James Stevens (Sturt, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the second reading of the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023, which obviously sits within a broader framework of integrity measures that we in this parliament and in previous parliaments have, I think, a good track record of progressing.

I'd start by saying that I think we can all respect and understand that these sorts of topics require legislation to be fairly regularly refreshed and updated. Much like we've passed some other important integrity measures through the parliament in recent times—which continue to take us forward and ensure that we have a very robust framework in place in our society—thus it is the case that, with the amendment here, we are making sure that we have the most robust framework in place to make sure that Australians and/or Australian businesses are not engaging in the bribery of foreign officials. It's been a great development over recent decades that Australian companies are so deeply integrated and engaged in the global economy. I'm sure everyone in this place very much understands that it is the strong export performance of our businesses that underpins the standard of living that we have in this country and that we're all very grateful for.

There are so many businesses to be proud of that are doing great things overseas. I'm very proud to have worked for a great Australian exporting company, Michell, the wool company, established in South Australia in 1870. It's still a family business, with the sixth generation of the family in the business and the fifth generation at the helm. I spent eight years working at that business.

It was certainly the first experience that I'd had in dealing in foreign trade and international commerce, and it was extremely eye-opening. As much as you think you understand running a business and the commercial environment in your own country, once you get exposed to transactions across borders, it absolutely transforms your understanding of and your appreciation for, frankly, the structure and order and quality of the way in which the Australian economy operates. Being in the textile industry, of course, there were some particularly interesting markets that I had the privilege and pleasure to be exposed to and to work in, as I rose through the ranks of the company and then into leadership roles in some significant markets.

At that company, and in talking with compatriots engaged in selling good Aussie produce to the rest of the world, I learned a lot and heard a lot about the challenges and risks of doing business in other countries. Certainly, I'm sure there are temptations for businesses and individuals to engage in practices that sometimes are presented to them as being just, as that famous expression goes, 'part of doing business' in a particular part of the world. But we should have standards that we set for our businesses and our citizens that we expect them to be held to, not only in our own country but wherever they are and whatever they're doing around the world.

The essence of this amendment is to strengthen the legislative situation around penalties et cetera for the bribing of foreign public officials. Regrettably, those temptations are there, pretty consistently, around a lot of countries. I saw, at times, interesting behaviours and practices from some market participants and some competitors, frankly—particularly around tax avoidance and things like dubious invoices, or multiple invoices, depending on whether it was the invoice for the purposes of calculating a customs tariff, or the amount that would be declared in a particular market for the purposes of the tax that that company might pay in that market, or the actual transaction that would invariably be made into a numbered Swiss bank account or what have you. There are certainly some wild practices that occur in international trade and global commerce. But we shouldn't laugh them off or think, 'Oh, well, that's all part of doing business,' because it shouldn't be.

The important thing, when we're debating this bill, is to be aware of the fact that there isn't much strengthening framework amongst other countries. Certainly the United States have been a leader in this area; I think they were one of the first countries, or possibly the first jurisdiction, to legislate an offence in this area. We are, of course, a signatory to an important framework that sees other countries that we would expect to be in the company of, when it comes to legislation in these areas, like the United Kingdom, having similar legislative frameworks being put into place.

But I think it is also important to note in the debate, and certainly my understanding is that, whilst the offences exist, there have been very limited prosecutions or particularly successful prosecutions. Although I would hope that that was because there's almost no offending going on, regrettably it is probably more likely the case that the offending is not being captured as much as the purpose of the legislation envisaged—hence, we are here debating this bill right now. So we need to be strengthening the provisions in that act and putting stronger powers in place for the investigating agencies to make sure that we're holding Australian companies and Australian citizens to the highest standards when it comes to the way in which they do business and the conduct that they engage in when they're seeking to, through legal means, be as competitive and as successful as they possibly can be internationally.

I want to conclude by paying tribute again to the successful Australian businesses that make us so proud through the way in which they succeed around the world. There are some great ones, particularly from my home state of South Australia. I mentioned a company that I worked for, Michelle, but I'm also particularly proud to have the great Penfolds winery located in the heart of my electorate. The original Magill Estate winery is probably in the absolute middle of my electorate, and I wish part of being the local member meant better treatment from them when it comes to free produce sampling at Grange release time, but it turns out that isn't something they do for the local federal member, understandably. But I am very proud of businesses like Penfolds and Michelle.

There are so many businesses that are succeeding on the international stage and, as I say, exporting goods and services and growing our economy. We know that the vast majority—almost the entirety—of them are doing the right thing. Some of them, like Penfolds, are actually victims of practices such as the counterfeiting of their brand and their wine, which occurs unfortunately all too frequently around the world, but that's, I suppose, a backhanded compliment and indication of the esteem that that brand is held in. We want them to be successful, but we also want them not to compromise their ethics and their integrity. We should have a framework in place that ensures that we set a standard for our businesses and individuals in those businesses that doesn't tolerate practices like the bribery of foreign public officials. On that basis, I commend the bill to the House.

David Smith (Bean, Australian Labor Party) Share this | Link to this | Hansard source

The Albanese government has no tolerance for corruption of any kind, whether in the public sector or in the private sector. Since coming to office just over a year ago, we have walked the walk and we have got on with the job through action. With the support of this parliament, we are restoring integrity, honesty and accountability to government with the commencement of the National Anti-Corruption Commission. During the 2022 federal election, Australians were clear that they wanted a national anticorruption watchdog and they wanted a government that they could trust. Indeed, the electors of my electorate in Bean were very clear in wanting the National Anti-Corruption Commission, many of them spending much of their careers in public administration. They clearly put integrity on the ballot, and they voted accordingly.

The measures in the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023 address challenges with detecting, investigating and prosecuting foreign bribery in Australia. These measures build on our work to date in tackling corruption. Foreign bribery is another form of corruption, and it's an insidious problem across the world. Bribery, in particular, harms investment and economic growth. It distorts markets, artificially inflates prices and leads to substandard products being procured. Further, it undermines efforts against poverty and disease and facilitates serious transnational crimes. Bribery corrodes good governance and contributes to social and economic inequality in local communities where it occurs. It is rightly the business of this parliament to be addressing these issues.

Thankfully, Australia is party to a number of international instruments aimed at fighting corruption including bribery. These include the United Nations Convention Against Corruption, the United Nations Convention Against Transnational Organized Crime, the Organisation for Economic Co-operation and Development, the OECD, and the Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions. In addition, Australia's also engaged in the following regional and international forums and initiatives: the G20 Anti-Corruption Working Group, the OECD Working Group on Bribery in International Business Transactions, the Anti-Corruption and Transparency Experts Working Group and the ADB-OECD Anti-Corruption Initiative for Asia-Pacific.

Undetected and unpunished, bribery undermines the reputation of all Australian business and negatively impacts business and government relations. The Australian government has a zero-tolerance policy in relation to foreign bribery and supports ethical business practices. This bill is both welcome and overdue. Bribery by its very nature is incredibly difficult to investigate and prosecute. It is both opaque and sophisticated. Sadly, as other speakers have already said, there have been relatively few foreign bribery prosecutions in Australia. The current foreign bribery defence in division 70 of the Commonwealth Criminal Code has been overly prescriptive and difficult to use. The bill seeks to address this issue. It does so by replacing the existing foreign bribery offence with a new, carefully developed offence. For example, the prosecution needs to show that both the bribe and the business advantage were 'not legitimately due'. This wording presents difficulties for prosecutors, so it will be replaced with 'improperly influencing a foreign public official'.

This bill also broadens the scope of the foreign bribery offence so that it will now capture bribery conducted to obtain personal advantage. This is because experience shows that bribes can include a range of benefits, including personal honours, the processing of visa or immigration requests, or reducing personal tax liability. Further, this bill seeks to prevent foreign bribery in the first place by implementing a new indictable corporate offence. This is in order to overcome the problem of companies that wilfully turn a blind eye to misconduct by their employees. These provisions will apply to companies when an associate bribes a foreign public official for the profit or gain of the corporation. Importantly, the offence would not apply if a body corporate was able to demonstrate that it had adequate procedures in place to prevent the bribe in the first instance. In a positive sense, this new provision will provide an incentive to companies to be proactive about preventing bribery. I know many Australian companies already have rigorous procedures in place to combat bribery, and I commend them on this. To assist those companies that may not have the necessary procedures in place, guidance material on what constitutes adequate procedures will be produced.

The measures in this bill may sound very familiar to those opposite. That's because they're virtually identical to the amendments introduced by those opposite in 2017 and then reintroduced in 2019. Both times, under the watch of those opposite, those bills were allowed to lapse, failing to even be debated. The previous government had years to bring the measures forward for debate and pass them. It didn't. On these matters of corruption and bribery, there can be no leeway. We must be vigilant. The stakes are too high. Australia's international reputation for world-leading corporate governance, including antibribery provisions, must be protected, and this bill does that. Indeed, the fact that this bill will help the government to crack down on bribes that are built into seemingly legitimate contractual arrangements is a particular positive.

What makes this bill particularly critical is recent reports of millions of taxpayer dollars allegedly being paid to foreign officials through suspicious contracts between private companies and subcontractors engaged by the Department of Home Affairs on Nauru and in Papua New Guinea. These are allegations of suspicious contracts during the time when the now Leader of the Opposition was the Minister for Immigration and Border Protection and the Minister for Home Affairs. He was in charge. He knew what was going on, one would assume. Reports suggest that the Department of Home Affairs may have disregarded what was effectively a bribe disguised as a legitimate contractual arrangement. This happened, as I said, when the now Leader of the Opposition was the Minister for Home Affairs. He had responsibility. Furthermore, when the now Leader of the Opposition was in his role as the Minister for Home Affairs, he knew that his department had a multimillion-dollar regional processing contract with a man who'd been charged by the AFP with foreign bribery. Even if the Leader of the Opposition claims that he did not know about the bribery at the time, these contracts became a matter of public record in September 2018. In September 2018 Mr Bhojani, who was associated with Radiance International, was charged by the AFP for foreign bribery. In August 2020 he was convicted, after pleading guilty. The department continued to pay Mr Bhojani millions of taxpayer dollars and extended contracts with his company during this period.

Mark Dreyfus (Isaacs, Australian Labor Party, Cabinet Secretary) Share this | Link to this | Hansard source

Shame!

David Smith (Bean, Australian Labor Party) Share this | Link to this | Hansard source

Disgraceful indeed.

One of the companies related to suspicious contracts on Nauru was Canstruct International. A contract was awarded to this company to provide welfare and garrison services on Nauru, despite the company not having any experience of providing either of these services to vulnerable people. The contract between the department and Canstruct International was extended many times, without a competitive tender. This was a shelf company with no relevant experience, getting a $1.8 billion contract, without a competitive tender, from the former government. We also know that the Leader of the Opposition knows this company very well. Executives of Canstruct enjoyed exclusive access to the now Leader of the Opposition during this period. These sorts of arrangements are exactly what this government intends to target through amendments to this bill.

I will say that the corporates in this case, in respect of this bill, will be protected where they can show that they have followed adequate procedures that are in place to prevent foreign bribery by an associate. As I said before, we're going to have guidance material for the corporations. They can follow that guidance material and then make sure that they're above reproach. The UK has utilised a similar offence to prosecute companies in a few cases of foreign bribery. These are reforms that ensure that a company cannot simply ignore bribery conducted by its employees or contractors where it results in benefits for their business. They cannot pretend that it's business as usual.

Companies can currently avoid criminal liability under existing offences in the Criminal Code even if they know or strongly suspect foreign bribery is occurring. These companies have been able to remain wilfully blind to the activities of their associates, including through the use of third-party agents located offshore. These reforms will enable bribery by an associate of a corporation to trigger corporate liability.

The reforms will also create a new offence—that is certainly true—for corporations that fail to prevent foreign bribery. The maximum penalty will be $27.5 million or higher. Companies can also be held directly liable for the foreign bribery activities of their employees, external contractors, agents and subsidiaries, unless a business can demonstrate that they had adequate procedures in place. That is eminently fair. You are responsible, as an entity, for the operations that you are conducting as a corporate entity. These reforms are about ensuring accountability, something that was very far away from the minds of the opposition when they were in government, with respect to sitting on this bill and doing nothing for so many years.

We know that prosecuting for foreign bribery is currently so challenging. As I said earlier, that's why we are making the changes to the definitions in division 70 of the Commonwealth Criminal Code.

As part of this bill, the existing foreign bribery offence will be replaced to ensure that it better captures typical cases of foreign bribery identified by law enforcement. Prosecutors currently need to show that both the bribe and the business advantage it sought were 'not legitimately due', which is difficult in cases where bribes are disguised as legitimate payments. This bill replaces the need for this and instead requires prosecutors to demonstrate the improper influencing of a foreign public official. It also broadens the scope of the foreign bribery offence to include bribery conducted that involves a personal advantage, not just a business advantage. It modifies the definition of 'foreign public official' to include candidates for public office—quite rightly. The bill also introduces a new corporate offence of failure to prevent foreign bribery. This relates to cases where an associate of a body corporate has committed bribery for the benefit of the body corporate.

The Albanese government is taking action on foreign bribery by Australian companies after 10 years of nothing happening. This is about accountability and the value of accountability, which we hold high. This is about having no tolerance for corruption. That is why we are pushing ahead with this bill, despite the empty protestations of some of the speakers opposite and the do-nothing attitude that was emblematic of the opposition when they were in government. It's time for us to take action. It's time for us to pass this bill through the House.

Mark Dreyfus (Isaacs, Australian Labor Party, Cabinet Secretary) Share this | Link to this | Hansard source

The government thanks the members who've contributed to this debate on the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023. I would note the many contributions that have drawn attention to the lack of seriousness with which the former government approached this question of foreign bribery and the lack of seriousness with which the former government approached not only the question of foreign bribery but looking into allegations of foreign bribery when they arose and looking into the interaction of foreign bribery with a range of contracts that the former government had entered into.

To go to the purpose of this bill, it is to strengthen the legal framework for prosecuting foreign bribery and to give effect to Australia's international obligations under the OECD anti-bribery convention. The government has no tolerance for corruption of any kind, whether in the public sector or in the private sector. Foreign bribery is corruption. It is an insidious problem across the world. It harms communities, impedes economic development and undermines the rule of law. The measures in the bill are long overdue.

As a number of members have noted in the course of this debate, the former government introduced a bill containing virtually identical amendments in December of 2017. It was accompanied by a strongly worded media release. And then? Nothing. Without any explanation, the former government never even brought that bill on for debate. It lapsed at the end of the 45th Parliament. In December 2019, some six or so months after the 2019 election, the former government introduced another bill containing the same amendments, accompanied again by another strongly worded media release. But that bill was never brought on for debate either. Once again, without any explanation, the former government allowed these critical measures to lapse. In other words, after the 2019 election, the former government brought back the bill in December 2019 and that was the last we heard of it. It was so typical of the incompetent former government, a government that was very, very big on announcements and very, very small on action. What a disgrace that the inaction should have been on foreign bribery.

The Albanese government has a different approach to the insidious problem of foreign bribery. This government is committed to acting where the former government failed to act. As a signatory to the OECD anti-bribery convention, Australia is required to ensure that our laws are effective in holding natural and legal persons to account for foreign bribery.

To do this, the bill amends the current foreign bribery offence to replace the requirement that the advantage sought be 'not legitimately due' with the concept of 'improperly influencing a foreign public official' to capture bribes concealed as legitimate payments. The bill also broadens the scope of the offence to ensure that it keeps pace with the evolution of foreign bribery conduct. The new offence will capture bribery conducted for personal advantage, not just a business advantage. It removes the requirement that a foreign official be influenced in the course of their official duties. It also makes clear that the prosecution does not have to prove that an accused had a specific advantage in mind and that the advantage can be obtained for someone else.

The bill also introduces a new offence for companies that fail to prevent foreign bribery by an associate unless the company can show that it had adequate proceedings in place to prevent foreign bribery. The bill requires the Attorney-General to publish guidance on the steps that a body corporate can take to prevent an associate from bribing foreign public officials. The Attorney-General's Department released a draft version of the guidance in 2020 for public consultation. Once the measures in this bill are enacted, a final version of the guidance will be published in advance of the commencement of the new corporate offence to ensure businesses have sufficient time to implement adequate procedures.

During the course of the debate, a number of honourable members on the opposite side of this chamber raised the issue of deferred prosecution agreements. Under the former government's proposed deferred prosecution agreement scheme, which it introduced into the parliament twice—just to remind members, that was in 2017 and then, when that bill lapsed at the 2019 election, we got another bill after the 2019 election, but it was never taken forward, never implemented—the Commonwealth Director of Public Prosecutions would have been encouraged to negotiate so-called deferred prosecution agreements with companies that have engaged in criminal activity, as an alternative to prosecution. Under a deferred prosecution agreement, a company could negotiate the payment of a penalty and undertake to do certain things to ensure it or its employees don't engage in the conduct again. If the company breached the agreement, the Commonwealth Director of Public Prosecutions would be able to prosecute. Under the proposed scheme, corporations that engaged in serious criminal conduct would enjoy the unique privilege of being able to negotiate their own punishment under a deferred prosecution agreement.

As I said in my second reading speech, when ordinary Australians commit crimes, they feel the full force of the law. However, under the deferred prosecution agreement scheme proposed by the former government, companies that engaged in serious corporate crime, including foreign bribery, would have been able to negotiate a fine, agree to a set of conditions and have their cases put on indefinite hold. This government will only entertain the introduction of such a scheme as a measure of last resort and, in any event, after the measures introduced by this bill have been implemented and given time to work.

Corruption is never acceptable and this government's starting point is that when companies engage in serious criminal wrongdoing, like foreign bribery, they should feel the full force of the law. This bill enhances Australia's response to foreign bribery and supports our obligations under the OECD antibribery convention. It is shameful that the former government, over years and years—over two terms of this parliament—failed to legislate to give effect to Australia's international obligations and failed to act to do more about foreign bribery. This bill demonstrates our government's commitment to tackling corruption and, in particular, ensuring our laws are effective in detecting, investigating and prosecuting foreign bribery. I commend the bill to the House.

Question agreed to.

Bill read a second time.