Michaelia Cash (WA, Liberal Party, Shadow Minister for Employment and Workplace Relations) 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, albeit begrudgingly, moved to address a serious issue that the coalition has been pursuing for some years. Unfortunately, though, with the bill presented to it, Labor has done too little, too late. What Labor has done is produce an incomplete solution that ignores how the prosecution of foreign bribery is significantly enhanced by allowing deferred prosecution agreements. We, of course, will support the bill because we are committed to opposing foreign bribery, but we will also move amendments to add a deferred prosecution scheme, because doing so makes the enforcement of foreign bribery offences significantly more effective.

Foreign bribery, as we all know, is an incredibly 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 our record. That is why it was the coalition government that 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; and that is why we introduced these measures.

Now, I say 'we introduced' these measures because, although this is a government bill, the Attorney-General has frankly admitted that these measures are almost an exact copy of measures the coalition introduced in 2017 and then reintroduced into the last parliament. Labor has, once again, been copying the coalition's homework. But why not? It's actually very good policy, and I'm personally pleased that the Attorney-General and Labor have finally come to this realisation. 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 the Labor Party did everything they could do to delay action on foreign bribery.

You only need to look at how they approached this issue at the public hearings when these measures were examined by a committee in the last parliament. The very first question from Labor was this: whether the bill should be deferred. The second question expressed surprise and concern that the provisions of the bill, including the schedule that set out the very provisions that 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. And the fourth suggested that 'the whole matter', being legislation to address corporate crime, should be put on hold. So, having made it clear that they did not want to progress the matter, Labor's dissenting report then recommended the removal of key parts of the bill.

And Labor of course wasn't alone. The Greens also made clear that they did not support the legislation proceeding at the time. They also wanted the bill deferred. But it is worth putting on the record Labor's history of opposition, delay and obstruction when it comes to foreign bribery, because it illustrates a recurring problem with this government and with this Attorney-General. The measures in the bill we have before us are lifted almost directly from the coalition playbook from the last parliament. They were a good idea then and yes, they are a good idea now. But in 2020, when given the opportunity to support measures that are clearly in Australia's interests, Labor decided it would prefer to delay—to play politics. Why? Because the policy came from the coalition. Labor could not and would not put Australia's interests ahead of their own tricky political games. And now that the Labor Party and, as I said, the Attorney-General, have finally and begrudgingly come to the party, they have done so too late and, even worse, with a weaker solution than the coalition had put before us. This bill is weaker than the coalition 's proposals and the ones that we had based them on, because, very fundamentally, it does not include deferred prosecution agreements.

Now, it's worth spending a bit of time here exploring what deferred prosecution agreements actually are and why they are so important in foreign bribery prosecutions. A deferred prosecution agreement, also called a DPA, allows a prosecuting body to negotiate conditions with a defendant in exchange for deferral of prosecution. It often involves paying a significant fine and making changes to the way business is done. If the conditions are not met then the prosecution can be re-enlivened. DPAs use corporate offences like foreign bribery and false accounting. These crimes—it's a fact—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, and defendants are often well resourced. This means that, when these crimes are prosecuted, scarce investigatory and prosecutorial resources are tighter in protracted and uncertain litigation.

The risk and expense is what Labor says Australians should have; hence the significant deficiencies in the bill we have before us. Deferred prosecution agreements are an obvious solution. They allow the punitive element of justice to be satisfied. Under a DPA, prosecutors will typically secure significant penalties, sometimes involving fines amounting to billions of dollars. They serve corrective purposes through measures like enhanced compliance programs and ongoing monitoring to ensure the offending cannot happen again, and they can assist in the prevention and deterrence of crime—for example, through measures requiring ongoing cooperation in prosecuting individuals involved. Everything that you'd achieve in a successful criminal prosecution can be achieved through a deferred prosecution agreement.

When it comes to foreign bribery, these are the benefits Labor does not want Australians to have. By cutting DPAs away from this bill, Labor and the Attorney-General are saying, 'Rather than achieving similar results at a fraction of the cost and risk, we want our limited investigative resources tied up, potentially for years.' Labor and the Attorney-General are saying this: 'We do not want Australia to get its share, as multiple jurisdictions did with a DPA that saw Airbus pay around US$3.9 billion in penalties to countries around the world.'

In terms of the international experience of DPAs, it's clear that DPAs are the cornerstone of foreign bribery prosecutions in places like the US and the UK, and it's not hard to see why. They incentivise self-reporting, a good thing, and limit adverse impacts, another good thing. They lead to an increase in prosecutions and increased fines, they allow a result to be achieved to be achieved much more quickly and they are subject to overriding safeguards. Under the coalition's proposal, for example, a former judge would need to certify that every DPA was fair, reasonable, proportionate and in the interests of justice.

This bill is meant to enhance implementation of the OECD anti-bribery convention, but in 2021 the OECD Council itself recommended that parties consider using non-trial solutions like DPAs. In short, the international body responsible for stopping foreign bribery expressly calls for mechanisms like DPA schemes. Then, of course, we have what the stakeholders have said about this bill. It is little wonder that a litany of stakeholders came out in support of DPA schemes. In the inquiry into this bill, Allens Linklaters, the Law Council of Australia, Transparency International Australia and the Uniting Church Synod of Victoria and Tasmania all made submissions in support of a DPA scheme.

Then let's have a look at what the Attorney-General and Labor say. Compare those submissions to the Attorney-General's defence of this bill. In the Attorney-General's second reading speech, he told the parliament this:

… 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.

Clearly, the Attorney-General of Australia thinks, 'Guess what, Australians: you just have to wait a few more years,' because, when you take a closer look, that is what his argument about giving these offences time to work will actually entail.

Needing time to work means you would need to wait until the bill passes. Well, when's that going to happen? Then you have to wait another six months until it commences, and then you need to wait into a person is prosecuted under these new laws. In fact, you'll probably have to wait until a few prosecutions are concluded so that you have a reliable evidence base. The Attorney knows full well that, as we explained when we last introduced these changes, the experience across the OECD was that foreign bribery cases took an average of—lo and behold—7.3 years. So even with the improvements in this bill—which, as I said, is a coalition bill, basically—it still might take years before we can say we've given these improvements, to quote the Attorney-General, 'time to work'. In other words, what does the Attorney-General of Australia want? He wants to wait until the next parliament, or maybe even the one after that, before entertaining what stakeholders are asking for and what the international experience shows, and that is, of course, a DPA scheme. Maybe if we give these amendments, to again quote the Attorney-General of Australia, 'time to work', we might have a DPA scheme by—I don't know—2030. With the very greatest of respect, the Attorney-General's excuses are, quite frankly, flimsy and unpersuasive. And, let's face it, they are certainly not supported by the submissions or the international evidence.

Why won't the Attorney-General improve this bill by introducing a DPA scheme now and supporting the amendment the coalition will be putting forward?

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

He's stubborn.

Michaelia Cash (WA, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

He's stubborn—absolutely. But perhaps, despite the overwhelming evidence to the contrary, he is genuinely persuaded by the silly rhetoric of the Labor senators who spoke about two-tiered justice in the last parliament. That is contradicted, as I said, by the experience internationally. It is contradicted by stakeholders here in Australia.

The truth is—and we all know this; stakeholders know it—that the Attorney-General has been cornered. He has been snookered by his own Labor senators. I would have thought, given the body of evidence and the international experience, that in private the Attorney-General may well recognise the wisdom of a DPA scheme and the experience internationally; if he doesn't, one might say he's burying his head in the sand like an ostrich. But he knows he can't adopt one now without shredding the credibility of those Labor senators who were so keen to rip the guts out of this bill when it was last in the parliament. What is so sad is, as a lawmaker, he is missing an opportunity now to enhance Australia's enforcement of foreign bribery offences around the world. Ultimately, guess who gets to pay the price? That would be the Australian people.

As I said, this is basically the coalition's bill. The coalition will support the measures in this bill even though they are deficient. We are glad Labor has introduced this bill because it is our policy. It was good policy at the time; we liked it then, and we like it now. But, as I said, we'll introduce amendments to reintroduce the DPA scheme that was coupled with these measures last time, and we will include a statutory review to ensure the scheme is working as intended. The Attorney-General can use that time, if he likes, to reverse-engineer his own DPA scheme, one that is just different enough from the coalition's policy for him to save face with his party and with Australian voters—and I certainly hope that he does.

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

So he can claim the credit!

Michaelia Cash (WA, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

Absolutely! We can also use a statutory review as an opportunity to consider whether broader corporate crime measures should also be considered. This could again mean changes like the ones we proposed last time, which would have meant that, when prosecuting a corporate entity, 'dishonesty' means the same thing in both the Criminal Code and the Corporations Act. How refreshing would that be? It could bring in other ways to improve the prosecution of corporate crime.

In the meantime, we invite the government to reconsider its opposition to deferred prosecution agreements. As I said, we will support this bill because, basically, it's ours.

David Shoebridge (NSW, Australian Greens) Share this | Link to this | Hansard source

I indicate that the Greens will be supporting the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023. The core thing this bill does is replace the existing offence of bribery of a foreign public official contained in the Criminal Code Act with a new offence designed to make it actually achievable to get a prosecution to stick. The new offence expands the scope of the existing foreign bribery offence. It does things such as capture candidates for office in the definition of 'foreign public official' and apply the offence where a personal, as opposed to a business, advantage is being sought.

The bill introduces a new corporate offence based upon the UK experience of failure to prevent bribery of a foreign public official. The bill makes some related changes to income tax legislation that, quite reasonably, prohibit a person from claiming a tax deduction for the money they spent on bribing a foreign official. The thought that corporations in Australia are currently able to do that is remarkable, but this bill is closing that loophole.

The bill is incredibly similar to two bills that were introduced by the coalition. I think the first one was in 2017 and the second one was in 2019. The difference is that this bill doesn't contain the deferred commencement provisions that were included in each of those bills. Whilst I acknowledge the shadow AG's contribution that points out just how similar the bills are, I will say this about the current Attorney-General: not only has Labor introduced the bill; they're actually now moving on it, and we're, hopefully, going to vote it up, and it will become law. I think that's an important distinction. Yes, the coalition introduced two bills, but it never found the energy or enthusiasm to bring it to a vote and have them become law. Why that happened hasn't been explained. So I will give the Attorney this credit. Yes, it's very similar—in large part a cut and paste of the coalition bills of 2017 and 2019—but we're actually debating it and might make it law, so tick.

Of course, the bill went off to the Senate Legal and Constitutional Affairs Legislation Committee, and I want to acknowledge the chair and members of that committee. I particularly want to acknowledge the forensic work of Senator Scarr. I think the additional comments that Senator Scarr put into the report made the best case possible for a deferred prosecutions regime, but, for reasons I will explain very briefly, we won't support those amendments in their current form, although we do support a broad-ranging review of the act. I would hope one of the key things that broad-ranging review does is look at the absence of deferred prosecution provisions, look at the international experience and work out whether or not we should promptly put that into law.

The history of foreign bribery in Australia is probably quite long; the history of foreign bribery law in Australia is actually quite brief. In fact, internationally, the world has largely been chasing some reforms that were put in by the Carter administration in the United States, which was the first jurisdiction on the planet to pass legislation to make it a crime to bribe a foreign official. At the time, it was resisted by corporate America. It was considered to place corporate America at an international disadvantage. If their opponents could bribe foreign officials, they should be able to bribe foreign officials too! At different times we've heard that same argument applied in relation to Australian business. 'It's not fair,' says extraction company A, 'that our competitors can go to this country, corrupt their legal system and bribe their officials, and we can can't. We're at a competitive disadvantage.' There are many things that we disagree on in this chamber, but I'm glad to see that all significant parties in the chamber recognise that argument as rubbish. If it had any resonance in the 20th century, I'm glad it has no resonance now. We have a collective global obligation to uphold the rule of law and to do everything we can not to see our corporate interests corrupting and tearing down the rule of law, democratic institutions and good governance in other countries. I'm glad to say that's a common understanding between the Labor Party, the Greens and the coalition in this regard.

In fact, it wasn't until the mid-1990s that we saw other jurisdictions moving to criminalise the corruption of foreign officials. That came about after some really important global work done at the UN level, where we had the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. It was initially in the OECD but then picked up broadly as an antibribery convention. It was signed in 1997 and, a year and a half or so later, ratified by Australia, and then legislation followed.

What has become clear in the two-and-a-bit decades since is that there are significant gaps and loopholes in the legislation that was passed in the late 1990s. One of those loopholes is being closed in this bill. It might be useful to read from the explanatory memorandum in that regard. It explains just one of the difficulties in prosecuting foreign bribery under existing law:

Challenges relating to the existing foreign bribery offence include the need to show that both the bribe and the business or personal advantage sought were not legitimately due. In some cases, the threshold of 'not 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 legitimately due. Further, proving the existing offence can also require reliance on international legal assistance processes. Reliance on such processes may be required, for example, to prove that a benefit or advantage was not legitimately due or that a foreign official was working within their official duties. International legal assistance processes may take time and/or prove unsuccessful, and the investigation/prosecution may be compromised as a result.

I think we can all acknowledge, for example, if there was evidence of an Australian corporation bribing an official in Russia, China or Iran, that there would be very real barriers to having that kind of international cooperation we'd need in order to prove the offence. That doesn't mean we shouldn't be seeking to prosecute offences in those circumstances.

One of the other key changes that is happening in the bill is the proposed new offence of failing to prevent foreign bribery. The law in relation to failure to prevent bribery has really developed in the United Kingdom. Section 7 of the UK Bribery Act 2010 is probably the global standard in this regard. It requires corporations to put measures in their contracting arrangements, employee controls and cost controls that actively prevent the use of funds for the purpose of bribing a foreign official. The extended definition of 'foreign officials' includes candidates for office and the like. The UK Serious Fraud Office has some data about how section 7 has operated in practice and, if you look at the data, it's been reasonably effective. The evidence that we got in the inquiry was that it's led to a change in business practice in the UK. It's led to better practice and stronger controls, moving towards—I don't think it's yet achieved—an anticorruption culture in the UK corporate sector. Obviously we should be picking that up and implementing it in Australia, and this bill—I'm glad to say—does that. That is a good thing.

I'll say this as well, though. Perhaps there's urgent work we should be looking at for some furthering of our anticorruption measures in the corporate space. In 2017, the UK also brought in legislation to make it a corporate offence to prevent the facilitation of tax evasion. That offence was modelled on section 7 of the UK Bribery Act 2010, and I look forward to the coalition bringing forward amendments when we come back to review this in two years also criminalising any corporate efforts to facilitate tax evasion. Clearly that would be a useful further development of law in this area.

There is strong support for this bill amongst a variety of stakeholders. Yes, there are lawyers, like Allens and Linklaters, there is the Law Council of Australia and there's Ashurst Australia. Many of them also support a deferred prosecution scheme. There's also support from the likes of the Uniting Church in Australia. The Synod of Victoria and Tasmania strongly supports these changes, as do Transparency International. So the Greens will be supporting the bill. We won't be supporting the coalition's amendments at this stage in relation to a deferred prosecution scheme. The legislation is incredibly detailed drafting. There is quite a broad definition of the types of offences that may be picked up in the deferred prosecution scheme. The scope of those offences is something that the Greens believe requires some very close study and some very close consideration. I think the kind of scaremongering from some elements in this chamber, that any kind of deferred prosecution scheme is a kind of get out of jail free card for corporate Australia is something that we should treat with very real scepticism. Of course, a badly drafted deferred prosecution scheme could be a get out of jail free card for corporate Australia, and that is something we would absolutely want to avoid. I'm not saying that the coalition amendments fall within that category, but they haven't been properly tested at this point to where we would have a level of comfort to pass them and not see within them some potential misuse by corporate Australia, some potential for a lesser standard for corporate Australia in the scheme.

There are many good reasons to have some form of deferred prosecution scheme in a bill like this. In that regard, I'll read for the record the concerns of the Uniting Church in Australia—again, the Synod of Victoria and Tasmania. They said, in submissions to the inquiry:

The current Government's opposition to DPA schemes appears to rest on the mistaken belief that if DPAs are not offered, then all cases will proceed to prosecution. The reality is that in the absence of a DPA, many corporate crimes carried out by middle managers that would otherwise be self-reported to law enforcement agencies by the corporation itself will go undetected. Those responsible will never go to trial. The experience of other jurisdictions is that a DPA scheme increases the detection of corporate crimes and results in more prosecutions of the individuals inside the corporation that engaged in criminal conduct.

I think there is significant strength in that submission. A well designed, tested DPA scheme has the potential to remedy that defect in the current law. I know that the government says: 'Oh well, we're going to make these changes. We're going to make it easier for prosecutions to stick. We're going to make it easier to prove key elements in it. Let's see how those changes happen before we do that.' That could be seen in some quarters as a delaying tactic. That could be seen in some quarters as just wanting to find a basis on which to say no to a DPA scheme. Nevertheless, we would want to ensure that any DPA scheme that came forward had had that kind of vigorous testing. So we acknowledge the place where those amendments are coming from. We're not in a position to support them now, but we will be supporting that review—a prompt, thorough statutory review. A core element of that will be whether or not the amendments achieve the goal and whether or not we should be rapidly moving towards a DPA scheme.

Paul Scarr (Queensland, Liberal Party) Share this | Link to this | Hansard source

I acknowledge the comments Senator Shoebridge made in his thoughtful contribution—and it was thoughtful—in relation to deferred prosecution agreements. I say through you, Chair, that I think there are plenty of tried and tested precedents—and I'll touch on this—around the world which could inform a deferred prosecution agreement regime in Australia.

My deep concern is that this will be the only opportunity we have over, say, the next five years to actually deal with this in legislation. My deep concern is that we're losing an opportunity. This is a missed opportunity. Senator Shoebridge will know—all the senators in this place will know—how difficult it is to find time on the legislative calendar, and this legislation is an example of that. It's been mooted for seven or eight years. It's taken that long to get here. In that time we're going to lose opportunities to participate with like-minded countries all over the world as part of deferred prosecution agreements which are being entered into on an international basis. That's my concern and that is why I am profoundly disappointed, to be frank, that we're missing this opportunity, because I just don't see the logic in it. Senator Shoebridge referred to those who have some sort of misguided in-principle objection to deferred prosecution agreements. I really don't know what the thinking is amongst those on the government side of the chamber as to why they're so resistant to a system that has worked quite effectively over a number of years, and I'll touch upon that.

By way of background, in my previous life I was company secretary and general counsel of a company that had operations in some jurisdictions which were ranked by Transparency International as some of the jurisdictions or countries most prone to corruption. Corruption of this nature is a disease. It is a dry rot that infects civic society wherever it is practised. I cannot emphasise enough the disruption, the undermining of civic society in those countries that have issues with foreign bribery and corruption. It undermines the faith of the population in the institutions and their leadership, and it is a disease, a dry rot in civic society where it's practised. And I think we, as a member of the OECD, have an obligation to do all we can to stamp out the practice. So, it is something that's dear to my heart, and that is why I feel the gravity that we really are losing an opportunity here, and that genuinely grieves me.

I want to refer to three cases, and this is perhaps the best way to draw out how we're losing an opportunity here. The first case was in 2017. It was a deferred prosecution agreement entered into in 2017. That's seven years ago. Indeed, the investigations leading to this deferred prosecution agreement started in 2013. Rolls-Royce entered into a deferred prosecution agreement with the governments of the United States, Brazil and the United Kingdom, with a total value of 671 million pounds. It was in relation to conduct that Rolls-Royce had engaged in with the governments of Indonesia, Thailand, India, China and Malaysia—all countries in the region, and Rolls-Royce carries on business here in our own country. Yet that deferred prosecution agreement in relation to corruption in our own region could be entered into only by the USA, Brazil and the UK. Australia should be on that list. By not having a deferred prosecution agreement regime, we were deprived from participating in the discussions that led to that 671-million-pound fine.

With respect to that case, I want to read an extract from what the judge, one of the highest judges in the UK, said when considering the deferred prosecution agreement. The way the system works in the UK, and I think it works very well—and I'm sure those on this side of the chamber would be happy to enter into discussions about the best system, but gee, we need a system—is that it goes to court and a judge considers the proposed deferred prosecution agreement. I want to quote from the judgement of that judge, Sir Brian Leveson:

… the investigation into the conduct of individuals continues and nothing in this agreement in any way affects the prospects of criminal prosecutions being initiated if the full code test for prosecution is met.

So, this deferred prosecution agreement that was entered into with the corporate Rolls-Royce did not prevent criminal proceedings proceeding against the individual managers who were involved.

He goes on:

So the question becomes whether it is necessary to inflict the undeniably adverse consequences on Rolls-Royce that would flow from prosecution because of the gravity of its offending even though it may now be considered a dramatically changed organisation. In any event, it will have to suffer the undeniably adverse publicity that will flow from the facts of its business practices which will be exposed by the DPA so that the way in which it has done business will be obvious. Any public procurement exercise will be conducted in the light of its history and it will doubtless only win contracts on the merits of its products. That, of course, is as it should be. Neither will the conduct of Rolls-Royce escape sanction: it could only ever be fined and the DPA has to be approached on the basis that it must be broadly comparable to the fine that a court would have imposed on conviction following a guilty plea.

So you can see the thought that the judge put into the case in terms of the competing interests and the balancing of consideration. That is a process which is robust and has integrity and independent oversight, and it led to this result. As a result of those agreements, US$170 million was paid to the US government and the taxpayers of the US, $25 million was paid to the government of Brazil and the balance went to the United Kingdom. Australia should have had the opportunity to be a party to that. Because we don't have the scheme, we were denied that opportunity.

The second case I want to refer to is that of Airbus, which Senator Cash referred to, in 2020. We didn't have a deferred prosecution agreement regime in 2017, when the Rolls-Royce case occurred. Legislative action wasn't taken up to 2020, and then we got the Airbus case. Airbus was sentenced to pay $3.6 billion under a deferred prosecution agreement. Where did that money go? Who was a party to those agreements? The USA, the United Kingdom and France. What was the region in which that corrupt conduct occurred? Again, it was in our region—Taiwan, Indonesia, Malaysia and Sri Lanka. And Airbus does business here. Because we don't have a deferred prosecution agreement regime, again, none of that $3.6 billion was paid to our authorities to enable them to conduct further investigations and pursue further prosecutions. It all went to other countries that have deferred prosecution agreements. We weren't at the table. We were denied the opportunity to be at the table to discuss and to be part of the bargaining of that deferred prosecution agreement.

That was in 2020, and now here we are in 2024, and we still don't have it. We've got an opportunity—a bill before the house where we could introduce a deferred prosecution agreement regime—and it sounds like we're not going to have one. Another four years have passed. When is the next big global case going to occur where again Australia is deprived of the opportunity of being at the table to negotiate with the corporate wrongdoer? When is that opportunity going to arise?

Now I want to give the third example, and perhaps this will underline how silly this all is. This example hasn't been referred to. This is an Australian example, OZ Minerals—or, I should say, one of its predecessors, Oxiana. It has had to meet confiscation orders to the value of at least $9.3 million. This was announced in Australia recently. It had to pay a pecuniary penalty of $3.65 million. This was 30 May 2023. It had to forfeit $5.71 million received by the company and all future right and entitlement to all ongoing payments to the company under a sale agreement with respect to mineral tenements in Cambodia—one of those high-risk countries. This was announced in May 2023. Senator Shoebridge referred to extraction companies, and in effect this was an extraction company that had to pay a pecuniary penalty in relation to its conduct in Cambodia and had to forfeit proceeds in May 2023.

This was entered into without us having a deferred prosecution agreement regime. This was cobbled together under other pieces of legislation which are not in the nature of formal deferred prosecution agreements. With respect to this, there was a reference to the Australian Federal Police and Commonwealth Director of Public Prosecutions Best Practice Guidelines. This agreement was entered into in May 2023 under cobbled-together guidelines—not a legislative scheme that we in the parliament have actually considered and passed but guidelines. Let me read you one of the horrifying things about these AFP and CDPP Best Practice Guidelines. They say:

AFP and the CDPP will review the operation of this Guideline—

it's not legislation or regulation. It hasn't come before this parliament. It says:

AFP and the CDPP will review the operation of this Guideline within two years or earlier in the event that a Deferred Prosecution Agreement Scheme commences.

These guidelines are from 2017, and I haven't seen any update. Fast-forward to 2023. These guidelines are used as the basis for something that sort of looks like a deferred prosecution agreement but has not been done under a deferred prosecution agreement regime. So this is the worst of all worlds. We're losing the opportunity of participating in cross-border resolution of corruption penalties with major multinational companies, because we don't have a deferred prosecution agreement regime. That $3.6 billion fine that Airbus was hit with went to taxpayers in the UK, the US and France, and that was with respect to corruption activity in our own region. So we lost that opportunity. We're using cobbled-together guidelines that were meant to be reviewed within two years of 2017—and I think they're still in place—to come up with something that sort of is trying to do what a deferred prosecution agreement does, without it being on basis of a regime approved by this parliament. That's the worst of all worlds.

I genuinely do not understand the reticence amongst government members. Maybe some of the government members can inform you off the record. I won't refer to it. I do not understand what they discussed in their party room when they came up with this position. It really baffles me. You've got stakeholders like Transparency International, and I want to read what they said. This is a great conclusion, I think. Transparency International is an outstanding organisation. This is what they say:

We note the proposed Bill does not include a Deferred Prosecution Agreement (DPA) scheme. This reduces the incentives for companies to self-report examples of foreign bribery involving their operations and will continue to undermine Australia's foreign bribery laws. DPAs are used in jurisdictions including Canada, France, the UK, the US and Singapore.

…   …   …

Unless the use of settlements for foreign bribery can be seen to be delivering real deterrence and effective sanctions, public confidence across the world in the fight against corruption will be undermined. The experience of the US and UK is that a DPA scheme increases detection and results in more prosecutions of foreign bribery and other criminal offences.

I would have thought that is something we should be trying to achieve in this place.

Karen Grogan (SA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Pocock, you have only a few minutes before we go to a hard marker. You'll be in continuation.

David Pocock (ACT, Independent) Share this | Link to this | Hansard source

I'm going to try and finish this. I rise to speak in support of the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023. As has been said, this is the third attempt to get this legislation through. This bill makes much-needed updates to the Criminal Code Act to make it easier to investigate and prosecute offenders. I welcome the creation of a new corporate offence of failure to prevent bribery of a foreign public official. This change is supported by the OECD, the Law Council and others and is a long-overdue improvement. The prohibition on tax deduction claims for foreign bribery also enjoys widespread community support.

While these are significant improvements to combat foreign bribery, there are further opportunities to strengthen the legislation. We've seen evidence and we've heard much talk about deferred prosecution agreement schemes elsewhere. Clearly, establishing a DPA scheme in Australia is worthy of consideration, and I thank Senator Scarr for his advocacy on this important issue. I found his additional comments to the committee report on the bill helpful and insightful. I'll be moving a second reading amendment that calls for consideration of a DPA scheme in Australia. In my view, the model put forward by the coalition in Senator Cash's amendments is imperfect. Any scheme must prioritise transparency and avoid creating a two-tiered system where corporate criminals are extensively protected in a way that private individuals are not. Clearly more reform is also needed to abolish facilitation payments, which we know can, in many cases, be bribery by a different name. The parliament should give consideration to using procurement as a lever to combat foreign bribery. Companies convicted of foreign bribery should not be winning contracts with the Australian government, and a whole-of-government debarment scheme could prevent that from happening.

Karen Grogan (SA, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Senator Pocock. I'm afraid I'm going to have to stop you there. You will be in continuation.