"adequate procedures" to prevent foreign bribery

The Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017 (Bill) is currently before the Senate, which will amend the Criminal Code Act 1995 (Cth) (CCA) and the Director of Public Prosecutions Act 1983 (Cth) to, among other things, introduce a new corporate offence of ‘failing to prevent bribery of a foreign public official’.

The Proposed Offence makes corporations liable for the actions of their associates, if they have bribed a foreign public official, however a company will not be liable if it can prove that it had adequate procedures in place to prevent its associates from committing the offence.

In a recent resource sheet, Austrade outlines some key considerations, and clarifies what ‘adequate procedures’ an organisation needs to have in place to ensure compliance with anti-bribery legislation.

 

How is an ‘associate’ defined?

‘Associate’ is defined under the Bill as follows:

A person is an associate of another person if the first-mentioned person:

  • is an officer, employee, agent or contractor of the other person; or
  • is a subsidiary (within the meaning of the Corporations Act 2001) of the other person; or
  • is controlled (within the meaning of the Corporations Act 2001) by the other person; or
  • otherwise performs services for or on behalf of the other person.

 

‘Adequate procedures’

Decisions in the UK and US have considered what constitutes ‘adequate procedures’ to prevent the commission of a bribery offence, and these cases provide useful guidance within the Australian context, together with guidance materials from the International Standards Organisation.

The following factors have been identified as relevant in determining whether or not a company has taken ‘adequate steps’ to prevent the commission of a bribery offence by their associates:

  • A ‘culture of compliance’ and genuine engagement with anti-bribery obligations – corporations need to demonstrate that not only have relevant anti-bribery policies and procedures been created, but that they have been sufficiently implemented, communicated (internally and externally) and ‘embraced’ by key stakeholders, and are subject to ongoing monitoring.
  • Quality of policies and training – anti-bribery policies and training need to be of a sufficient quality and clarity, as well as being tailored to the organisation, and regularly reinforced.
  • Dedicating a role to focus on compliance with anti-bribery obligations – a person or team should be put in charge of anti-bribery compliance, even in small organisations.
  • Record keeping – companies should keep a record of all steps they have taken towards compliance.
  • Recognition of higher risks in some jurisdictions – if corporations are operating in jurisdictions that have more significant bribery risks, this should be factored into the corporation’s anti-bribery approach and procedures.
  • Subsidiaries – both subsidiaries and parent companies need to take responsibility for their own anti-bribery procedures, policies and strategy.
  • Independent reports – it may be useful for an independent third party to evaluate the corporations’ operations and compliance with anti-bribery obligations. However, a company must address the report findings to be seen as having ‘adequate procedures’ in place.

Nyman Gibson Miralis provide expert defence in complex foreign bribery cases, and are experienced in assisting companies to effectively achieve compliance with anti-bribery and corruption legislation.

Contact us if you require assistance.