Following the Financial Services Royal Commission in 2019, the Australian Law Reform Commission (ALRC) was tasked with inquiring into Australia’s corporate criminal responsibility regime.
In an April 2020 report the ALRC presents the primary data collated in the course of its inquiry, which includes a review of the legislation applicable to corporations, the types of offences and penalties available, and the liability provisions.
Offences applicable to corporations
Table 4 of the report provides a summary of offences under the reviewed legislation. There are a total of 3117 offences under 24 different Acts, including:
|Anti-Money Laundering and Counter-Terrorism Financing Act 2006||45|
|Corporations Act 2001||902|
|Criminal Code Act 1995||593|
|Environment Protection and Biodiversity Conservation Act 1999||146|
|National Consumer Credit Protection Act 2009||216|
|Superannuation Industry (Supervision) Act 1993||131|
|Taxation Administration Act 1953||52|
|Therapeutic Goods Act 1989||259|
The legislation and associated offences span a range of industries and are aimed at protecting consumers and the environment, as well as protecting Australia’s financial system and national interests.
Table 4 provides additional information such as the number of less serious offences and the number of strict liability offences – including those punishable by imprisonment.
For example, while there are 902 offences under the Corporations Act 2001, there are 281 less serious offences and 393 strict liability offences, only nine of which are punishable by imprisonment.
“Less serious offences” refer to offences attracting a maximum penalty of up to and including 300 penalty units for a corporation. As of March 2021, the value of a penalty unit is $222. Therefore, less serious offences are those where the maximum penalty is less than or equal to $66,600.
Infringement notices and non-monetary penalty regimes
Table 5 of the report provides a summary of infringement notice and non-monetary penalty regimes under the reviewed legislation.
For some offences, an infringement notice may be allowed as a penalty instead of prosecution. Legislation where an infringement notice is allowed for criminal offences includes:
- Anti-Money Laundering and Counter-Terrorism Financing Act 2006.
- ASIC Act 2001.
- Corporations Act 2001.
- Environment Protection and Biodiversity Conservation Act 1999.
- Excise Act 1901.
- Fair Work Act 2009.
- National Consumer Credit Protection Act 2009.
- Superannuation Industry (Supervision) Act 1993.
- Telecommunications Act 1997.
- Therapeutic Goods Act 1989.
Infringement notices can also be an option when considering civil penalties and are available for some contraventions where an infringement notice is not available for criminal offences, including those under the Agricultural and Veterinary Chemicals (Administration) Act 1992 and the Competition and Consumer Act 2001.
Table 5 also covers the availability of non-punitive orders, adverse publicity orders, disqualification orders, and company deregistration orders.
Individual liability for corporate offences
Table 6 of the report provides a summary of individual liability for corporate offences.
Accessorial liability provisions
Table 6.1 outlines accessorial liability provisions in the legislation. For each Act, the table outlines the types of liability (civil/criminal), classes of individuals liable, and the level of complicity required.
For example, under the Corporations Act 2001 there are various civil and criminal penalties available under different sections of the Act. For this and most other offences, individuals are personally liable for being “involved in” the offences. In some cases, there is a further requirement that the involvement was dishonest, intentional or reckless.
Extended management liability provisions
Table 6.2 outlines extended management liability provisions in the legislation. For these offences, liability relates to a person’s position within a company.
The applicable legislation and type of offence will influence:
- Who liability is attributed to; this may be company directors, executive officers, and other positions involved in the management of the corporation.
- What the prosecution/regulator must prove. This can include:
- Committing a corporate contravention.
- Knowledge that, or recklessness or negligence as to whether, contravention would occur.
- Being in a position to influence the conduct.
- Failure to take all reasonable steps to prevent the conduct.
Extended management liability provisions are not applicable to all legislation, and no provisions were identified relating to a number of Acts including the Anti-Money Laundering and Counter-Terrorism Financing Act 2006, Competition and Consumer Act 2010, and Superannuation Industry (Supervision) Act 1993.