Paying the Price: An overview of Australia’s anti-bribery regime and its future

The historic lack of focus in Australia could be because Australia has not had a strong track record of high-profile convictions for contraventions of these laws (in particular foreign bribery and corruption offences) when compared to regulatory actions and penalties in the US in particular, but - as outlined below - this is slowly starting to change, with Australia continuing to invest in this area of law enforcement. 

To assist you in understanding the Australian framework of these laws, we highlight in this brief update the key features of Australia’s laws on bribery and corruption, at a federal and state level, relevant to businesses operating in Australia. 

Commonwealth Anti-Bribery

At the Commonwealth level, bribery is regulated by the Criminal Code Act 1995 (Cth) (Code). It applies to individuals and corporations, and covers offences within Australia as well as extra-territorial offences committed by an Australian resident, citizen, or incorporated entity.^[1] 

To be found guilty of bribing a foreign public official, the relevant party must cause/provide - or promise to cause/provide - a benefit that is ‘not legitimately due’^[2] and that benefit:

1. must be provided/promised with the intention of influencing a foreign public official, resulting in business or a business advantage;^[3] and
2. is not expressly authorised by the laws of the foreign country, ^[4] or is not a valid facilitation payment for minor/routine government action.^[5]

Individuals who are found guilty of bribing a foreign official can be imprisoned for up to 10 years and/or fined up to $2.75 million.^[6] The maximum fine for corporations who are found guilty of bribing a foreign official is far larger, and is linked to company revenue or the value of the benefit - set at a minimum of $27.5 million.^[7] The court does have discretion to lower this amount if the parties are cooperative or plead guilty early.^[8]

To be found guilty of bribing a Commonwealth public official, a similar test applies as to foreign officials. Such offences involve the dishonest provision/promise of a benefit to another person with the intention that the benefit influences the official in the exercise of their duties.^[9] Interestingly, it is irrelevant whether that person knew the party was a Commonwealth public official. The maximum penalties for these offences are the same as for the above.^[10]

State and Territory Anti-Bribery

At the state and territory level, legislation is not uniform. Generally, the criminal law of the relevant jurisdiction prohibits the corrupt giving, offering or receiving of inducements or rewards to or from agents of companies and individuals, or public officials in the private and public sectors.^[11] While all states and territories have some form of a commission against local corruption, there currently exists no such body at the Federal level. This is due to change however - the incoming National Anti-Corruption Commission (NACC) and its proposed powers were discussed in this previous article.

What’s to come?

In February 2022, the OECD Work Group on Bribery released the fourth phase of its report into Australia’s implementation of its anti-bribery commitments.^[12] The OECD felt that Australia had improved its detection of foreign bribery through efforts like whistle-blower protections, and said Australia had taken substantial steps to improve its overall bribery prevention framework by significantly increasing its budget for investigations, including the hiring of specialised, full-time staff into federal law enforcement agencies.

The nation’s first successful prosecution of individuals for foreign bribery came when three men were jailed in September 2017.^[13] The case, tried in the New South Wales Supreme Court, saw the two directors and an employee of an engineering firm plead guilty to bribing Iraqi officials with $980,000USD under the guise of charitable donations in an attempt to win contracts. The three of them were jailed for four years each, with a fine of $250,000 being imposed on each of the directors.

While Australia has taken steps to put its foot down against those who commit bribery offences, it has done so with a willingness to compromise where parties cooperate in the process. In a recent case from last year,^[14] the sanction imposed for bribery was heavily discounted by the sentencing judge for the entity’s early guilty pleas, and for its substantial past and future assistance to law enforcement. The quantum of the discounts offered were, however, criticised (but unchanged) by the Court of Appeal. Leave has since been granted to appeal to the High Court.

This predisposition to compromise may be a result of the fact that prosecuting bribery still poses significant challenges to Australian law enforcement. As an example, despite an AFP inquiry beginning in 2013, anti-bribery charges against Snowy Mountain Engineering Corporation were only laid in October 2021 – an eight year wait. This delay led Transparency International Australia to comment on “how hard it is to detect bribery, and how much more we need to do to support police efforts.”^[15]

In 2022, the long-awaited Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019 (Cth) also lapsed. This bill had the potential to significantly alter the landscape of Australian anti-bribery legislation, as it sought to create a new offence for failing to prevent bribery by associates, as well as establishing a deferred prosecution scheme to incentivise self-reporting and cooperation with law enforcement. It also had the intention of removing the much criticised ‘facilitation payment’ defence – which is already banned in Canada, France, Japan and the UK - where it is seen by the Serious Fraud office as simply being “A type of bribe.”^[16] Many countries, like the US and NZ are also seeking to narrow the defence’s scope.

While there has been no indication that this bill or similar will be revisited by the Australian Government, its decision to establish the NACC may foreshadow a desire to reform foreign bribery laws as part of its legislative agenda against corruption.

Authors: Jonathon Ellis, Richard Lovell, Ben Holmes