Corruption Commission

The Commonwealth now has an independent agency tasked with investigating corrupt conduct in the federal public sector. Founded on 1 July 2023, the National Anti-Corruption Commission or ‘NACC’, functions in a similar manner to Corruption Commissions at a state level. Its objects are to detect and prevent corrupt conduct, educate the Australian community about corruption in the public sector, investigate serious or systematic corruption and to refer persons for criminal prosecutions, civil proceedings or disciplinary action.¹

State and Territory Corruption Commissions

Various State and Territory anti-corruption standing commissions of inquiry exist to investigate corrupt conduct in the public sector, including: NSW Independent Commission Against Corruption, VIC Independent Broad-based Anti-Corruption Commission, QLD Crime and Corruption Commission, and the WA Crime and Corruption Commission. Whilst these Commissions do not have the power to make arrests or bring criminal charges, there is a capacity to make referrals to the prosecutors.

Footnote(s):

¹ National Anti‑Corruption Commission Act 2022 (Cth) s 3.

Pursuant to the bribery offence provisions under the Criminal Code, the giving of a bribe can be broadly defined as providing a “benefit” to another person and the benefit is not legitimately due to the other person and is undertaken with the intention to influence that other person in their official duties in order to obtain business or a business advantage.

A ”benefit” is defined as an advantage that is not limited to property. A “business advantage” an advantage in the conduct of business.

Part 4A of the Crimes Act 1900 (NSW) deals with corruption in the private sector and also criminalises a range of bribery offences, both public and private. Under section 249B, concerning the offence of corrupt commissions or rewards, it is a crime for an agent to receive or solicit, or for a person to give or offer, any benefit in the following circumstances:

• As an inducement or reward for doing something or showing favour to any person in relation to the agent’s affairs or business, or
• Where the receipt of the benefit would “tend to influence” the agent to show favour to any person in relation to the agent’s affairs or business.

The term “agent” includes but is not limited to:

• Any person employed by or acting on behalf of another person,
• Any person serving under the Crown,
• A police officer, or
• A councillor under the Local Government Act 1993 (NSW).

The maximum penalty is seven years imprisonment. Other States and Territories have similar offences.

On a federal level, the Criminal Code creates offences for the offering, giving or receipt of a bribe to or by a Commonwealth public official or foreign public official where the benefit is intended to influence the official in the exercise of his or her duties as an official.

The definitions of “foreign public official” and “Commonwealth public official” found in the Criminal Code are broad. The definitions encompass an employee of a public international organisation or an individual who is a contracted service provider for a Commonwealth contract.

In the federal Criminal Code, both individuals and corporate entities can be held criminally liable for bribery offences.

Bribery is a criminal offence. Private parties cannot directly bring civil suits for cases of bribery.

Foreign Public Officials

The offence of bribing a foreign public official under section 70.2 of the Criminal Code requires that:

• A person provides, offers a benefit to another person, or causes another person to receive a benefit.
• The intention of the first person is to improperly influence a foreign public official in the exercise of their official duties in order in order to obtain or retain business or a business or personal advantage.

Individuals are liable to a maximum penalty of ten years’ imprisonment or 10,000 penalty units (AUD 3.13 million as of 1 July 2023) or both.

Corporations are liable to maximum penalty that is the greatest of 100,000 penalty units (AUD 31.3 million), three times the value of a benefit obtained from the offending conduct, or 10% of the corporation’s annual turnover.

Domestic Public Officials

The offence of bribery of a Commonwealth public official under section 141.1 of the Criminal Code.

The offence of bribery of a Commonwealth public official requires that a person:

• Dishonestly provides a benefit to another person, offers a benefit to another person or causes a benefit to be provided to another person.
• Does so with the intention of influencing the second person in the exercise of their duties as a public official.
• That second person is a Commonwealth public official.

It is also an offence for a Commonwealth public official to ask for or receive a bribe.

Individuals are liable to a maximum penalty of ten years’ imprisonment or 10,000 penalty units (AUD 3.13 million), or both.

Corporations are liable to a maximum penalty that is the greatest of 100,000 penalty units (AUD 31.3 million), three times the value of a benefit obtained from the offending conduct, or 10% of the corporation’s annual turnover.

Currently, there are no mechanisms such as Deferred Prosecution Agreements for bribery and corruption offences in Australia.

The Criminal Code makes no specific reference to hospitality, travel and entertainment expenses in relation to either domestic or foreign bribery. However, these types of expenses could be caught within the concept of a “benefit” under the definition of both offences. Whether such expenses were caught by the offence, would depend on whether the other elements of the offence were also met.

There is no specific monetary limitation on what could be considered a benefit, however the Australian Trade Commission (‘Austrade’), in its Anti-Bribery & Corruption Guide for Australians doing business offshore (‘ABC Corruption Guide’) notes that these types of expenses, particularly when “extravagant”, can be a common red flag. Austrade recommends that small to medium businesses include in their anti-bribery and corruption programs, policies on hospitality, gift giving, sponsored travel and entertainment to help identify and reduce risk.²

Footnote(s):

² Australian Trade Commission, Anti-Bribery & Corruption Guide for Australians doing business offshore, p 15.

At the federal level, contributions to political parties or associated entities are regulated under Part XX of the Commonwealth Electoral Act 1918 (Cth). Political contributions are permitted; however, both the donors and receivers must adhere to the legislated funding and disclosure requirements.

Registered political parties, their state and territory branches, associated entities, third parties, members of the House of Representatives, Senators and donors are required to lodge an annual return with the Australian Electoral Commission (‘AEC’), which is the independent government agency responsible for organising, conducting, and supervising federal Australian elections.³ Donors who meet the threshold must lodge a Donor Election Disclosure Return with the AEC within 15 weeks of the election polling day. The threshold for 1 July 2023 to 30 June 2024 is more than $16,300.⁴

States and Territories also have their own laws regulating donations, which can be more restrictive.  The NSW Electoral Commission, for example, entirely prohibits donations above a specified limit. For the 2023 – 2024 financial year, the yearly limit for a political donations or indirect campaign contributions to “a registered party or group of candidates” is $7,600.⁵

Footnote(s):

³ Australian Electoral Commission, Financial Disclosure, accessed 14 May 2024 https://www.aec.gov.au/Parties_and_Representatives/financial_‌‌‌‌disclosure/.

⁴ Australian Electoral Commission, Disclosure Threshold, accessed 14 May 2024 https://www.aec.gov.au/parties_and_representatives/public_funding/threshold.htm.

⁵ NSW Electoral Commission, Caps on political donations, accessed 14 May 2022 https://elections.nsw.gov.au/funding-and-disclosure/political-donations/caps-on-political-donations.

While, in respect to foreign bribery the Australia Government recommends that, “that individuals and companies make every effort to resist making facilitation payments”, facilitation payments are recognised in Australia as a complete defence to the core foreign bribery offences in the Criminal Code.  However, the facilitation payment defence is very narrow in its operation, under Section 70.4, the “facilitation payment defence” is only applicable where:

• the value of the benefit was of a minor nature;
• the benefit was offered “for the sole or dominant purpose of expediting or securing performance of a routine government action of a minor nature”; and
• as soon as practicable, the person made a record of the payment.

As of November 2022, the Australian Government advised the OECD that “the facilitation payment defence has not been an impediment to Australia’s enforcement of the foreign bribery offence”⁶.

Footnote(s):

⁶ OECD, Phase 4 evaluation of Australia: Additional Written Follow-up Report, 2023, p 9.

Other than the facilitation payment defence, it is also a defence to foreign bribery if, at the time of the offence, there existed a written law governing the foreign public official which expressly permits or requires the benefit to be given. This defence is contained in section 70.3 of the Criminal Code, and subsection 70.3(1) details the differing elements of the defence that govern different types of public officials.

Domestic bribery and corruption offences do not have equivalent defences.

Australian legislation does not presently mandate compliance programs. However, an offence under the Criminal Code can be attributed to a body corporate if the physical element is committed by an employee, agent or officer of a body corporate acting within the actual or apparent scope of his or her employment, or within his or her actual or apparent authority.⁷ The fault element can be attributed, if the body corporate expressly, tacitly or impliedly authorised or permitted the commission of the offence.⁸ This can be established through proof of a corporate culture that tolerated or led to non-compliance with the relevant provision, or the failure to maintain a corporate culture that required compliance with the relevant provision. In these circumstances, the existence and effectiveness of the company’s anti-bribery compliance program can provide a defence to an allegation of foreign bribery.

Footnote(s):

⁷ Criminal Code, s12.2.

⁸ Criminal Code, s12.3.

The National Anti-Corruption Commission has provided guidance on how to comply with anti-corruption and bribery laws. Known as the “Integrity Maturity Framework”, it is a set of eight principles on how to comply with Commonwealth integrity laws, practice and procedures.⁹ Those principles are as follows:

• 1^st principle: Values and codes of conduct.
• 2^nd principle: Integrity knowledge and performance management.
• 3^rd principle: Integrity policies, resources and systems.
• 4^th principle: Integrity risk management.
• 5^th principle: Prevent, detect and manage fraud and corruption.
• 6^th principle: Integrity in public resource management.
• 7^th principle: Protect people, information and assets.
• 8^th principle: Monitor and evaluate organisational integrity.

There are also 4 levels of maturity to assess levels of compliance with each principle. For example, for the first principle, values and codes of conduct,¹⁰ the levels are as follows:

• Level 1: Values have not been established, codes of conduct are not promoted and lacking the ability to investigate code of conduct breaches.
• Level 2: Values are promoted by leaders, employees are aware of codes of conduct and understand it and that procedures and guidance have been implemented for code of conduct breaches
• Level 3: Agency heads, leaders, and employees are all aware of the agency’s values, codes of conduct are consistently promoted and that potential code of conduct breaches are investigated with a quality assurance process that ensures the consistent application of procedures.
• Level 4: Values are promoted within the agency and to all external stakeholders, codes of conduct is promoted and applied consistently across employees, labour hire, contractors and suppliers. The Code of Conduct is promoted and applied consistently across employees, labour hire, contractors and suppliers. Further, investigations code of conduct breaches also refine integrity policies and procedures as part of continuous improvement and self-review.

These levels improve the abilities of an agency to self-assess its compliance status with anti-corruption laws. They also provide a clear roadmap for an agency on where they need to improve.

Footnote(s):

⁹ National Anti-Corruption Commission, 8 Integrity Principles and Maturity Indicators: Commonwealth Integrity Maturity Framework, 2023, p 3.

¹⁰ National Anti-Corruption Commission, 8 Integrity Principles and Maturity Indicators: Commonwealth Integrity Maturity Framework, 2023, p 7 – 8.

A comprehensive protection regime exists for the public sector under the Public Interest Disclosure Act 2013 (Cth), which creates a framework to facilitate the reporting of suspected wrongdoing including for bribery and other corruption and to provide protections for persons who make public interest disclosures. In July 2023 the Public Interest Disclosure Amendment (Review) Bill 2022 came into effect, providing increased protections for public sector whistleblowers and witnesses, including by expanding reprisal protections to capture indirect threats.¹¹

With respect to the corporate sector, the whistleblower protection regime under Part 9.4AAA of the Corporations Act 2001 (Cth) was expanded from 1 July 2019 under the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019. The new laws: expand the definition of who is considered a whistleblower; allow anonymous disclosures; permit the right to make a disclosure to a regulator without raising the matter internally; provide greater protection to whistleblowers; and require certain companies (public, large proprietary, registrable superannuation entities) to implement clear and accessible whistleblower policies.

While Australian law provides a range of protections for whistleblowers, including the possibility of criminal penalties for individuals who cause, or threaten to cause, harm to a whistleblower, it does not provide for incentives. In 2017, the Parliamentary Joint Committee on Corporations and Financial Services recommended that, in relation to the Public Interest Disclosure Act 2013 (Cth), incentives be provided to whistleblowers if the disclosure results in a penalty for their employer.¹² However, this suggestion has not been further progressed, nor supported by other bodies, such as the Law Council of Australia.¹³

Footnote(s):

¹¹ Australian Public Service Commissioner, State of the Service Report 2022-23, Protection for whistleblowers in the public sector (November 2023), p 87.

¹² PJCCFS Report, 138-139, recommendations 11.1 and 11.2.

¹³ Law Council of Australia, Public sector whistleblowing reforms: Stage 2, 22 December 2023, p 24.

In NSW, government authority investigations into allegations of bribery and corruption are common.

The Independent Commission Against Corruption (‘ICAC’) was established in 1988 to “protect the public interest, prevent breaches of public trust and guide the conduct of public officials in the NSW public sector”.¹⁴ ICAC regularly investigates such conduct and, not infrequently, the result of their investigation is a recommendation that matters be referred to the DPP for further investigation and prosecution. Once the matter is referred, the DPP must then separately determine whether there is sufficient evidence to lay criminal charges. As evidence obtained through ICAC’s coercive powers cannot be used against a defendant, the ability to bring a criminal prosecution can be limited.

Notably, in 2021, ICAC announced that it was investigating whether the sitting NSW Premier had engaged in conduct that constituted or involved a breach of public trust by exercising public functions in circumstances where she was in a position of conflict between her public duties and her private interest.¹⁵ In June 2023, after a lengthy investigation and several public hearings, ICAC found that the NSW Premier had engaged in serious corrupt conduct.¹⁶

At the same time, ICAC announced that its investigation had been severely hampered by the failure of individuals to report the conduct and advised that it would commence an educative campaign to increase awareness among government agencies of the importance of reporting suspected corrupt conduct.¹⁷

Until recently, at the federal level there was no independent government authority with the mandate of investigating corruption and bribery in the public sector. However, in May 2022 a new Federal government was elected and in November 2022 it passed the National Anti-Corruption Commission Bill 2022 establishing the National Anti-Corruption Commission (NACC). The NACC commenced operations in mid-2023. By May 2024, NACC had received 2888 referrals of suspected corruption at the federal level and is currently conducting 20 corruption investigations.¹⁸

Footnote(s):

¹⁴ Independent Commission Against Corruption, About the ICAC, https://www.icac.nsw.gov.au/about-the-nsw-icac

¹⁵ Independent Commission Against Corruption,  Further Operation Keppel public inquiry, 1 October 2021, https://www.icac.nsw.gov.au/media-centre/media-releases/2021-media-releases/further-operation-keppel-public-inquiry

¹⁶ Independent Commission Against Corruption, ICAC finds former premier and then member for Wagga Wagga corrupt, 29 June 2023 https://www.icac.nsw.gov.au/media-centre/media-releases/2023-media-releases/icac-finds-former-premier-and-then-member-for-wagga-wagga-corrupt

¹⁷ Independent Commission Against Corruption, ICAC finds former premier and then member for Wagga Wagga corrupt, 29 June 2023 https://www.icac.nsw.gov.au/media-centre/media-releases/2023-media-releases/icac-finds-former-premier-and-then-member-for-wagga-wagga-corrupt

¹⁸ NACC, Weekly update: referrals, assessment and investigations, 8 May 2024, https://www.nacc.gov.au/news-and-media/weekly-update-referrals-assessment-and-investigations-1.

Australia has moved towards comprehensive regulation and aggressive criminalisation of corporate conduct which has included a growing expectation of corporate self-regulation and management. This stemmed, in part, from the 2017 Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry which shed light on inadequacies in the management, investigative and reporting practices adopted by some of Australia’s largest corporate entities.

The potential new corporate offence of failure to prevent foreign bribery that passed on 29 February 2024 (Cth) is indicative of this shift and the notable push towards corporate compliance in the realm of bribery from Australian agencies and regulators. Further information on this legislative development is contained in Q 18.

In addition, in 2017, the AFP and the CDPP released joint guidelines clarifying the principles and processes that apply to corporations who self-report conduct involving a suspected breach of Division 70. While there is no obligation to do so, a corporate may report to the AFP suspected bribery by the corporation, its officers, employees or agents. A corporation may self-report conduct by its officers or employees without admitting criminal responsibility on the part of the corporation. There are, as the guidelines suggest, many reasons why a corporate would choose to self-report wrongdoing, including reducing reputational damage and maximising any potential sentencing discount.¹⁹ The corporation is subsequently expected to provide full and frank disclosure and assistance to investigating authorities. Assistance has its clear benefits; the corporation can be given an indemnity from prosecution, and/or an undertaking that evidence given by the corporation as a witness is not admissible, whether directly or derivatively, against the corporation in any civil or criminal proceedings.²⁰

In November 2021 the AFP published additional guidance on self-reporting corporate misconduct²¹ and best practice corporate cooperation. This was used in relation to several investigations, including one matter where a self-reporting company agreed to make the guidance document the benchmark for best practice cooperation under its Investigation Cooperation Agreement.²²

Footnote(s):

¹⁹ AFP and CDPP Best Practice Guidelines: Self-reporting of Foreign Bribery and Related Offending by Corporations, 8 December 2017.

²⁰ Ibid.

²¹ Australia Federal Police, Corporate Cooperation Guidance, November 2021, https://www.afp.gov.au/sites/default/files/PDF/AFPCorporateCooperationGuidance.pdf

²² OECD, Phase 4 evaluation of Australia: Additional Written Follow-up Report, 2023, p 11 -12.

Administrative decisions can be the subject of judicial review under both the common law or through specific legislation such as the Administrative Decisions (Judicial Review) Act 1977 (Cth) and relevant State or Territory judicial review acts.

Judicial review requires that the court review the legality of the decision or action. This will typically involve a consideration as to whether the decision-maker had the power the make the decision, whether they followed proper processes and whether they acted in accordance with the law.

Remedies under the Administrative Decisions (Judicial Review) Act 1977 (Cth) include an order by the court quashing or setting aside the decision, remitting the decision back to the decision maker for further consideration subject to directions from the court, and a declaration as to the rights of the parties in respect of any matter.

The two most significant developments over the past 12 months have been the passing of the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023 (2023 Foreign Bribery Bill) and the commencement of the NACC.

2023 Foreign Bribery Bill

On 29 February 2024, the Federal Parliament passed the 2023 Foreign Bribery Bill.

The passing of this bill brought to an end a six-year attempt by the Federal Government to pass these laws. First in 2017, and then again in 2019, those bills were allowed to lapse. Now, the current Federal Government has successfully passed a leaner, and stricter version of the Bill.

The 2023 Foreign Bribery Bill amends the Criminal Code’s current offence for the bribery of foreign public officials. It brought in three key changes:

1. a new corporate offence of failure to prevent foreign bribery
2. the existing offences capture a greater range of corporate conduct
3. increased penalties for corporations found guilty of an offence.

The new offence of failure to prevent the bribery of a foreign public official carries a maximum penalty of $27.5 million or higher. This offence does two things:

1. it makes companies liable for failing to prevent foreign bribery by an ‘associate’; and
2. it gives companies a defence for failure to prevent foreign bribery by an associate if they can show they had adequate procedures in place to prevent the commission of the offence.

‘Associate’ is broadly defined and includes an employee, contractor, agent, subsidiary or controlled entity of the corporation, or a person that otherwise performs services on behalf of the corporation.

The last category captures individuals and entities that are not directly engaged or paid by a corporation. For example, indirect suppliers such as customs agents who are engaged by a supplier in another market may fall within this definition.

This is also an absolute liability offence, meaning there is no requirement for the prosecution to show that the company was otherwise involved, authorised or permitted the offence.

As a result, unless the company can demonstrate that it has ‘adequate procedures’ in place to prevent bribery, it could be held criminally responsible for the actions of third parties.

Furthermore, unlike the 2017 and 2019 renditions, the new bill does not include provisions relating to DPAs.

Establishment of NACC

On 30 November 2022, Parliament passed legislation establishing the NACC.

This is an independent Commission that detects, investigates and reports on serious or systemic corrupt conduct in the federal public sector. It can also refer matters to the CDPP for criminal prosecution.

Corruption is defined very broadly and includes any of the following by a public official:

1. breach of trust,
2. misuse of information,
3. abuse of office or
4. something that adversely affects a public official’s honest or impartial exercise of powers or duties.

As stated in Q 16, the NACC has already received thousands of referrals since it officially commenced operations on 1 July 2023.

While the focus of the NACC is the public sector, this new Commission will ultimately have an impact on the businesses that work with the Government.

This can include companies working with or for Parliamentarians and their staff, federal agencies’ staff, or contract service providers to the Australian Government. Private entities and its employees can be investigated by NACC for conduct that adversely affected a public official’s honest or impartial exercise of their official duties.

If NACC investigates a private entity, it will have the power to:

1. compel the production of documents;
2. compel officers or employees to attend a hearing to give evidence;
3. search the company’s premises;
4. use covert investigative powers, including intercepting telecommunications; and
5. use surveillance devices and authorise covert law enforcement operations.

In 2023 Australia recommenced reforming its anti-money laundering system – a key mechanism for detecting and subsequently preventing and prosecuting bribery.

Australia’s current Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime was introduced in 2006, and in 2007, Parliament commenced the consultation processes for a second tranche of reforms to properly bring Australia in line with international standards set by the Financial Action Task Force (FATF).

Despite this initial flurry, the second tranche of reforms was never introduced and FATF found in 2015 and again in 2018 that there were key areas that remain unaddressed.

In April 2023, the current Attorney-General announced public consultations on reforming Australia’s AML/CTF regime and bringing it in line with standards recommended by the FATF.

Part 1 of the consultation addressed the need to simplify and streamline AML/CTF obligations, as recommended by a 2016 Statutory Review of the AML/CTF Act 2006. The review found that the regime was too complex, which made it difficult for regulated entities to comply with their obligations.

Part 2 sought feedback on the tranche 2 reforms, which would extend the AML/CTF regime to “high-risk professions” or the “gatekeeper professions”, including lawyers, accountants, trust and company service providers, real estate agents, and dealers in precious metals and stones.

Consultations closed in June 2023, and the feedback is currently being reviewed by the Attorney-General’s Department.

While no concrete reforms have been proposed as of yet, 2024 will likely see the release of draft legislation implementing the extended and amended regime. This means, that not only will currently regulated entities need to adapt to significant reforms, but the number of entities covered by the regime is set to increase from 17,000 to 100,000. It will also impact companies that rely on the services of the gatekeeper professions, and they too will in turn be required to comply with the standards of the AML/CTF regime.

Refer to Q1.

Australia recognises client legal privilege (‘CLP’), or legal professional privilege (‘LPP‘), as at common law. Broadly, it protects legal advice given by a lawyer to their client, and communications between the lawyer and their client relating to contemplated litigation or court proceedings. The privilege belongs to the client, and only they can waive the privilege.

In some state and territory jurisdictions the privilege has been legislated. In NSW, LPP is derived from sections 118 and 119 of the Evidence Act 1995 (NSW). It applies to communications or documents, brought into existence for the “dominant purpose” of either:

• enabling the client to obtain, or the lawyer to give legal advice or provide legal services, or
• for use in existing or anticipated litigation.

In Australia, LPP applies to lawyer-led investigations, provided those investigations are being conducted for the primary purpose of legal advice or for existing or anticipated litigation. LLP can apply documents prepared by, or communications with, in-house legal counsel, however, a higher level of scrutiny is required when applying the dominant purpose test.

As signified by the passing of the 2023 Foreign Bribery Bill and the establishment of the NACC the new federal government is placing high important on tackling bribery and corruption, advising the OECD in November 2022 that it “is strongly committed to combatting corporate crime and bribery of foreign public officials”²³.

The Government’s intent to target corporate misconduct in this area was also clear to see at Attorney-General Mark Dreyfus’s second-reading speech for the 2023 Foreign Bribery Bill, on 22 June 2023. He explained that the bill does not contain a deferred prosecution agreement scheme (DPAs), as:

“When ordinary Australians commit crimes, they feel the full force of the law. However, under the deferred prosecution agreement scheme proposed by the former government, companies that engaged in serious corporate crime, including foreign bribery, would have been able to negotiate a fine, agree to a set of conditions and have their cases put on indefinite hold.”

Australia’s approach to anti–bribery and corruption is of a comparable international standard. Australia is a signatory to the Organisation for Economic Co-operation and Development’s (OECD) Anti-Bribery Convention. The Phase 4 review of Australia’s implementation of the Anti-Bribery Convention was completed in December 2017, and the Phase 4 follow-up in 2019. In the 2021 addendum, the OCED noted that Australia has continued to progress with its recommendations, with only a handful still considered unimplemented. Australia’s implementation has now been further progressed since the implementation of the failure to prevent bribery offence.

Despite this, Australia still has scope to improve its performance in tackling bribery and corruption. While Australian government agencies have the tools required to act, there has been limited results in effectively carrying out prosecutions. As the OECD notes in their most recent report, since the entry into force of Australia’s foreign bribery legislation 20 years ago, only two corporate entities and six individuals have been sanctioned.²⁴ The OECD considers this a low enforcement rate, particularly given the size of Australia’s economy and the high-risk sectors in which Australian companies operate.²⁵

Footnote(s):

²³ OECD, Phase 4 evaluation of Australia: Additional Written Follow-up Report, 2023, p 13.

²⁴ OECD, Implementing the OECD Anti-Bribery Convention Phase 4 Follow-Up Report: Australia, 2021, p 6.

²⁵ Ibid.

The main federal organisations tasked with investigating and prosecuting bribery have been resourced to enable them to effectively respond to this crime typology.

In 2019, the AFP received $25.9 million over four years for its Fraud and Anti-Corruption Centre specifically to investigate foreign bribery. This allowed them to retain, 19 investigators, four forensic accountants and six criminal assets litigators as part of Operation Integra which focuses on preventing, detecting, disrupting and investigating foreign bribery allegations.²⁶ Similarly in November 2018, the federal government committed an additional $41.6 million to the CDPP over eight years to support them in undertaking prosecutions against corporate crime. As of 2021, the CDPP, had advised that it had been able to commit dedicated resources to the prosecution of foreign bribery and related matters.

As of December 2021, the CDPP had thirteen foreign bribery matters at various stages of the proceeding²⁷ and as of November 2022 the AFP had 21 ongoing foreign bribery investigations, including matters currently before the courts. Nine new investigations were opened since December 2021.²⁸

However, as mentioned above, the OCED found overall that Australia has low levels of cases against legal persons despite the funding and resource increases.

Footnote(s):

²⁶ Ibid p 38.

²⁷ Ibid p 15.

²⁸ OECD, Phase 4 evaluation of Australia: Additional Written Follow-up Report, 2023, p 10.

One of the most significant challenges enforcement agencies/regulators face are the long-standing difficulties in attributing criminal wrongdoing to corporate actors.

On 10 April 2019, the Australian government commissioned the Australian Law Reform Commission (‘ALRC’) to undertake a comprehensive review of the corporate criminal responsibility regime. The ALRC published its report, Corporate Criminal Responsibility in April 2020, and the Attorney-General tabled it for Parliament on 31 August 2020.

The report made 20 recommendations following a review of existing federal criminal laws against corporations.

In the ALRC report on Corporate Criminal Responsibility (refer Q18), the ALRC noted that corporations are most often prosecuted for minor regulatory offences, smaller corporations are more likely to be prosecuted than larger corporations, and prosecutors withdraw a significantly higher number of charges against corporations than against individuals for corporate crimes. The report found that the complex mechanisms for attributing criminal responsibility to corporations under federal law pose real difficulties for prosecution.²⁹ While these concerns were not specific to the issue of bribery and corruption, these same complexities limit the Australian enforcement agencies to effectively investigate and prosecute these crimes when corporate actors are involved.

Footnote(s):

²⁹ Australian Law Reform Commission, Corporate Criminal Responsibility (ALRC Report 136), p 7 -9.

There are several challenges businesses face when investigating bribery and corruption issues within their corporate structure. An absence of resources or internal infrastructure will impact a company’s ability to undertake the required due diligence, particularly in respect of monitoring and investigating the conduct of third parties. Ultimately, an absence of appropriate structures will limit an organisation’s ability to detect violations of anti-corruption laws by those third parties, for which the Australian entity may ultimately be held accountable.

In addition, depending on the size of the entity and the issues, the business must have the capacity to properly resource the investigation. External assistance may be required; independent counsel and legal advice can be advisable to ensure the impartiality of the investigation and, depending on the complexity of the money flows, forensic accountants may be beneficial.

Other challenges can include the diverse laws and language of the region in which the conduct took place, and the potential cross-border consequences of the conduct. It is crucial that entities undertaking an investigation understand where liability might arise in other jurisdictions and appropriately manage the risks.

The authorities in Australia have not made any comment about the challenges of electronic data in relation to the investigation or prosecution of bribery and corruption offences.

One of the biggest corruption-related challenges businesses will face in the next 18 months will likely be responding to the changed legislative landscape. The new NACC, while focusing on corruption in the public sector, will also have an impact on the businesses that work with the Government. Such entities will need to ensure that their compliance and best practice documents are up to date and develop policies for responding to a potential NACC inquiry, noting that NACC will be able to investigate both current and past conduct.

Furthermore, the new foreign bribery offences significantly broaden the scope of conduct that could be caught by the Criminal Code– increasing the risk to any company with operations outside of Australia.   The new offence will hold companies directly liable for the foreign bribery activities of any of their employees, including external contractors, agents and subsidiaries. Unless the company can demonstrate that it has ‘adequate procedures’ in place to prevent bribery, it could be held criminally responsible for the actions of third parties.  As a result, businesses will be required to quickly and comprehensively implement procedures dealing with bribery, to reduce their risk of criminal exposure.

The implementation of a Commonwealth Deferred Prosecution Agreement scheme could assist in ensuring that Australia meets international standards and improves its ability to prevent, investigate and prosecute cases of bribery and corruption. DPAs have already been implemented successfully in the United States and the United Kingdom, and given the similarities in our legal systems, will likely enable a more effective resolution of bribery and corruption matters, while encouraging increased self-governance and regulation by corporations.

In addition, the ALRC’s recommendations in their 2020 report regarding the simplification of the laws attributing misconduct to corporate actors should be adopted in full.