INTERNATIONAL examiners have savaged Australia’s enforcement of foreign bribery laws and highlighted extensive failures in the handling of our only foreign bribery prosecution to date: the Reserve Bank companies’ corruption scandal.
”The lead examiners are concerned that the AFP may have closed foreign bribery cases before thoroughly investigating the allegations,” a report by the Organisation for Economic Co-operation and Development says.
The report says Australian businesses were highly exposed to foreign corruption, but prosecutors and federal police were under-resourced and investigators lacked experience in targeting corporate crime. Despite 28 cases reported to federal police since the introduction of laws in 1999, criminal charges had been laid over only one.
Eight former executives of Reserve Bank companies Note Printing Australia and Securency are facing committal proceedings in the Melbourne Magistrates Court over alleged conspiracy to bribe foreign officials in order to gain banknote-supply contracts in Indonesia, Malaysia and Vietnam. Evidence is due to finish next week.
The OECD report said the case brought against the two companies highlighted:
■ A lack of co-ordination between federal police and the corporate regulator ASIC, which investigates breaches of directors’ duties. ”Miscommunication between the AFP and ASIC may have left important aspects of foreign bribery cases uninvestigated.”
■ A need for stronger whistleblower protections, noting: ”The Securency/NPA case was initially rejected without investigation when a whistleblower first approached the AFP in 2008. An investigation began only after the company self-reported wrongdoing to the AFP in the following year.”
■ Austrade’s role in introducing foreign agents to Australian companies after a ”cursory” background check, saying the government should ”consider taking concrete steps to encourage companies, in the strongest terms, to conduct due diligence on agents”.
■ Reported suggestions that Reserve Bank and federal government officials knew of corruption allegations but did not report them to police, indicating a working group ”should follow up the issue of foreign bribery reporting by Australian officials in the Securency/NPA matter when Australian authorities are at liberty to discuss this issue [once court proceedings have concluded]”.
A specialist in corruption law, Johnson Winter & Slattery partner Robert Wyld, said Australia was ”reactive” in implementing foreign bribery laws. ”When somebody like the OECD comes to visit and starts asking questions … is when the government starts to react.”
The OECD – which also noted that some progress had been made since its last report in 2005 – was the subject of cross-examination in the committal of the former executives in October.
A spokeswoman for the Australian Federal Police yesterday said the enforcement of foreign bribery laws was a ”high priority for the Australian government” and investigations were ”inherently complex due to their cross-border nature”.
She said that in August 2011 the AFP reviewed all foreign bribery cases that had been closed without charges. Two cases were reopened ”to exhaust all lines of inquiry” but have since been finalised without charges.
An Austrade spokesman said the agency had implemented major reforms following a review in 2011. ASIC declined to comment.
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