Corruption in business. A critical appraisal of the Australian regulatory regime in the light of the UK Bribery Act 2010
| DOI | https://doi.org/10.1108/JFC-02-2020-0018 |
| Date | 20 April 2020 |
| Published date | 20 April 2020 |
| Pages | 735-754 |
| Author | Afroza Begum |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial crime |
Corruption in business
A critical appraisal of the Australian regulatory
regime in the light of the UK Bribery Act 2010
Afroza Begum
School of Law, University of Wollongong, Wollongong, Australia
Abstract
Purpose –This paper aims to critically analysethe Criminal Code Amendment (Bribery of Foreign Public
Officials)Act 1999 and Crimes Legislation Amendment(Combating Corporate Crime)Bill 2017 with special
focus on the facilitation payment (FP) defence by referring to the UK Bribery Act 2010. The study will
showcase how FP promotes disrespectfor a good corporate culture inevitablefor responsible and sustained
business and as to why FP must be abolished to make the Australian regulation consistent with the
internationalstandards.
Design/methodology/approach –This research is based on primaryand secondary sources including
the Senate Committee Reports and recent legislativedevelopments in Australia, and the relevant law of the
UK.
Findings –Australia is lagging far behindcomparative jurisdictions including the UK, and the FP defence
must be abolished to make the Australianregulation consistent with the international standards and to foster
internationalbusiness backed up by globalisation, competitionand interconnectedness of national economies.
Originality/value –This paper is the original work of the author and has not beensubmitted elsewhere
for publication.
Keywords Australia, Legal approach, Business, Revisited, Facilitation payment
Paper type Research paper
1. Introduction
Ethical and responsible business has been an important aspect of regulatory governance
in Australia. There has been a strong consensus on stimulating and sustaining a legal
environment that will effectively deter corrupt practices in business. The introduction of
a range of laws and institutional mechanisms and the ratification of relevant
international conventions demonstrate Australia’ssincereeffortstocombatdamaging
impacts of corruption on business. Australia’sfirm stand against bribery is vividly
revealed in a report which duly recognises that corruption impairs the development of an
efficient and fair business culture by devaluing consumer confidence, integrity and
stability of the society and by exacerbating the disadvantaged situation of the poor[1].
Consequently, bribery as a criminal offence has been outlawed for an individual with 10
years of imprisonment and/or a fine of 10,000 penalty units. The extraterritorial
application of the anti-bribery law and the recently introduced Crimes Legislation
(Combatting Corporate Crime) Bill 2017 commensurate with the Senate Committee’s
reports2018alsoreflect Australia’s seriousness in tackling bribery in business[2].
Despite this progressive development and endorsement of a strict penalty provision, the
lack of prosecution and the facilitation payment (FP) defence as endorsed by the Criminal
Code Amendment (Bribery of Foreign Public Officials) Act 1999 (Cth) (The Act 1999) have
caused significant controversy in recent years. In response to this controversy, Australia
is currently reviewing its anti-bribery laws.
Australian
regulatory
regime
735
Journalof Financial Crime
Vol.27 No. 3, 2020
pp. 735-754
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-02-2020-0018
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1359-0790.htm
This paper critically examinesthe Act 1999 with special focus on FP by referring to the
UK Bribery Act 2010 (UBA 2010) and concludes that FP must be abolished to make the
Australian regulationconsistent with the international standards and to fosterinternational
business backed up by globalisation, competition and interconnectedness of national
economies. It also elucidates contemporary legislative initiatives of Australia to combat
bribery and corruption.
This paper is structured as follows. Section 2 briefly sketches the legislative and
administrative frameworks of corruption by highlighting Australian adherence to
international commitment. Followed by a range of recommendations, Section 3 critically
evaluates the regulatory framework with special focus on the way the FP has been
entrenched in the Act 1999. This part also incorporates recent legislative developments
designed to remove impediments to a successful prosecution as compared to the UBA 2010
while Section 4 presentsthe conclusion.
2. Legislative and administrative frameworks
Australia being a federation of six states and two self-governing territories, corruption in
business has been dealt with by the federal and state governments.The federal government
(the Commonwealth) regime criminalises bribery of the federal public officials and foreign
public officials. The Criminal Code (Cth) does not criminalise bribery in the private sector;
the states and territories are left to legislatein this area. Indirect commonwealth legislation,
however, is provided to some extent by the prescription of directors’duties in the
Corporations Act 2001 (Cth) and by the market-sharing and price-fixing in Part IV of the
Competition and Consumer Act 2010 (Cth)[3]. This articlefocuses on the federal legislation,
especially the Act 1999and the recent developments in relation to corruption in business.
Combating corruption in Australia is subject to multi-layered governance involving
various agencies withinand beyond its border. The Act 1999, Criminal Code Act 1995 (Cth),
Public Service Act 1999 (Cth), International Trade Integrity Act (2007) (Cth), Financial
Management and Accountability Act 1997 (Cth), Corporations Act 2001 (Cth), Proceeds of
Crime Act 2002 (Cth), Mutual Assistance in Criminal Matters Act 1987 (Cth) and
Competition and Consumer Act 2010 (Cth) constitute themajor laws regulating corruption
in business and Australia is a party to a number of important international conventions[4],
including the United Nations (UN) Convention against Transnational Organised Crime
2003. Even though there is no single national anti-corruption policy and enforcement
mechanism at the federal level, each state and territory has different laws, implementing
agencies and methods to deal with corruption in business (McMillan, 2008). A number of
independent commissions responsible for investing and enforcing corruption or bribery at
both federal and state levelsinvolve the Australia Criminal Intelligence Commission(ACIC),
Australian Commission for Law Enforcement Integrity, Australian Federal Police’s, Fraud
and Anti-Corruption Centre, the Attorney-General’s Department, Australian Securities and
Investment Commission, Independent Commission Against Corruption’s, NSW and the
Australian TransactionReports and Analysis Centre[5].
Investing corruption allegations, monitoring compliance by corporations with relevant
laws, “undertaking a risk assessment of agency systems”and promoting integrity in
business culture viadeveloping guidelines, raising public awareness,education and training
are the primary responsibilities of those statutory commissions. Relevant standards and
guidelines, self-regulation and industry code of conducts developed by those institutions
have been important sources of regulation. These not only provide continued oversight of
businesses and government but also exist as a constant reminder to concerned individuals
that their behaviour is under regularscrutiny. Additionally, ACIC helps understand various
JFC
27,3
736
To continue reading
Request your trial