It has been a long time coming, but amendments to strengthen Australia’s Combatting Foreign Bribery Bill were passed in the Senate on 29 February 2024, with the country’s legislation finally catching up with various international counterparts, such as the US Foreign Corrupt Practices Act (FCPA) and UK Bribery Act.
The Bill’s passing indicates increased commitment by Australian authorities to address foreign bribery and coincides with what appears to be a greater focus on combatting corruption in the country, as evidenced by the creation of the National Anti-Corruption Commission in July 2023. Australian companies should act now to review their compliance programmes, specifically looking at how they address the risk of corruption and bribery. However, until Australia can boast a track record of successfully prosecuting multiple foreign bribery cases, scepticism over the extent of its commitment to tackling the issue will remain.
What are the key changes?
The key changes and amendments to the Bill have expanded its scope and applicability, namely:
- Bribery is now a corporate criminal offence with a financial penalty.
- Companies are now liable for “failing to prevent foreign bribery by an ‘associate’”, with associates broadly defined as employees, officers, agents and contractors. Companies with exposure to the UK will be familiar with the concept of “failure to prevent bribery”, which was introduced as part of the UK Bribery Act in 2011.
- These changes underscore the importance of companies having robust internal anti-corruption and anti-bribery (ABC) processes and protocols in place, particularly relating to third parties, which is generally where the highest bribery risk exists.
- Companies that are able to demonstrate that they have “adequate procedures” to prevent bribery can use this as part of a defence against a possible bribery offence. Again, this is a concept that should be familiar to anybody caught by UK law in the past decade or longer.
What does it mean for companies?
Aside from highlighting that combatting corruption is on the political agenda, the changes underscore the importance of having a comprehensive ABC programme that is well communicated and understood throughout an organisation. Key components should include:
- Clear and updated ABC policies that align with the recent legislative changes.
- Communication and training to ensure a widespread awareness of ABC policies among all staff and, where necessary, relevant third parties and “associates”.
- A robust risk assessment process to identify and quantify bribery and corruption risk areas, and then assign proportionate processes according to risk level.
- Effective due diligence procedures – particularly with third parties – that are commensurate with risk level. This should include evaluation of findings, follow-on actions and a regular review timeframe.
- Effective reporting mechanisms and investigation protocols.
- Monitoring and reviewing of the effectiveness of the programme.
- Tone and commitment from the top.
Could there be more to the Bill?
The Bill does not include a deferred prosecution agreement (DPA), which some argue may limit self-reporting. DPAs have been an effective measure in the US and UK in getting increased traction for action by companies when they can see tangible benefits to self-reporting.
What else?
Remember that this Bill is but one of various international laws. Many Australian companies with international exposure will not only have to consider the requirements of this Bill, but also its international counterparts, including emerging legislation on ESG issues like the recently passed EU Corporate Sustainability Due Diligence Directive. The heightened complexity and volatility of the international sanctions environment highlights the need for constant screening and monitoring of third parties, and keeping abreast of geopolitical dynamics that influence sanctions regimes.