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Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests |
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Purpose
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This bill seeks to amend various Acts in relation to criminal law and law
enforcement to:
• amend the offence of bribery of a foreign public official;
• introduce a new offence of failure of a body corporate to prevent
foreign bribery by association;
• make consequential amendments ensuring the continuation of the
existing policy of prohibiting a person from claiming a deduction
for a loss or
outgoing the person incurs that is a bribe to foreign public official; and
• implement a Commonwealth Deferred Prosecution Agreement
scheme
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Portfolio
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Justice
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Introduced
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Senate on 6 December 2017
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Bill status
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Before the Senate
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2.95 The committee dealt with this bill in Scrutiny Digest No. 1 of 2018. The Attorney-General responded to the committee's comments in a letter dated 6 March 2018. Set out below are extracts from the committee's initial scrutiny of the bill and the minister's response followed by the committee's comments on the response. A copy of the letter is available on the committee's website.[30]
Initial scrutiny – extract
2.96 Item 7 of the bill seeks to insert a new subsection 70.3(2A) into the Criminal Code Act 1995 (Criminal Code). That new subsection would provide an additional offence-specific defence to the existing foreign bribery offence in section 70.2 of the Criminal Code (an offence which the bill also seeks to amend). In this regard, proposed subsection 70.3(2A) provides that a person does not commit an offence against section 70.2 if:
• the person's conduct occurred in relation to a foreign public official;
• the foreign public official is a candidate to be a particular foreign public official (the 'substantive foreign public official'); and
• had the conduct occurred in relation to the substantive foreign public official, a written law in force in the jurisdiction of the substantive foreign public official (established by reference to the table in subsection 70.3(1)) would permit the provision of the relevant benefit to the foreign public official.
2.97 Subsection 13.3(3) of the Criminal Code Act 1995 provides that a defendant who wishes to rely on any exception, exemption, excuse, qualification or justification bears an evidential burden in relation to that matter.
2.98 At common law, it is ordinarily the duty of the prosecution to prove all elements of an offence. This is an important aspect of the right to be presumed innocent until proven guilty. Provisions that reverse the burden of proof and require a defendant to disprove, or raise evidence to disprove, one or more elements of an offence, interfere with this common law right.
2.99 While in this instance the defendant bears an evidential burden (requiring the defendant to raise evidence about the matter), rather than a legal burden (requiring the defendant to positively prove the matter), the committee expects any such reversal of the evidential burden of proof to be justified.
2.100 The committee also notes that the Guide to Framing Commonwealth Offences provides that a matter should only be included in an offence-specific defence (as opposed to being specified as an element of the offence), where:
• it is peculiarly within the knowledge of the defendant; and
• it would be significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter.[32]
2.101 In this case, it is not apparent that the matters in proposed subsection 70.3(2) are peculiarly within the defendant's knowledge, or that it would be significantly more difficult or costly for the prosecution to establish this matter. Further, although the explanatory memorandum addresses the effect of reversing the evidential burden of proof in this case, it does not address the question of why it is appropriate to frame the matter as an offence-specific defence rather than as an element of the offence.
2.102 As the explanatory materials do not address this issue, the committee requests the Attorney General's advice as to why it is proposed to use offence-specific defences (which reverse the evidential burden of proof) in this instance. The committee's consideration of the appropriateness of a provision which reverses the burden of proof is assisted if it explicitly addresses relevant principles as set out in the Guide to Framing Commonwealth Offences.[33]
Attorney-General's response
2.103 The Attorney-General advised:
In response to the Committee's question at paragraph 1.48, section 70.3 of the Criminal Code Act 1995 (Criminal Code) provides a defence to the foreign bribery offence where a written law in force in the place conduct occurs permits the provision of the benefit to the relevant foreign public official. The Bill incrementally expands the definition of foreign public officials to also cover candidates for a foreign public office. The proposed defence in subsection 70.3(2A) is necessary to extend the existing lawful authority defence to also apply to conduct involving candidates for a foreign public office, ensuring consistency across all categories of foreign public official.
This offence-specific defence for foreign bribery is consistent with the broader principle in Australian law of a defence of lawful authority, for which the defendant bears the evidential burden of adducing evidence that suggests a reasonable possibility that the lawful authority exists (sections 10.5 and 13.3 of the Criminal Code).
The defence (and the proposed extension of it to bribery of candidates) is appropriate because:
• The defendant would be in a better position to point to the evidence of the written foreign law he or she relied on when offering or providing the benefit. The defendant could readily and cheaply provide evidence of the existence of the foreign law and their reliance on it to support their case. Corporate defendants in particular are likely to have working relationships in the foreign country and to have undertaken due diligence prior to providing a benefit or making a payment.
• It would be difficult and expensive for the prosecution to prove the non-existence of a law in a foreign jurisdiction. For example, this would require the prosecution to seek evidence of any written law pursuant to a mutual assistance request, which is often time consuming and not always successful.
• The question of whether the benefit was required or permitted under a foreign country's written law is not central to the question of culpability for the offence. The essential elements of the proposed foreign bribery offence are that the defendant provided, offered or caused to be provided or offered, a benefit to another person with the intention of improperly influencing a foreign public official in order to obtain an advantage.
Committee comment
2.104 The committee thanks the minister for this response. The committee notes the Attorney-General's advice that the proposed defence in subsection 70.3(2A) is appropriate because the defendant would be in a 'better position' to point to the evidence of the written foreign law he or she relied on when offering or providing a benefit, and could do so 'readily and cheaply'. The committee also notes the minister's advice that it would be 'difficult and expensive' for the prosecution to prove the non-existence of a law in a foreign jurisdiction. The committee finally notes the minister's advice that the question of whether the benefit was required or permitted under a foreign country's written law is not central to the question of culpability for the offence.
2.105 The committee emphasises that a defendant being in a 'better position' to point to evidence of a matter is not equivalent to the matter being peculiarly within the defendant's knowledge. Nor is a defendant being capable of 'readily and cheaply' providing evidence of a matter equivalent to the matter being significantly more difficult and costly for the prosecution to disprove than for the defendant to establish. The committee therefore considers that the proposed defence in subsection 70.3(2A) does not appear to accord with the principles set out in the Guide to Framing Commonwealth Offences[34] and may therefore not be appropriate for inclusion in an offence specific defence.
2.106 The committee requests that the key information provided by the minister be included in the explanatory memorandum, noting the importance of this document as a point of access to understanding the law and, if needed, as extrinsic material to assist with interpretation (see section 15AB of the Acts Interpretation Act 1901).
2.107 The committee draws its scrutiny concerns to the attention of senators and leaves to the Senate as a whole the appropriateness of placing an evidential burden of proof on a defendant who wishes to raise the proposed new defence to the foreign bribery offence in section 70.2 of the Criminal Code.
2.108 Proposed section 70.5B seeks to require the minister to publish guidance on the steps that a body corporate can take to prevent an associate from bribing a foreign public official. Proposed subsection 70.5B(2) provides that such guidance will not be a legislative instrument. The explanatory memorandum states that '[the publication of guidance] is intended to assist companies in implementing appropriate measures to prevent bribery from occurring within their organisations' but that such guidance 'would not be legislative in character'.[36]
2.109 Proposed section 70.5B follows immediately on from proposed section 70.5A, which provides that a body corporate would commit an offence if an associate[37] of that body corporate commits the offence of bribing a foreign public official,[38] and the associate does so for the profit or gain of the body corporate.
2.110 Proposed subsection 70.5A(5) states that the offence in proposed section 70.5A would not apply if the body corporate had in place adequate procedures designed to prevent the commission of the offence of bribing a foreign public official by any associate, and to prevent any associate engaging in conduct outside Australia that would constitute the same offence if engaged in in Australia. The bill proposes to place a legal burden of proof on the defendant, ensuring that the defendant would need to prove, on the balance of probabilities, that it had in place adequate procedures to prevent an associate from bribing a foreign public official.
2.111 The explanatory memorandum states that what constitutes 'adequate procedures' would be determined by the courts on a case by case basis and that the concept would be 'scalable, depending on the relevant circumstances including the size and nature of the body corporate'.[39] The explanatory memorandum also states, in the context of explaining what constitutes 'adequate procedures', that proposed section 70.5B provides that the minister must publish guidance on the steps that body corporates can take to prevent an associate from bribing foreign public officials.
2.112 It is not clear to the committee what role the guidance the minister must publish under proposed section 70.5B would have in relation to establishing the defence in proposed subsection 70.5A(5). The defence in that proposed subsection requires the courts to consider whether the body corporate had adequate procedures in place to prevent associates from bribing a public official. The guidance relates to steps that the body corporate can take to prevent an associate from bribing public officials. It is not clear whether a body corporate that complies with guidance published by the minister would be determined to have 'adequate procedures' in place and therefore able to establish the defence in subsection 70.5A(5), or if a body corporate could comply with such guidelines but still be found by the courts to not have had adequate procedures in place.
2.113 The committee is concerned that, because the exception to the offence does not clearly articulate what would constitute 'adequate procedures', it has been left to ministerial guidance to clarify the limits of criminal liability with respect to the offence. This concern is compounded by the fact that the guidance will not be a legislative instrument.
2.114 The committee requests the Attorney-General's advice as to:
• whether it is possible that a body corporate that complies with ministerial guidance published pursuant to proposed section 70.5B might nevertheless be convicted of an offence of failing to prevent the bribery of a foreign public official; and
• why the guidance published pursuant to proposed section 70.5B is not considered to be legislative in character and therefore not classified as a legislative instrument and subject to the usual disallowance process.
Attorney-General's response
2.115 The Attorney-General advised:
In response to the Committee's questions at paragraph 1.55, the guidance under proposed section 70.5B will be principles-based, aimed at helping corporations understand the types of steps they can take to prevent bribery of a foreign public official. The guidance will be designed to be of general application to corporations of all sizes and in all sectors. It will comprise suggested anti-bribery policies and procedures that should be read in the light of two overarching guiding principles: proportionality and effectiveness.
It is reasonable to expect companies of all sizes to put in place appropriate and proportionate procedures to prevent bribery from occurring within their business. However, the application of steps to prevent foreign bribery will differ substantially from corporation to corporation - I do not consider it reasonable to expect small and medium-sized enterprises to put in place a compliance program of the same size that would be required of a large multi-national company. Similarly, a corporation with limited exposure to foreign bribery risk should not be expected to take mitigation measures as extensive as another corporation that has a significantly greater risk profile.
It is for this reason that I propose to provide guidance, rather than a legislated, prescriptive checklist of compliance. In this way, it will not be for Government to determine or clarify the limits of criminal liability with respect to the offence. This is appropriately a matter for courts, taking into account the circumstances of each case without the encumbrance of rigid statutory requirements.
Departure from the guidance's suggested procedures will not of itself give rise to a presumption that a corporation does not have adequate procedures in place. Indeed, not all of the policies and procedures suggested in the guidance are necessarily applicable to the circumstances of each corporation. However, companies will need to implement robust and effective steps to prevent foreign bribery to their circumstances. Companies with effective and well integrated compliance regimes would not be convicted of the failure to prevent foreign bribery offence.
The guidance will be broadly consistent with the guidance that the United Kingdom Ministry of Justice has published in relation to section 9 of the Bribery Act 2010 (UK). This is in line with the preference Australian industry has expressed and will enable Australian companies that have already framed their anti-bribery policies on international guidelines to easily incorporate additional policies relevant to the Australian context. I will ensure that the Attorney-General's Department publicly consults on the guidance and I will review and incorporate industry and other feedback.
Committee comment
2.116 The committee thanks the Attorney-General for this response. The committee notes the Attorney's advice that the guidance issued under proposed section 70.5B is intended to be principles-based and aimed at assisting corporations of all sizes and sectors to understand the types of steps they can take to prevent bribery of a foreign public official by including suggested anti-bribery policies and procedures.
2.117 The committee also notes the Attorney's advice that, because the application of steps to prevent foreign bribery will differ substantially between corporations of different types and sizes, it is proposed to provide only guidance, rather than a legislated checklist of compliance, so as to leave to the courts the determination of the limits of criminal liability for the offence, taking into account the circumstances of each case. As such, companies will need to implement 'robust and effective steps' to prevent foreign bribery, but a departure from the minister's guidance will not lead to a presumption that a company does not to have adequate procedures in place.
2.118 The committee requests that the key information provided by the Attorney-General be included in the explanatory memorandum, noting the importance of this document as a point of access to understanding the law and, if needed, as extrinsic material to assist with interpretation (see section 15AB of the Acts Interpretation Act 1901).
2.119 In light of the detailed information provided, the committee makes no further comment on this matter.
[30] See correspondence relating to Scrutiny Digest No. 3 of 2018 available at: www.aph.gov.au/senate_scrutiny_digest
[31] Item 7. The committee draws Senators’ attention to this provision pursuant to Senate Standing Order 24(1)(a)(i).
[32] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, p. 50.
[33] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp 50-52.
[34] Attorney-General's Department, A Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, September 2011, pp 50-52.
[35] Item 8, proposed subsections 70.5A(5) and 70.5B. The committee draws Senators’ attention to these provisions pursuant to principle Senate Standing Order 24(1)(a)(iv).
[36] Explanatory memorandum, p. 19.
[37] This is defined in item 2 of the bill to mean an officer, employee, agent or contractor of the other person, a subsidiary of the other person; controlled by the other person; or otherwise performs services for or on behalf of the other person.
[38] Or engages in conduct outside Australia that, if engaged in in Australia, would constitute the same offence.
[39] Explanatory memorandum, p. 18.
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