In a case that underscores the complexities and risks of foreign business operations and the need for corporate accountability, Oz Minerals Ltd self-reported to the Australian Federal Police (AFP) that employees of Oxiana (Cambodia) Limited, a foreign subsidiary of Oxiana Limited that later became a part of the Oz Minerals group, may have bribed foreign officials to obtain mining rights in Cambodia between November 2006 and October 2009.
While the case led to a rigorous investigation and subsequent legal action, it also highlighted the importance of self-reporting, cooperation, and the application of regulatory guidelines in addressing corporate misconduct.
A cooperative investigation
Following the self-reporting by Oz Minerals Ltd, the AFP initiated a comprehensive criminal investigation, which culminated in September 2021. This investigation was conducted in collaboration with Oz Minerals Ltd, highlighting the company’s proactive commitment to addressing the issue and cooperating with law enforcement.
The CDPP’s decision not to initiate criminal proceedings
The Commonwealth Director of Public Prosecutions (CDPP) made a crucial decision in accordance with the Prosecution Policy of the Commonwealth. The CDPP evaluated all pertinent factors outlined in the Prosecution Policy, many of which were referenced in the AFP and CDPP’s Best Practice Guideline on Self-Reporting of Foreign Bribery and Related Offending by Corporations. Ultimately, the CDPP chose not to initiate criminal proceedings, taking into account the broader public interest.
The settlement and confiscation of assets
The AFP and Oz Minerals Ltd agreed, pursuant to a settlement entered into on 28 April 2023, that benefits which may have been derived from the conduct that led to the acquisition of the mining rights, owned by the controlled subsidiary which has since been sold, should be confiscated.
In the Supreme Court of Victoria on 30 May 2023, the AFP-led Criminal Assets Confiscation Taskforce (CACT) sought, and was granted consent orders, under the Proceeds of Crime Act 2002 (Cth).
The consent orders provide for:
- A payment of a pecuniary penalty of $3.65 million;
- Forfeiture of $5.71 million received by the company pursuant to the sale agreement (an immediate total of $9.36 million); and
- Forfeiture of all future right and entitlement to all ongoing payments to the company pursuant to the sale agreement.
General Counsel Criminal Assets Litigation at the AFP, Andrew Hanger, said “even with a high level of cooperation, companies should not be allowed to retain benefits derived from unlawful activity or which are the proceeds of crime. The AFP led CACT is ensuring that companies relinquish benefits derived from this kind of conduct.”
The impact of proactive cooperation with law enforcement
AFP Commander Economic, Corporate Crime and Corruption Christopher Woods, highlighted the proactive stance of Oz Minerals Ltd. The company’s evolution, including personnel changes and governance system improvements, played a pivotal role in the identification and addressing of potentially unlawful conduct.
“The company’s cooperation went beyond mere acquiescence in the investigation, and it agreed to provide future cooperation if required,’’ Commander Woods said. “The company has taken significant steps to remediate and avoid a recurrence of similar kinds of conduct to the alleged offending. Given the level of cooperation and remediation shown by the company in this case, the AFP supported the company’s submission to the CDPP that it not be prosecuted on public interest grounds”, said Mr Woods.
The Best Practice Guideline
The AFP encourages companies to self-report foreign bribery and related offences. Criminal and/or civil action under the Proceeds of Crime Act 2002 is considered through the AFP and CDPP’s Best Practice Guideline on Self-Reporting of Foreign Bribery and Related Offending by Corporations (Best Practice Guideline).
This is the first concluded matter to have involved application of the Best Practice Guideline. The Best Practice Guideline was introduced in 2017 in response to a recommendation of the OECD Working Group on Bribery which monitors compliance with the OECD Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions.
Key takeaways
The self-reporting by Oz Minerals Ltd of potential foreign bribery by one if its subsidiaries led to a cooperative investigation with the AFP. The CDPP’s decision not to initiate criminal proceedings demonstrates the potential benefits of self-reporting misconduct and the impact of proactive cooperation with law enforcement. The subsequent settlement and asset forfeiture highlight that companies will not be allowed to retain benefits illicitly obtained, even where there has been a high degree of cooperation in a criminal investigation.
