Paul Fletcher (Bradfield, Liberal Party, Shadow Minister for Government Services and the Digital Economy) Share this | Link to this | Hansard source

I rise in support of the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023. Through this bill, Labor has finally and begrudgingly moved to address a serious issue that the coalition had been pursuing for years. But the government has done too little too late. It has produced an incomplete solution that ignores the way that the prosecution of foreign bribery can be significantly enhanced by allowing deferred prosecution agreements. We will support this bill because we are committed to opposing foreign bribery. We will move amendments to add a deferred prosecution scheme because doing so makes the enforcement of foreign bribery offences significantly more effective.

Foreign bribery is a serious criminal offence. It is bad for business, it hurts us economically and it damages our international reputation. The coalition has been fighting foreign bribery for decades. That is why the coalition introduced the first foreign bribery offences into the Criminal Code in 1999. That is why, under the leadership of John Howard, Australia ratified the OECD anti-bribery convention. That is why we introduced these measures—I say 'we' introduced these measures because, although this is a government bill, the Attorney-General has frankly admitted that they are almost an exact copy of measures the coalition introduced in 2017 and then reintroduced in the last parliament. Labor has been copying the coalition's homework. And why not? It's good policy.

As we said to the parliament when these changes were first included in the coalition's Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019:

The opaque and sophisticated nature of corporate crime can make it difficult to identify and easy to conceal through complicated structures and transactions. Investigations into corporate misconduct can be hampered by the need to process large amounts of complex data, including evidence that may be held overseas. Court proceedings can be protracted, expensive, and involve well-resourced corporate defendants.

The measures in the Bill seek to address these challenges and remove undue impediments to the successful investigation and prosecution of foreign bribery cases.

We are pleased that Labor has come to the party, but the wisdom of the measures in this bill is not the whole story. These measures should have become law in the last parliament, but the reality is that Labor did everything it could to delay action on foreign bribery.

You need only look at how they approached this issue at the last public hearings when these measures were examined by a committee in the last parliament. The very first question from Labor was whether the bill should be deferred. The second question expressed surprise and concern that the provisions of the bill, including the schedule which set out the very provisions we're looking at now, hadn't been changed following the banking royal commission. The third question asked why the legislation was necessary at all. The fourth suggested that 'the whole matter', being legislation to address corporate crime, should be put on hold. Having made clear that it did not want the matter to progress, Labor's dissenting report then recommended the removal of key parts of the bill. Labor was not alone. The Greens also made it clear that they did not support the legislation proceeding at that time. They also wanted the bill deferred.

It's worth putting on the record Labor's history of opposition, delay and obstruction when it comes to foreign bribery. It's worth doing because it illustrates a recurring problem with this government and with this Attorney-General. The measures in the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023 are lifted almost directly from the coalition's Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019 introduced in the last parliament. They were a good idea then and they're a good idea now. But in 2020, when given the opportunity to support measures that are clearly in Australia's national interest, Labor decided it would prefer to delay because the policy came from the coalition. Labor was not prepared to put Australia's national interest ahead of its own tricky political gains. Now that Labor has finally come to the party, it's done so too late and with a weaker solution.

This bill is weaker than the coalition proposals it is based on. That is because the foreign bribery measures in this bill would work so much more effectively if they were part of a package which included deferred prosecution agreements. The international consensus is that these agreements are an essential tool in the prosecution of foreign bribery. This is what we recognised when in government, when we coupled foreign bribery amendments with a deferred prosecution regime in the bill introduced in the last parliament. Disappointingly, Labor convinced itself that the scheme must be a bad idea because it came from the coalition, so they have cut deferred prosecution agreements from this bill.

It's worth spending a little bit of time explaining what a deferred prosecution agreement is and why it is so important to the prosecution of foreign bribery offences. A deferred prosecution agreement allows a prosecuting body to negotiate conditions with a defendant in exchange for the deferral of the prosecution, potentially indefinitely. These agreements often involve paying a significant fine and making changes to the way business is done. If the conditions are not met, the prosecution can be re-enlivened.

Deferred prosecution agreements are used widely in other jurisdictions for corporate offences, such as foreign bribery and false accounting. These crimes are notoriously difficult to prosecute. They require intensive investigation. They involve paper trails that cross jurisdictional boundaries. The volume of documents and data can be immense. Proceedings can be protracted and expensive. Defendants are often well resourced and, on top of this, there is the inherent difficulty of proving in a court of law that a corporate entity had the requisite state of mind to commit a crime. This means that when prosecuting these crimes, scarce investigative and prosecutorial resources are tied up in protracted and uncertain litigation.

This risk and expense is what Labor is saying Australians will have to accept. Rather than deploying our resources to achieve the greatest possible good for the community, they want the Australian government to commit to a course of action that is expensive and difficult. Deferred prosecution agreements offer an obvious solution. They allow the punitive element of justice to be satisfied.

Under a deferred prosecution agreement, prosecutors will typically secure significant penalties, sometimes involving fines amounting to billions of dollars. They serve corrective purposes. Deferred prosecution agreements can drive changes to corporate behaviour through measures like enhanced compliance programs and ongoing monitoring, with a view to ensuring the offending cannot happen again. And they can assist in the prevention and deterrence of crimes—for example, through measures requiring ongoing cooperation in prosecuting individuals who are responsible. Everything that you'd achieve in a successful criminal prosecution—punishment, prevention and deterrence—can be achieved through a deferred prosecution agreement.

When it comes to foreign bribery, it seems that these are the benefits Labor does not want Australians to have. By deleting the provisions to establish deferred prosecution agreements from this bill, the Labor party is effectively saying, 'Rather than achieving similar results at a fraction of the cost and risk, we want our finite investigative resources tied up for years.' The Australian Labor Party is effectively saying, 'We do not want Australia to share in international schemes such as the deferred prosecution agreement that saw Airbus pay around US$3.9 billion in global penalties for foreign bribery that was shared amongst multiple jurisdictions.'

Deferred prosecution agreements are the cornerstone of foreign bribery prosecutions in countries such as the United States and the United Kingdom, because they offer clear benefits to multiple stakeholders. They incentivise self-reporting. It's not hard to imagine how. You can easily imagine how a corporate head office might become aware of corruption at middle-management level and seek to cooperate with authorities to clean its house. This was the experience in the United Kingdom with the ICBC Standard Bank case. The use of deferred prosecution agreements can also limit collateral impacts where a corporation has engaged in serious and ongoing wrongdoing.

In cases where the corporate conduct is so egregious that the financial sanctions would put the company out of business, innocent people often suffer. Pensioners, employees and others, including manufacturers, customers and suppliers, may all be harmed. The experience in the United Kingdom is that, in these cases, deferred prosecution agreements can strike a balance, securing penalties but limiting the second-order harm inflicted on others. The experience in other jurisdictions in evidence received before this parliament is that deferred prosecution agreements lead to an increase in prosecutions and increased fines. They allow a result to be achieved much more quickly, and they are subject to overriding safeguards. For example, under the coalition's proposal, before a deferred prosecution agreement could be executed, a former judge would need to be satisfied that the terms of the agreement were fair, reasonable, proportionate and in the interest of justice.

The Attorney-General made it clear that this bill is meant to enhance implementation of the OECD Anti-Bribery Convention. But, in 2021, the OECD Council expressly recommended that efforts to stamp out foreign bribery should encompass the use of 'non-trial resolutions' to improve the prosecution rates for foreign bribery. In the words of the OECD Council:

Non-trial resolutions refer to mechanisms developed and used to resolve matters without a full court or administrative proceeding, based on a negotiated agreement with a natural or legal person and a prosecuting or other authority.

In short, the governing body responsible for the convention says that foreign bribery measures should be accompanied by mechanisms like DPA schemes. It is, therefore, not entirely surprising that a wide range of stakeholders have expressed support for the use of deferred prosecution agreement schemes. In the inquiry into this bill, parties as diverse as Allens Linklaters, the well-known law firm; the Law Council of Australia; Transparency International Australia and the Uniting Church Synod of Victoria and Tasmania all made submissions in support of a deferred prosecution agreement scheme. Even Austrade, a government agency, called for measures to encourage self-reporting and cooperation.

Let us compare that to what the Attorney-General and the Labor Party have had to say in defence of this bill. In his second reading speech, the Attorney-General told the parliament:

The purpose of a deferred prosecution scheme is to strike a balance between encouraging companies to self-report serious offending and holding companies to account for serious corporate crime. However, given that there is universal agreement that the existing foreign bribery offences in the Criminal Code are grossly inadequate, it is premature to entertain the introduction of a deferred prosecution scheme.

The introduction of such a scheme should only be entertained after the measures in this bill have been enacted and given time to work.

Maybe the Attorney-General simply feels Australians should wait a few more years. In practice, that is what giving foreign bribery offences 'time to work' actually means, as the Attorney-General would know full well.

When the coalition last introduced these proposed changes in the form of a bill, the relevant coalition parliamentarians explained that the experience across the OECD has been that foreign bribery cases take an average of 7.3 years to be concluded. Even with the improvements in this bill, we can only conclude that the Attorney-General effectively wants to wait until the next parliament or even the one after before 'entertaining' a deferred prosecution agreement scheme. Or perhaps, despite the overwhelming evidence to the contrary, he is genuinely persuaded by the silly rhetoric of Labor senators who spoke about 'two-tiered justice' in the last parliament. Regardless of the Attorney-General's motivations, he is missing a clear opportunity now to enhance Australia's enforcement of foreign bribery offences committed around the world.

I observe, therefore, in conclusion, that the coalition will support the measures in this bill. We are glad that Labor has introduced this bill. It is coalition policy. We support it. But we will also be moving amendments in the Senate. We will seek to improve this bill by adding to it the deferred prosecution agreement scheme that was coupled with these measures the last time a bill substantially, in these terms, was introduced. We will also include a statutory review in our amendments, with a view to being able to, after an appropriate period, consider whether the scheme is working as intended. The statutory review will also provide an opportunity to consider whether there is a case for broader corporate crime measures. These might include the changes we proposed the last time a bill substantially, in these terms, was introduced, with a view to ensuring that, when prosecuting a corporate entity, the term 'dishonesty' means the same thing in both the Criminal Code and the Corporations Act. I conclude by, again, extending on behalf of the coalition an invitation to the government to reconsider its opposition to deferred prosecution agreements.

I commend this bill to the House.

Anne Stanley (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

It's a sad fact of life, but law enforcement often plays catch-up with criminals. Every day it seems there is a new online scam or fraud. Often, but not always, these scams and frauds can be traced overseas. Sadly, too often, the victims are the most vulnerable and, equally sadly, too embarrassed to come forward; hence, the crime goes undetected, not investigated and not punished. Criminals are clever. That's why we need robust laws to combat them.

The Crimes Legislation Amendment (Combatting Foreign Bribery) Bill, while not aimed at online fraud, is equally necessary in addressing another type of international crime—bribery. Global corruption is far reaching and hugely damaging. Bribery, in particular, harms investment and economic growth. It distorts markets, artificially inflates prices and leads to substandard products being procured. Further, it undermines efforts against poverty and disease and facilitates serious transnational crimes. Bribery corrodes good governance and contributes to social and economic inequality in local communities where it occurs.

Thankfully, Australia is a party to a number of international instruments aimed at fighting corruption, including bribery. These include the United Nations Convention Against Corruption, the United Nations Convention Against Transnational Organized Crime, the Organisation for Economic Co-operation and Development—the OECD—and the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. In addition, Australia is also engaged in the following regional and international forums and initiatives: the G20 Anti-Corruption Working Group, the OECD Working Group on Bribery in International Business Transactions, the Anti-Corruption and Transparency Experts' Working Group and the ADB/OECD Anti-Corruption Initiative for Asia-Pacific.

Undetected and unpunished, bribery undermines the reputation of all Australian businesses and negatively impacts business and government relations. The Australian government has a zero tolerance policy in relation to foreign bribery and supports ethical business practices. So, this bill is both welcome and timely. Bribery, by its very nature, is incredibly difficult to investigate and prosecute. It is both opaque and sophisticated. Sadly, there have been relatively few foreign bribery prosecutions in Australia, because the current foreign bribery defence in division 70 of the Commonwealth Criminal Code has been overly prescriptive and difficult to use. This bill seeks to address this issue. It does this by replacing the existing foreign bribery offence with a new carefully developed offence. For example, the prosecution needs to show that both the bribe and the business advantage were not legitimately due. This wording presents difficulties for prosecutors, so it will be replaced with 'improperly influencing a foreign public official'.

The bill also broadens the scope of 'foreign bribery offence' so that it will now capture bribery conducted to obtain personal advantage. This is because experience shows that bribes can include a range of benefits, including personal honours and the processing of visa or immigration requests, or in relation to reducing personal tax liability. Further, this bill seeks to prevent foreign bribery in the first place by implementing a new indictable corporate offence. This is in order to overcome the problem of companies that wilfully choose to turn a blind eye to misconduct by their employees. These provisions will apply to companies where an associate bribes a foreign public official for the profit or gain of the corporation. Importantly, the offence would not apply if the body corporate was able to demonstrate that it had adequate procedures in place to prevent the bribe in the first instance.

In a positive sense, this new provision will provide an incentive to companies to be proactive towards preventing bribery. I know many Australian companies already have rigorous procedures in place to combat bribery, and I commend them on this. To assist those companies that may not have the necessary procedures in place, guidance material on what constitute adequate procedures will be produced.

The measures in this bill may sound very familiar to those opposite. That is because they are virtually identical to the amendments introduced by those opposite in 2017 and then reintroduced in 2019. Both times under the watch of those opposite, those bills were allowed to lapse, failing to even be debated. The previous government had 1,627 days to bring the measures forward for debate and to pass them. They didn't. On these matters of corruption and bribery, there can be no leeway, no slacking off. We must be vigilant. The stakes are too high. Australia's international reputation for world-leading corporate governance, including antibribery provisions, must be protected, and this bill does that. I thank the Attorney-General for bringing the bill to the House. I commend it to the House.

Andrew Wallace (Fisher, Liberal National Party) Share this | Link to this | Hansard source

I'm astounded at that last contribution to the House, by the member for Werriwa. The Labor Party, in true Labor Party style, when they come into government, complain about something we didn't do, when they blocked us continuously when we were in government. The hypocrisy of those on the other side of the House leaves me speechless. But I'll move on, because I do have a lot to say. When we were in government we brought these measures to the parliament because we believe in combating foreign bribery. Why is this important? Well, we live in a very uncertain world right now. In the Australian parliament, when we were in government, we committed to spending $210 billion on critical defence procurement, whether aircraft, vehicles, ships or submarines. There is no doubt that we are living in the most geopolitically unstable period since 1945. The Australian government, along with a lot of other governments around the world, is spending a lot of money on defence, and understandably so.

This bill, the Crimes Legislation Amendment (Combating Foreign Bribery) Bill, is so important, and the best example of why it is so important is a deferred prosecution brought by the US Department of Justice against Airbus, which fined Airbus a record $3.9 billion for actions that Airbus have taken to, effectively, bribe US and foreign officials in order to win and maintain defence contracts. Just remember that—$3.9 billion. It's the largest fine ever, and it was done under a deferred prosecution agreement.

This bill will further the aim we had when we were in government to strengthen the legal framework for prosecuting foreign bribery. I'm not disappointed to see this bill come before the House, but I am disappointed to see the political gamesmanship that is being brought by the other side. I'm not complaining that they're copying our homework—the best form of flattery is imitation—but they have left some very important parts out of this bill. Members opposite need to reconsider the importance of adding a deferred prosecution scheme to make the enforcement of foreign bribery offences more effective. We're committed to moving amendments to that end, and we ask those opposite to wake up to themselves, stop playing petty politics and accept those amendments.

The fight against bribery and corruption is something that the coalition has been dedicated to and focused on for decades. At the last election, members opposite came to government on a platform of integrity and accountability, but, when push comes to shove, they are not prepared to do what is right—they are not prepared to put their money where their mouth is and introduce legislation which provides for integrity, accountability and transparency.

In 1999 we introduced Australia's first foreign bribery offences into the Criminal Code—'we' being the now opposition. In the Howard years we ratified the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. In 2017 we introduced the very measures that we are debating today. Between Labor's petty politics and the 2019 federal election, those measures lapsed, but we believe in the fight against bribery and corruption. That's why we reintroduced those measures in 2019, and we were again confronted by Labor's political games. Time and again, Labor tout themselves as the be-all and end-all for transparency.

This federal Labor government is clearly plotting the same course as the Queensland Labor government, and that is to hide and obfuscate. These measures should already be the law of the land, but Labor did everything it could to delay action on foreign bribery. Their approach to these measures has been nothing short of incompetence and obfuscation. Their performance in the previous parliament shows it plain and simple. The Labor Party wanted to put on hold legislation to address serious white-collar crime, and that was demonstrated in a parliamentary inquiry in the last parliament. Labor's dissenting report to that inquiry recommended the removal of key parts of the bill.

They spent the lifetime of two parliaments trying to derail this legislation. Then, they spent six weeks, in an election campaign, arguing about integrity. Now, in government, they are finally coming to the table. They're finally ready to redress white-collar crime, after nearly 18 months in office. But they come with a weaker solution and an even weaker commitment to good government and real change. The government are nothing more than political phoneys, and Australians see right through their nasty tricks and politics. The issue of foreign bribery—

Peter Khalil (Wills, Australian Labor Party) Share this | Link to this | Hansard source

You're talking about yourself.

Andrew Wallace (Fisher, Liberal National Party) Share this | Link to this | Hansard source

I'll take that interjection from the member for Wills, because they are doing—

An honourable member interjecting—

Not quite yet, although I know that you'd like to be there! But then you wouldn't have to put up with me in the PJCIS.

The issue of foreign bribery is one that goes to the heart of foreign interference and influence in this country. It's not just a matter of corporate crime. It's a matter for politicians and political parties; it's a matter for government, it's a matter for bureaucracy; it's a matter for all Australians, families and their businesses. What makes it a challenge to address is that red tape and complex corporate arrangements make it difficult to get to the bottom of cases and to enforce wrongdoing.

When we tabled the bill last time when in government, we said that the opaque and sophisticated nature of corporate crime can make it difficult to identify and easy to conceal, through complicated structures and transactions. We said investigations into corporate misconduct can be hampered by the need to process large amounts of complex data, including evidence that may be held overseas. Court proceedings can be protracted, expensive and involve well-resourced corporate defendants. We said that the measures in the bill, at the time, seek to address these challenges and remove undue impediments to the successful investigation and prosecution of foreign bribery cases. It is the same now.

The bill before us creates a new offence for corporations that fail to prevent foreign bribery, which carries a maximum penalty of $27.5 million. We absolutely must hold corporations to account when they squander Australians' goodwill, when they accept foreign bribes and abuse the trust of the Australian people by committing such offences. But harsh penalties and strongly worded legislation amounts to nothing if it can't be enforced.

Labor have weakened this bill by preluding deferred prosecution agreements. A deferred prosecution agreement, DPA, allows a prosecuting body to negotiate conditions with a defendant in exchange for deferral of a prosecution, potentially indefinitely. They often involve paying a significant fine and making changes to the way business is done. If the conditions aren't met, the prosecution can be re-enlivened.

International consensus is that these agreements are an essential tool in the prosecution of foreign bribery. We saw that with the US Department of Justice and Airbus that I talked about earlier—a $3.9 billion fine. Yet this government thinks that, despite the United States having DPAs, the Attorney-General knows better. He knows better than a tried, proven and successful mechanism that is working, seeing record penalties holding the corporate world to account in an environment where the world is awash with money being spent, particularly, in the defence sector.

The Law Council of Australia, Transparency International, even Austrade, an Australian government agency, agree that a DPA is necessary. They are an invaluable tool to punish offenders, deter offences and disrupt complex and organised crimes, where this would not necessarily be possible. Not only is enforcement difficult but prosecution is incredibly hard. We're talking about multiple jurisdictions and, sometimes, multiple nations, as we saw with Airbus. We're talking about intensive investigations with deep forensic accounting, extensive paper trails and, oftentimes, the need for specialist cyberinvestigation skills. And we're talking about the Australian government logjammed, tied up and financially invested in protracted and uncertain litigation for years.

A DPA is about more than efficiency; it's about efficacy and ensuring that Australia's justice system is functional. It's about actually holding people to account for their misconduct instead of just throwing their cases in the too-hard basket. It's about countering foreign interference and influence to bolster our sovereignty and national security. Our own head of ASIO, the Director-General of Security, has identified that foreign interference is the greatest threat posed to the security of this nation, yet the government doesn't want to introduce deferred prosecution agreements. It just beggars belief.

What we have proposed is a requirement that, before a DPA could be executed, a former judge would need to be satisfied that the terms of the agreement were fair, reasonable, proportionate and in the interests of justice. The Attorney-General himself made clear that this bill is meant to enhance implementation of the OECD antibribery convention. However, in 2021, the OECD council itself expressly recommended that foreign bribery provisions consider using non-trial resolutions to improve the prosecution of foreign bribery. How much evidence do they want? This is so typical of those opposite. They say it's about accountability, but they fail to make the accountability mechanism functional. They say it's about enhancing compliance with the OECD convention but have opted not to include the one component they indicated would be most helpful.

It's a simple solution to a massive problem, and Labor have refused to support it. Why do government members opposite refuse to support DPAs? It's because it was our suggestion. This lot are so politically driven by ideology that they just will not accept a good idea if it's been put forward by us. Members opposite need to wake up to themselves and look at the good that can be brought to bear against bribery and corruption. Listen to yourselves. Go and replay the tapes of what you talked about at the last election. Listen to what you said about accountability and transparency. It would be really interesting to see if we hear any teals speaking on this bill—the teals who talked in such a high and mighty way about integrity and accountability. Let's see what the teals have to say about holding the government to account on introducing, or agreeing to, the amendments that we're moving in relation to the deferred prosecution mechanism.

This is an opportunity for the government to do the right thing—the sensible thing—and I'm looking forward to listening to the member for Wills, who's going to make a contribution where he'll stand up, put his hand on his heart and say: 'We got it wrong. This is what we'll do. It's a good submission by Mr Wallace. We will accept the recommendation, and we will accept deferred prosecution agreements because that is the sensible way to go.'

Peter Khalil (Wills, Australian Labor Party) Share this | Link to this | Hansard source

I'm going to start in good faith. I assume that the member for Fisher agrees that foreign bribery is serious and it's harmful. I assume that he agrees that it increases the costs for communities and reduces the quality of goods and services. I'm going to assume that he agrees that, when Australians and Australian businesses engage in bribery, our international standing is impaired. I'm going to assume that he understands that it undermines our rule of law—a very important principle for him as a lawyer and for all of us, as Australians. I'm going to assume that he understands that it diminishes the global market for our exports, and I would hope that he would agree and understand that our government has zero tolerance for corruption, whether it be in the public or the private sector and that this government is taking action and cracking down on foreign bribery by Australian companies. We're removing the barriers to investigations and prosecutions.

I say this because there was a fair bit of grandstanding from the previous speaker, the member for Fisher. This bill, he would understand, is long overdue. Despite his empty protestations, the Liberals—his party—had almost a decade to enact such measures within the bill, but they failed to do so. For 10 years they failed!

The measures we're currently debating are almost identical to the amendments first introduced to this parliament by the then former Liberal government in 2017, and which were then reintroduced in 2019. Despite the critical nature of these measures, the former government, of which the member for Fisher was a member, allowed those amendments to lapse and never brought them on for debate. This was despite being given bipartisan support from the Labor Party, which was then in opposition. The Liberal government sat on the bill after first introducing it in December 2017 and then had until 21 May 2022, the date of the last federal election, to do something about it. But they did nothing! Nothing! That word aptly describes in summation the former government's efforts—nothing. It's clear that they made a decision not to put those measures up for debate, otherwise we would have debated them. It's clear that strengthening Australia's foreign bribery offences was not a priority of the former Liberal government.

The fact is that this bill will help this government to crack down on bribes that are built into seemingly legitimate contractual arrangements. What makes this bill particularly critical are recent reports of millions of taxpayer dollars allegedly being paid to foreign officials through suspicious contracts between private companies and subcontractors engaged by the Department of Home Affairs on Nauru and in Papua New Guinea. These are allegations of suspicious contracts during the time when the now Leader of the Opposition was the Minister for Immigration and Border Protection and the Minister for Home Affairs. He was in charge; he knew what was going on, one would assume.

Reports suggest that the Department of Home Affairs may have disregarded what was effectively a bribe disguised as a legitimate contractual arrangement. This happened, as I said, when the now Leader of the Opposition was the Minister for Home Affairs. He had responsibility. Furthermore, when the now Leader of the Opposition was in his role as the Minister for Home Affairs, he knew that his department had a multimillion dollar regional-processing contract with a man who had been charged by the AFP with foreign bribery. Even if the Leader of the Opposition claims that he did not know about the foreign bribery at the time, these contracts became a matter of public record in September 2018. In September 2018, Mr Bhojani, who was associated with Radiance International, was charged by the AFP for foreign bribery. And in August 2020, he was convicted after pleading guilty. The department continued to pay Mr Bhojani millions of taxpayer dollars, and extended contracts with his company during this period.

One of the companies related to suspicious contracts on Nauru was Canstruct International. A contract was awarded to this company to provide welfare and garrison services on Nauru, despite not having any experience of providing welfare or those services to vulnerable people. The contract between the Department of Home Affairs and Canstruct International was extended many times, without a competitive tender. This was a shelf company with no relevant experience getting a $1.8 billion contract without a competitive tender from the former Liberal government. We also know that the Leader of the Opposition knows this company very well. Executives of Canstruct enjoyed exclusive access to the now Leader of the Opposition during this period. These sorts of arrangements are exactly what this government intends to target through amendments to this bill.

I will say that the corporates in this case, in respect of this bill, will be protected where they can show they have followed adequate procedures—that those are in place to prevent foreign bribery by an associate. So we're going to have guidance material for the corporations. I know that the previous speaker was up in arms about the impact and so on on these companies, but there's a fair set of guidance material that will be able to guide corporations. They can follow those guidance materials and make sure that they're above reproach. The UK has utilised a similar offence to prosecute companies in a few cases of foreign bribery. These are reforms that ensure that a company cannot simply ignore bribery conducted by its employees or contractors where it results in benefits for their business.

Companies can currently avoid criminal liability under existing offences in the Criminal Code even if they know or strongly suspect foreign bribery is occurring. These companies have been able to remain wilfully blind to the activities of their associates, including through the use of third-party agents located offshore. These reforms will enable bribery by an associate of a corporation to trigger corporate liability. That's what the member for Fisher was so upset about—not that they just sat on this for five years after they introduced the bill; maybe he was upset about the transparency of this. Maybe all of those in the opposition who had the responsibility to actually do something about this when they were in government and did nothing, maybe that's what they're upset about. Maybe there's a little bit of guilt about the fact that they did nothing about this when they should have. At any rate, this will encourage corporations to put measures in place to ensure bribery can be prevented.

The reforms will create a new offence—that is certainly true—for corporations that fail to prevent foreign bribery. The maximum penalty will be $27.5 million or higher. Companies can also be held directly liable for the foreign bribery activities of their employees, external contractors, agents and subsidiaries unless a business can demonstrate they had adequate procedures in place. That is eminently fair. You are responsible as an entity for the operations that you are conducting as a corporate entity. These reforms are about ensuring accountability, something that was very far away from the minds of the opposition when they were in government with respect to sitting on this bill and doing nothing for so many years.

We know that prosecuting for foreign bribery is currently so challenging. The offence in division 70 of the Commonwealth Criminal Code is thought to be difficult to use and too prescriptive. To date there have been low numbers of prosecutions in Australia. The OECD has also previously warned that Australia's enforcement system is inadequate. It does not sufficiently punish the bribing of foreign officials. The OECD, led by a former Liberal finance minister Mathias Cormann , also raised serious concerns as to whether the enforcement regime provided sufficient deterrence for this type of activity. That is why these reforms will remove barriers to prosecution and help in the effort to deter this type of activity.

As part of this bill, the existing foreign bribery offence will be replaced to ensure it better captures typical cases of foreign bribery identified by law enforcement. Prosecutors currently need to show that both the bribe and the business advantage sought were 'not legitimately due', which is difficult in cases where bribes are disguised as legitimate payments. This bill replaces the need for this and instead requires prosecutors to demonstrate the improper influencing of a foreign public official. It also broadens the scope of the foreign bribery offence to include bribery conducted that involves a personal advantage, not just a business advantage. It modifies the definition of 'foreign public official' to include candidates for public office. The bill also introduces a new corporate offence of failure to prevent foreign bribery. This relates to cases where an associate of a body corporate has committed bribery for the benefit of the body corporate.

We heard a lot of grandstanding from the previous speaker, the member for Fisher, railing against the very bill that was introduced by his government when he was part of that government back in 2017, and then reintroduced again in 2019—the very same bill and the very similar measures which they sat on, did nothing about and did not bring on for debate in this parliament. Well, we're not doing that. We're a government that takes action. We see the problem and, despite the do-nothing attitude of the previous mob, we are going forward and ensuring that this bill passes through this parliament, because it will fundamentally change the way corporations are prosecuted for bribery. Companies will no longer avoid criminal liability if they know or strongly suspect foreign bribery is taking place. They will no longer be able to turn a blind eye to activities of their associates or through the use of third-party agents. The only defence they will have is the existence of adequate procedures that have to be put in place, based on the guidance material, to prevent bribery from occurring in the first place.

The Albanese government is taking action on foreign bribery by Australian companies after 10 years of nothing happening. This is about accountability and the value of accountability, which we hold high. This is about having no tolerance for corruption. That is why we are pushing ahead with this bill, despite the empty protestations of the previous speaker, the member for Fisher, and the do-nothing attitude that was emblematic of the opposition when they were in government. It's time for us to take action. It's time for us to pass this bill through the House.

Keith Wolahan (Menzies, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill. We will support this bill, but there are flaws in the bill, and that is what I would like to speak on.

Foreign bribery is a serious offence. It is insidious and it undermines our reputation as a nation that values democracy, the rule of law and freedom, and it undermines those concepts internationally, as well. Right now, democracy in many parts of the world is fighting for its existence. Wherever we can as a nation, including our corporate entities, we must not be strengthening the arm of those who seek to undermine democracy, which is what foreign bribery does. We must always hold ourselves to a higher standard. As someone who served overseas, I was proud that we held ourselves to a higher standard, as we should have, and we hold ourselves to account for that. The same should apply in how our corporate entities conduct themselves. So the coalition support this bill but are committed to moving amendments to add a deferred prosecution scheme. That is the area of difference and debate that we have seen from the other speakers.

What did the Attorney-General and the Labor government say about this specific issue? I enjoy reading second reading speeches by the Attorney-General. They are usually well crafted and ones we should listen to. So let's look at what the Attorney-General said on this bill. He said:

The purpose of a deferred prosecution scheme is to strike a balance between encouraging companies to self-report serious offending and holding companies to account for serious corporate crime. However, given that there is universal agreement that the existing foreign bribery offences in the Criminal Code are grossly inadequate, it is premature to entertain the introduction of a deferred prosecution scheme.

He added this:

The introduction of such a scheme should only be entertained after the measures in this bill have been enacted and given time to work.

In that part of the speech the Attorney-General acknowledged that there are benefits in a deferred prosecution scheme but he would prefer to kick the can down the road and not actually deal with it as it is before the House now. The Attorney-General knows full well that when this side was last in government and introduced those changes, the explanation was given that, across the OECD, foreign bribery cases took an average of 7.3 years to be concluded.

After my experiences in uniform and overseas, I had an experience in courtrooms. Those who have been involved in litigation, whether as solicitors or barristers or in any other capacity, will know it is resource intensive and time intensive and has enormous delays. When you add on cross-jurisdictional and international factors, it gets monumental. We have to be careful about how resources are managed, particularly if in a firm the key people, the key witnesses, move on, move overseas. Let's remember that we're probably talking more often than not about large corporations, where some of the staff might not be Australian citizens. To not deal with these in a timely way undermines confidence and doesn't deal with an issue as it comes before us. Again, when we're talking about foreign bribery and the effect that has on reinforcing corruption and undermining democracy, delay is not something we should build into the system.

What is a deferred prosecution agreement, or a DPA, for those who like acronyms? It allows a prosecuting body to have another tool in their kitbag. It allows them to negotiate conditions with a defendant in exchange for a deferral of a prosecution, potentially indefinitely. They often involve paying a significant fine and making changes to the way business is done in the here and now. If those opportunities are lost in a potential prosecution and trial that will take years then other damage can be done if there is a problem with the culture of a particular company or particular individuals. It isn't a set-and-forget scheme—sign here and all is forgiven—it's not a confessional. It is something that hangs like an anvil over the individual's and the corporation's head. The prosecution could be enlivened at any time.

A normal prosecution requires intensive investigation—again, from limited resources. They involve paper trails across jurisdictional boundaries. If we can find a way to deal with the issue in the immediate and short term then we should grasp it. It's important, because when we think of prosecutions there are goals that have to be met not just for the individuals and the corporations that are in the eyes of the investigators and the prosecutors but also because of the message it sends to others who may consider doing the same. There is a punitive element, there is a corrective element and there is a deterrent element. We often speak of specific and general deterrence—and both matter—and all of them can be achieved through a DPA or deferred prosecution agreement. Everything that you'd achieve in a successful criminal prosecution—punishment, prevention and deterrence—can be achieved with a method that is more timely and more sensitive to our limited resources.

By cutting these agreements away from this bill, Labor is saying that, rather than achieving similar results at a fraction of the cost, risk and time, we would prefer that these resources are tied up, potentially for years. The example has been given by other speakers of the Airbus, where a deferred prosecution agreement saw the payment of US$3.9 billion in global penalties for foreign bribery, shared amongst multiple jurisdictions. That is a significant fine for any corporate entity, and achieves all of those purposes. That lesson was learnt not only by Airbus but also any other corporate entity that engages in that field or others. So why wouldn't we embrace that with both hands and deal with it right now?

Deferred prosecution agreements are the cornerstone of foreign bribery prosecutions. We're not alone. We're not reinventing the wheel here, which when we do as a nation sometimes doesn't end well. We're learning from the examples and mistakes of others, including our partners and allies the United States and the United Kingdom. What they have found—and we get to look at the experience there—is that there is a very important incentive in deferred prosecution agreements. They incentivise self-reporting, and it's not hard to imagine how. You can imagine how a corporate head office might become aware of corruption at middle-management level and seek to cooperate with authorities to clean house. That was the experience in the UK and the example of the ICBC standard bank case. These agreements allow for companies to improve their businesses, deal with bad actors whether they're internal employees or contractors, and have certainty rather than having to face courts year on year. I've been in cases before state and federal courts that have involved corporate entities where almost none of the key witnesses work there any more. They've all moved on and it makes it so much harder—and that's just in civil cases. It gets even harder in criminal cases, with all of the additional evidentiary standards that come with that. The experience from other jurisdictions is one we should take seriously and we should learn from, and the experience is clear: the evidence before this parliament is that these agreements lead to an increase in prosecution and an increase in fines. That's what Australians want in this area, and that's what an amendment like that would achieve.

They're also subject to overriding safeguards. There maybe a concern by some that if we are taking decision-making away from judges and juries and the courts, what's happening behind closed doors doesn't have sunlight providing that disinfectant. There is sunlight providing that disinfectant, and there are safeguards. Our proposal included a requirement that, before an agreement could be executed, a former judge would need to be satisfied that the terms of the agreement were fair, reasonable, proportionate and in the interests of justice.

The Attorney-General made clear that this bill is meant to enhance the implementation of the OECD anti-bribery convention, and it's noteworthy that he referenced that. However, in 2021, the OECD Council itself expressly recommended that member countries consider using non-trial resolutions to improve the prosecution of foreign bribery. These were the words of the OECD in offering that as a mechanism:

Non-trial resolutions refer to mechanisms developed and used to resolve matters without a full court or administrative proceeding, based on a negotiated agreement with a natural or legal person and a prosecuting or other authority.

In other words, the governing body responsible for the convention, the OECD, says foreign bribery measures should be accompanied by mechanisms like DPA schemes. Don't just take our word for it. In other debates, whether it's the drafting of the Voice or other issues, we like to say: 'What does corporate Australia say? What does the Law Council say? What does Transparency International Australia say?' Very rarely do they tweet or provide posts that are in line with this side of the House, but they are here. Each of them made submissions in support of the introduction of a deferred prosecution agreement scheme. Even Austrade, a government agency, called for measures to encourage self-reporting and cooperation.

I conclude with this: we take foreign bribery seriously. It goes to the heart of who we are and what we stand for, and it goes to the heart of the struggle between democracies and autocracies. Democracies need all the help they can get right now. Foreign bribery undermines democracy, and we should stamp it out wherever we can. We should do it in the short and medium term, not kick the can down the road, as has been proposed in this bill.

Michelle Ananda-Rajah (Higgins, Australian Labor Party) Share this | Link to this | Hansard source

Foreign bribery is a threat to Australia's democracy and to our values. Recent revelations that the Department of Home Affairs entered multimillion-dollar contracts with a man suspected, and since convicted, of bribing public officials in Nauru has illuminated major gaps in Australia's foreign bribery laws. How Radiance International—an Australian based company under investigation by the AFP for paying more than $100,000 in bribes to two officials in Nauru—was given $9.3 million in government contracts remains unclear. While the Minister for Home Affairs has wasted no time in launching an independent inquiry into the management of regional processing procurements, it once again begs the question as to how we got here in the first place. Questions must be raised as to whether our own systems are fit for purpose—the evidence would suggest not—and whether the super-portfolio experiment of home affairs is actually in the national interest, including whether the right checks and balances are in place or are indeed functional.

Staff turnover in the Public Service is another issue that feeds into the weakening of the system because, without institutional memory, we cannot build up a firewall against threats within or without. The insidious threat of bribery to our democracy remains ever present, and it demands our vigilance. By January of last year, Australia had dropped 12 points in Transparency International's Corruption Perceptions Index since 2012, placing us 18th in the world. The Albanese government's introduction of the National Anti-Corruption Commission will help harden the system against the influence of foreign interference, but more needs to be done. The work is ongoing in response to evolving threats.

Foreign bribery erodes trust in public officials and, by extension, public institutions. It undermines good government and compromises the integrity of Australian business in the eyes of the local and international community. It distorts the playing field with respect to trade or commerce, compromising both our integrity and our economic standing. Without adequate channels for successful prosecution, these clandestine practices will continue to go unchecked and unpunished.

In 1999 Australia ratified the OECD's antibribery convention, criminalising foreign bribery under division 70 of the Criminal Code. Over time, this legal framework has proved inadequate in deterring and punishing those who seek to gain leverage over public officials. Despite playing with the idea of strengthening Australia's foreign bribery laws, the former government failed twice to deliver any meaningful reform within the space of five years. They essentially kicked the can down the road.

If we are to effectively criminalise and prosecute foreign bribery, we need a framework that is simple to enforce and adaptable to the evolving nature of foreign bribery offending. We need a framework that protects natural justice and due process without being overly bureaucratic or prescriptive. We can't afford a system in which holding criminals to account is more effort than it's worth. The proof is in the prosecutions. Since Australia's first foreign bribery laws were enacted more than two decades ago, Australia has successfully prosecuted only three cases of foreign bribery involving corporations and seven involving individuals. That is an unacceptably low track record. The current framework is overly prescriptive. The threshold is set too high, with a need to show that both the bribe and the business or personal advantage that were sought were not legitimately due. 'Legitimately due' can present challenges. For example, bribe payments can be concealed as agent fees, making it difficult to show beyond a reasonable doubt that the payments were not legitimate.

The bill before the House today, the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023, seeks to streamline the investigation and prosecution of foreign bribery offences. The amendment sends a clear message to actors who seek to buy influence overseas. If you attempt to bribe a foreign public official, you will be caught, and you will be prosecuted. Under this bill, the offence of bribery of a foreign official is replaced by a much broader scope of offending, now encompassing the bribery of candidates for public office and bribery with a view to obtaining personal advantage.

The amendment removes the barrier for the prosecution to prove the element of 'not legitimately due' and replaces it with the concept of 'improper influence'. Improper influence may not always be dishonest, an example being the conferring of a scholarship to a child of a foreign official to exert improper influence. The bill makes related changes to income tax legislation to prevent a person from claiming tax deductions relating to foreign bribery. It vests responsibility in corporations to prevent bribery of a foreign public official on their watch. Businesses that turn a blind eye to the misconduct of their agents or employees face penalties of up to $30 million, if not more—a significant incentive for companies to implement and maintain practices that actively combat this practice. It also repeals a number of arduous barriers to prosecution. No longer can bribes be concealed as payments that are legitimately due and thus immune to prosecution. No longer is there any requirement that a bribe have actual influence over the exercise of someone's duties.

Under this bill, the rights and freedoms of suspected offenders are preserved. The measures it takes are reasonable, proportionate and undeniably necessary in delivering on the bill's objectives. Importantly, the bill ensures that the rights enjoyed by the defendant in a criminal trial in Australia are in no way diminished or altered. The bill is a continuation of the Albanese Labor government's commitment to strengthening integrity in public institutions, hardening them to the corrosive effects of corruption.

On 1 July the NACC opened its doors, delivering on our commitment to investigate and report serious and systemic corruption in the Commonwealth public sector. The bill is cast from the same mould, matching our commitment to stamping out foreign bribery with a legal framework capable of delivering exactly that. I commend this bill to the House.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.