Combatting foreign bribery: Will 2024 be the year?

27 February 2024

Following the release of Transparency International’s annual Corruption Perceptions Index in January, all eyes are on Canberra as the long-awaited Combatting Foreign Bribery Bill 2023 continues to stall in the Senate. 

The latest Corruption Perception Index—an index that tracks how corrupt governments are perceived to be—placed Australia at 14th. This represents a marked decline, with Australia consistently ranking in the “top ten least corrupt countries” only a decade ago. Whilst acknowledging promising developments, such as the establishment of the National Anti-Corruption Commission (NACC), Transparency International Australia CEO, Clancy Moore recently conceded that our nation still has a way to go:

“Unfortunately, last year saw corruption allegations against former MP Stuart Robert, the PWC scandal, Robodebt and foreign bribery claims against government contractors in Nauru and PNG.”

The Combatting Foreign Bribery Bill is a crucial step in the fight against foreign corruption. It is now more than six years since the first Bill of its kind was unsuccessfully introduced to Federal Parliament and in 2019, another failed attempt was made to bolster the current legislation. Much like the two attempts before it, the current Bill has been subject to several delays and setbacks. But will 2024 finally be the year in which we see legislative change? The second reading of the Bill was recently held in the Senate and there is an expectation that the Albanese government will push hard for these amendments. 

The OECD has long been calling on Australia to both ramp up its action against companies that fail to implement proactive anti-foreign bribery controls, as well as make an example of companies that do the wrong thing. However, we have seen only three prosecutions for foreign bribery offences since 2011.  

Understanding the Bill

As outlined in the Bill’s explanatory memorandum, the Bill is intended to “further strengthen Australia’s implementation and enforcement of the Anti-Bribery Convention by strengthening the legal framework for investigating and prosecuting foreign bribery.” In doing so, the Bill introduces proposed changes to the Criminal Code Act 1995 (Cth) that includes the introduction of an offence for failure to prevent foreign bribery. If passed, Australian companies will be held strictly liable if an associate engages in bribery of a foreign public official for the company's profit or gain. Fines for breaches are expected to total up to $27.5 million (or 10% of the company's annual turnover). Companies should also be mindful that the definition of an associate will be expanded to include subsidiaries, officers, employees, agents or contractors.

It now seems a matter of when, and not if, anti-bribery legislation will be strengthened and greater penalties imposed. Whilst we expect there will be a grace period, many organisations will have a lot of work to do in anticipation of these changes. Genuine change is needed. Business leaders must clearly understand, articulate and document the corruption and foreign bribery risks that exist within their organisation, ensuring there is a program in place to mitigate those risks effectively.

Here are other factors to consider when determining what these changes could mean for your organisation:

  • Policy and Procedure Review
    Introduce required changes to existing anti-bribery policies and procedures, and consider which other policies and procedures may also need to be addressed across the business (ie. Gifts and Benefits, Conflicts of Interest, Whistleblower programs).

  • Training Programs
    Implement robust training programs to educate staff about the new legislative requirements and limitations, emphasising the consequences of non-compliance. Ensure that these programs are documented, attendance is recorded, and the course materials are tailored and relevant to the operations of your individual business.

  • Data Analytics
    Do you really understand what information lies in your data? What could this data be telling you about the risks in your company? Proactive data analytics may uncover high risk areas of the business and help to demonstrate an ongoing commitment to transparency. The devil is always in the detail.

  • Due Diligence
    Do you really know who are you doing business with? It is crucial that business leaders can demonstrate that due diligence has been carried out and risks have been both managed and mitigated concerning suppliers or agents engaged internationally on the company’s behalf.

If passed, the Combatting Foreign Bribery Bill 2023 will represent a significant shift in Australia’s fight against foreign bribery and corruption. Company leaders must not only demonstrate that they have policies, procedures and systems to mitigate domestic and foreign bribery risks, but that they are also promoting a culture of integrity. Along with the establishment of the NACC, this Bill signals real change and an expectation that corporate Australia will be held accountable.

McGrathNicol assists clients in managing risk and complexity.