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2019
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
CRIMES LEGISLATION AMENDMENT (COMBATTING CORPORATE CRIME)
BILL 2019
EXPLANATORY MEMORANDUM
(Circulated by authority of the
Attorney-General, the Hon Christian Porter MP)
CRIMES LEGISLATION AMENDMENT (COMBATTING CORPORATE CRIME)
BILL 2019
GENERAL OUTLINE
1. This Bill amends the Criminal Code (which is a schedule to the Criminal Code Act
1995), Director of Public Prosecutions Act 1983, Administrative Decisions (Judicial Review)
Act 1977, Crimes Act 1914, Income Tax Assessment Act 1997 and A New Tax System (Goods
and Services Tax) Act 1999.
2. The Bill contains measures to address challenges associating with detecting and
addressing serious corporate crime. The opaque and sophisticated nature of serious corporate
crime can make it difficult to identify and relatively easy to conceal. Investigations into
corporate misconduct can be hampered by the need to process large amounts of complex data
and conduct lengthy negotiations over claims of legal professional privilege. Evidence may
be held overseas and therefore require investigators to engage with mutual assistance
processes. Court proceedings can be long and expensive, particularly against well-resourced
corporate defendants.
3. The Bill contains three schedules.
4. Schedule 1 amends the Criminal Code by amending Division 70 (bribery of foreign
public officials). More specifically, Schedule 1 of the Bill:
Amends the offence of bribery of a foreign public official (section 70.2 of the
Criminal Code) with the aim of removing undue impediments to successful
investigation and prosecution of foreign bribery offending. In general terms, this is
achieved by broadening the offence, removing unnecessarily restrictive requirements
and clarifying some requirements. The main changes to the existing offence are:
o the definition of foreign public official is extended to include a candidate for
office
o the requirement that the foreign official must be influenced in the exercise of
the official's duties is removed
o the requirement that a benefit and business advantage must be 'not
legitimately due' is removed and replaced with the concept of 'improperly
influencing' a foreign public official with instructive factors for determining
this concept provided, and
o the offence will extend to bribery to obtain a personal advantage.
Introduces a new offence of failure of a body corporate to prevent foreign bribery by
an associate. The body corporate would be liable where the associate committed the
bribery for the profit or gain of the body corporate. The offence would not apply if
the body corporate had in place adequate procedures designed to prevent the
commission of the foreign bribery offence by its associates.
Makes consequential amendments to the Income Tax Assessment Act 1997 to ensure
the continuation of the existing policy of prohibiting a person from claiming a
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deduction for a loss or outgoing the person incurs that is a bribe to a foreign public
official.
5. Bribery of foreign public officials by individuals and bodies corporate is a serious
problem across the world. It harms those who play by the rules, siphons money away from
communities, and undermines the rule of law. Bribery by Australians and Australian
businesses can damage our international standing and shrink the global market for our
exports.
6. Australia has been a committed party to the OECD Convention on Combating Bribery
of Foreign Public Officials in International Business Transactions (the Anti-Bribery
Convention) since 1999. The Anti-Bribery Convention obliges States parties to criminalise
the bribery of foreign public officials and implements a range of related measures to make
this criminalisation effective. Australia has given effect to these obligations through the
foreign bribery offence in section 70.2 of the Criminal Code, which carries significant
penalties for individuals and companies.
7. The Government has been exploring possible amendments to this offence to improve
its effectiveness in addressing foreign bribery, and to remove undue impediments to a
successful prosecution. The offence in its current form poses challenges for typical cases of
foreign bribery, which may involve the use of third party agents or intermediaries, instances
of wilful blindness by senior management to activities occurring within their companies and a
lack of readily available written evidence.
8. Schedule 2 of the Bill implements a Commonwealth Deferred Prosecution Agreement
(DPA) scheme.
9. Under the DPA scheme, the Commonwealth Director of Public Prosecutions (CDPP)
can invite a person (other than an individual) that has engaged in serious corporate crime to
negotiate an agreement to comply with a range of specified conditions. If a person fulfils its
obligations under the agreement (the DPA), it will not subsequently be prosecuted in relation
to the offences specified in the DPA. A breach of the terms of a DPA may result in the CDPP
commencing prosecution or renegotiating the terms of the DPA with the person. DPAs are
only available with respect to a specific set of serious corporate criminal offences.
10. The DPA scheme is designed to address some of the challenges in detecting and
addressing serious corporate crime by encouraging corporations to self-report misconduct by
offering greater certainty of outcome when compared to litigation, and an opportunity to
avoid some of the reputational and financial costs associated with lengthy criminal
investigations and trial processes. For this reason, DPAs are not available to natural persons,
and the scheme is designed to apply to corporations.
11. The scheme also aims to enhance the accountability of Australian business for serious
corporate crime and support improved corporate culture. For this reason, terms included in a
DPA will require a party to a DPA to admit to agreed facts detailing their misconduct, pay a
financial penalty to the Commonwealth and disgorge profits and other benefits obtained
through the misconduct. It is also likely that a DPA will typically require a corporation to
implement or improve a compliance program or policies, and cooperate in any investigation
relating to the matters specified in the DPA (including any investigation against individual
company officers).
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12. The Bill contains a number of safeguards to ensure that the DPA scheme does not
represent a 'free pass' to corporations who have engaged in serious corporate crime. For
example, a DPA will not enter into force until it has been independently assessed by an
'approving officer' who is an appointed former judicial officer. This will provide an extra
layer of certainty that the terms of the DPA are in the interests of justice and are fair,
reasonable and proportionate. The Bill also requires that the Director of the CDPP must be
satisfied that entering into a DPA is in the public interest before submitting a DPA to an
approving officer for consideration. The Bill further protects against exploitation of the DPA
process by allowing for the prosecution of a party who materially contravenes a DPA, or who
provided inaccurate, misleading or incomplete information to a Commonwealth entity in
connection with a DPA or a DPA negotiation.
13. Schedule 3 of the Bill repeals the existing definitions of 'dishonest' in the Criminal
Code and inserts a new definition of 'dishonest' into the Code's Dictionary. Under the new
definition, dishonest means 'dishonest according to the standards of ordinary people'.
14. This definition will align the Criminal Code definition of 'dishonest' with the test for
dishonesty endorsed by the High Court in Peters v The Queen (1998) 192 CLR 493. Under
the test adopted in Peters, there is no requirement to prove that the defendant was aware that
their knowledge, belief or intent was dishonest according to the standards of ordinary people.
15. The new definition of 'dishonest' will apply to conduct occurring wholly on or after
the commencement of the Bill. Where a relevant offence involves ongoing criminal conduct
which begins before and continues after the commencement of these amendments, the current
test in the Criminal Code will apply.
16. The new general definition of 'dishonest' is not intended to impliedly affect the
meaning of 'honest' or 'honestly' when those words are used in the Criminal Code within
their ordinary meanings.
FINANCIAL IMPACT
17. The Bill is unlikely to have a significant impact on consolidated revenue.
18. Schedule 1 is designed to remove impediments to successfully prosecuting foreign
bribery. This may result in an increased recovery of penalties for the foreign bribery offence.
19. Under the DPA scheme in Schedule 2, parties to a DPA will typically be required to
pay a financial penalty to the Commonwealth under the terms of that DPA. This may lead to
the recovery of penalties in cases that might not have otherwise proceeded to prosecution.
Where appropriate, a party to a DPA may also be required to compensate Commonwealth
agencies for any costs associated with the negotiation and administration of a DPA.
Otherwise, costs incurred by Commonwealth agencies as a result of the DPA process will be
absorbed by these agencies.
20. Schedule 3 will insert a new general definition of 'dishonest' into the Dictionary of
the Criminal Code and as a result the prosecution will no longer required to satisfy the second
limb of the current test for dishonesty. This may result in an increased recovery of penalties
for dishonesty offences under the Code.
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ACRONYMS
ADJR Act Administrative Decisions (Judicial Review) Act 1977
AFP Australian Federal Police
AGD Framing Guide Attorney-General's Department's Guide to Framing
Commonwealth Offences, Infringement Notices and
Enforcement Powers
ARC Administrative Review Council
CDPP Commonwealth Director of Public Prosecutions
Corporations Act Corporations Act 2001
Crimes Act Crimes Act 1914
DPA Deferred prosecution agreement
DPP Act Director of Public Prosecutions Act 1983
ICCPR International Covenant on Civil and Political Rights [1976]
ATS 5
ITAA Income Tax Assessment Act 1997
Judiciary Act Judiciary Act 1903
Peters Peters v The Queen (1998) 192 CLR 493
PROCEEDS OF CRIME ACT PROCEEDS OF CRIME ACT 2002
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STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019
21. This Bill is compatible with the human rights and freedoms recognised or declared in
the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny)
Act 2011. To the extent that the measures in the Bill may limit those rights and freedoms,
such limitations are reasonable, necessary and proportionate in achieving the intended
outcomes of the Bill.
Overview of the Bill
22. The Bill amends a number of Acts, including the Criminal Code Act 1995, Director of
Public Prosecutions Act 1983, Administrative Decisions (Judicial Review) Act 1977, Crimes
Act 1914, Income Tax Assessment Act 1997 and A New Tax System (Goods and Services Tax)
Act 1999.
23. Schedule 1 of the Bill contains measures to deliver a more effective response to
serious corporate crime. The Bill amends the offence of bribing a foreign public official
(foreign bribery offence) in Division 70 of the Criminal Code. It repeals the existing offence
in Division 70 and substitutes a new offence to remove undue impediments to successful
investigation and prosecution of foreign bribery offending by broadening the offence,
removing restrictive requirements and clarifying some requirements. It also introduces a new
offence of failure of a body corporate to prevent foreign bribery by an associate.
24. Schedule 2 of the Bill implements a Commonwealth deferred prosecution agreements
(DPA) scheme. Under the DPA scheme, the Commonwealth Director of Public Prosecutions
(CDPP) can invite a person (other than an individual) that has engaged in serious corporate
crime to negotiate an agreement to comply with a range of specified conditions. If a person
fulfils its obligations under the agreement (the DPA), it will not subsequently be prosecuted
in relation to the offences specified in the DPA. A breach of the terms of a DPA may result in
the CDPP commencing prosecution or renegotiating the terms of the DPA with the person.
25. Schedule 3 of the Bill introduces a general definition of 'dishonest' into the
Dictionary of the Criminal Code. Under the new definition, dishonest means 'dishonest
according to the standards of ordinary people'. This new definition will replace provisions in
the Code that apply the two-limb test for dishonesty (the Ghosh/Feely test) with the objective
test for dishonesty endorsed by the High Court in Peters v The Queen (1998) 192 CLR 493.
26. The measures in Schedules 1 and 2 of the Bill engage several applicable human rights
and freedoms (discussed below).
27. The measures in Schedule 3 do not engage any of the applicable human rights or
freedoms. These measures merely amend the definition of 'dishonest' for offences in the
Criminal Code, although offences in other statutes which expressly pick up the Criminal
Code definition will also be affected. The new definition of 'dishonest' does not impose
additional criminal liability, create or increase a criminal penalty or operate retrospectively,
but is intended to align the definition with the preferred definition at common law. Further,
this measure does not affect any of the rights and freedoms relevant to criminal prosecution,
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including the right to minimum guarantees in criminal proceedings, the fair trial rights and
the fair hearing rights enshrined in the International Covenant on Civil and Political Rights
(ICCPR).
28. Further details regarding the measures in the Bill and their human rights implications
are set out below.
Human rights implications
29. The human rights that are engaged by the Bill are set out in Articles 9, 14 and 17 of
the ICCPR.
Article 9 - freedom from arbitrary detention
30. The Bill engages the right to freedom from arbitrary detention under Article 9(1) of
the ICCPR by creating an offence for which a court may lawfully prescribe a period of
imprisonment for a person found guilty of the offence. The offence for which imprisonment
would be a penalty is bribery of a foreign public official in new section 70.2 of the Criminal
Code. The maximum penalty is 10 years of imprisonment.
31. The penalty is reasonable to achieve the legitimate objective of ensuring that the
courts are able to impose a sentence for the offence of foreign bribery that reflects the
seriousness of the offending. The penalty would only be applied by a court if a person is
convicted of an offence as a result of a fair trial in accordance with the procedures as
established by law. Maximum penalties are set to adequately deter and punish a worst case
offence, including repeat offences, while supporting judicial discretion and independence.
The penalty will only be applied by a court if the prosecution has proved the elements of the
offence beyond reasonable doubt. Further, the penalty will apply only to offences committed
at or after the commencement of the new offence.
Article 14(1) - right to a fair and public hearing
32. Article 14(1) of the ICCPR provides that 'in the determination of any criminal charge
against him, or of his rights and obligations in a suit at law, everyone shall be entitled to a fair
and public hearing by a competent, independent and impartial tribunal established by law'.
33. The DPA scheme does not compromise the right to a fair and public hearing. Where a
person (other than an individual, who cannot seek a DPA) engages with the DPA scheme,
they will do so on an entirely opt-in basis. A person may elect not to utilise the DPA scheme,
in which case the CDPP may exercise its discretion to prosecute the person as per standard
procedures.
34. If a DPA is materially contravened, the CDPP may institute proceedings in relation to
the matters contained in the DPA. The Bill does not seek to limit a person's access to a fair or
public hearing in this context.
Article 14(2) - right to be presumed innocent
35. Article 14(2) of the ICCPR provides that 'everyone charged with a criminal offence
shall have the right to be presumed innocent until proved guilty according to law'. It imposes
on the prosecution the burden of proving a criminal charge and guarantees that no guilt can
be presumed until the charge has been proved beyond reasonable doubt. Offences that contain
7
'reverse burden' provisions may amount to a limitation on the presumption of innocence.
This includes where an 'evidential' or 'legal burden' defence is created by expressing a
matter to be a defence or an exception to the offence. This is because a defendant's failure to
establish an absence of fault (for example, through a mistake of fact defence) or to discharge
a burden of proof may permit their conviction where the elements of the offences are proved
beyond reasonable doubt.
36. Item 7 of Schedule 1 of the Bill extends the existing defence of lawful conduct, which
applies to the foreign bribery offence in section 70.2 of the Criminal Code, to situations
where the conduct relates to bribing an individual standing or nominated as a candidate to be
a foreign public official. For example, the defence would be available to a person who
provides a benefit to a candidate for a political office or a public service position under a law
of a foreign country, if the written law in force in the foreign country permits the provision of
the benefit. Item 7 would provide that the defendant bears the evidential burden of
establishing the defence of lawful conduct.
37. Item 8 of Schedule 1 of the Bill establishes a new offence of failure by a body
corporate to prevent bribery of a foreign public official by an associate. It would also provide
that the new offence will not apply if the body corporate had in place adequate procedures
designed to prevent an associate from committing foreign bribery. The defendant would bear
a legal burden in relation to this matter. The justification for imposing this legal burden on
the body corporate is that it would create a strong positive incentive to encourage
corporations to adopt measures to prevent foreign bribery. The Bill would require the
Minister to publish guidance on the steps that body corporates can take to prevent an
associate from bribing foreign public officials. This offence applies only to bodies corporate
and not to individuals.
38. The DPA scheme in Schedule 2 does not reverse the presumption of innocence.
Entering in a DPA would not require an admission of guilt. The CDPP will be required to
prove its case beyond reasonable doubt in any criminal proceedings instituted in relation to
the matters contained in the DPA.
39. Under the DPA scheme, a party to a DPA would be required to agree to a statement of
facts outlining the scope of the party's likely offending. If the party subsequently materially
contravenes the DPA, this statement of facts will be taken to be agreed facts for the purposes
of section 191 of the Evidence Act 1995 in any criminal proceeding that is subsequently
instituted by the CDPP in relation to the matters in the DPA or any proceeding under the
Proceeds of Crime Act 2002.
40. To the extent that the agreed statement of facts might constitute a limitation on the
right to be presumed innocent, this limitation is fair, reasonable and proportionate. A person's
engagement with the DPA scheme, and subsequent agreement to a statement of facts, would
occur on an entirely voluntary basis. Furthermore, the agreed statement of facts is pivotal to
the integrity of the DPA scheme. It will encourage the person to negotiate a DPA in good
faith (rather than exploiting the scheme to avoid prosecution) by helping to establish a
likelihood of a successful prosecution if the person materially contravenes the DPA.
41. These measures of the Bill are compatible with human rights. To the extent that the
measures may limit Article 14 of the ICCPR, those limitations are reasonable, necessary and
proportionate in light of the objective of strengthening agencies' ability to respond to serious
corporate crime.
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Article 17 - right to privacy
42. Article 17 of the ICCPR provides that no-one shall be subjected to arbitrary or
unlawful interference with their privacy, family, home or correspondence. In order for an
interference with the right to privacy to be permissible, the interference must be authorised by
law, be for a reason consistent with the ICCPR and be reasonable in the particular
circumstances.
43. Schedule 2 of the Bill engages Article 17 of the ICCPR by allowing for the disclosure
of information (including personal information) that is obtained by a Commonwealth entity,
or an official of a Commonwealth entity, as a direct result of the negotiating, entering into, or
administering of a DPA.
44. It is likely that most of the information to which the Bill relates will include details of
corporate criminal behaviour rather than personal information. To this end, the Bill outlines
the specific circumstances within which information obtained as a result of a DPA process
can be shared, being:
with a Commonwealth entity for the purposes of assisting the entity to exercise its
powers, or perform its functions or duties
with a Commonwealth entity or an authority of a State or Territory or a foreign
country for law enforcement purposes, or for the protection of public health, or the
life or safety of an individual or group of individuals, and
with a court or tribunal, authority or person that has the power to require the
answering of questions or the production of documents for the purposes of
proceedings before, or in accordance, with an order of, the court, tribunal, authority or
person.
45. By allowing information obtained as a result of the negotiating, entering into, or
administering of a DPA to be disclosed in the ways specified, the Bill promotes the efficient
enforcement of laws, administration of justice, and business of government. As such, to the
extent that the Bill limits the right to privacy, it is consistent with the ICCPR, is reasonable in
the circumstances, and is proportionate to a legitimate end.
Conclusion
46. The Bill is compatible with human rights. To the extent that it may limit those rights,
the limitations are reasonable, necessary and proportionate in light of the objective of
strengthening agencies' ability to respond to serious corporate crime.
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NOTES ON CLAUSES
Preliminary
Clause 1 - Short title
47. Clause 1 provides for the short title of the Bill to be the Crimes Legislation
Amendment (Combatting Corporate Crime) Act 2019.
Clause 2 - Commencement
48. Clause 2 provides for the commencement of each provision in the Bill, as set out in
the table at clause 2(1).
49. Clause 2(2) specifies that information in column 3 of the table at clause 2(1) is not a
part of the Bill, and information may be inserted in this column, or information in it may be
edited, in any published version of the Bill.
Clause 3 - Schedules
50. Clause 3 provides that legislation that is specified in a Schedule to the Bill is amended
or repealed as set out in the applicable items in the Schedule concerned, and any other item in
a Schedule to the Bill has effect according to its terms.
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Schedule 1 - Amendments relating to foreign bribery
Part 1 - Main amendments
Criminal Code Act 1995
Item 1 - Before section 70.1 of the Criminal Code
52. Item 1 inserts a new heading for Subdivision A -- Definitions. This reflects the
restructuring of Division 70.2 to include subdivisions.
Item 2 -- Section 70.1 of the Criminal Code
53. Item 2 amends section 70.1 to include new definitions for relevant terms in the
Division. The new definitions provide that: 'advantage' means an advantage of any kind and
is not limited to property; 'annual turnover' has the meaning given by new section 70.5C; and
a person is an 'associate' of another person if the first-mentioned person is an officer,
employee, agent, contractor or subsidiary of the other person, is controlled by another person
or performs services for or on behalf of another person.
54. These are definitions of key terms included in the new offences of bribing a foreign
public official (new section 70.2) or failing to prevent bribery of a foreign public official
(new section 70.5A).
55. The definition of 'associate' is intended to provide clarity by reference to the
associate's role or position relative to the body corporate, i.e. an officer, employee, agent,
contractor, subsidiary or controlled entity of the person would be an associate. 'Subsidiary' is
defined within the meaning of Division 6 of the Corporations Act 2001, which provides that a
body corporate is a subsidiary of another body corporate if, and only if:
the other body controls the composition of the first body's board (section 47 of the
Corporations Act provides that, without limiting the circumstances, this control exists
when the body corporate can appoint or remove all, or the majority, of the directors of
the first-mentioned body, or
the other body is in a position to cast, or control the casting of, more than one half of
the maximum number of votes that might be cast at a general meeting of the first
body, or
the other body holds more than one-half of the issued share capital of the first body
(excluding any part of that issued share capital that carries no right to participate
beyond a specified amount in a distribution of either profits or capital), or
the first body is a subsidiary of a subsidiary of the other body.
56. A 'subsidiary' within the meaning of the Corporations Act includes a body corporate
that: (a) is incorporated outside of Australia; and (b) otherwise meets the definition of
'subsidiary' in section 46 of that Act.
57. 'Control' of a body corporate is also defined within the meaning of Division 6 of
Part 1.2 the Corporations Act. Section 50AA of the Corporations Act provides that an entity
controls a second entity if the first entity has the capacity to determine the outcome of
decisions about the second entity's financial and operating policies.
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58. The definition of 'associate' is also intended to have broad application to a person
who provides services for or on behalf of another person. Such a person would not
necessarily need to be an officer, employee, agent, contractor, subsidiary or controlled entity.
Item 3 -- Section 70.1 of the Criminal Code (definitions of 'benefit' and 'business
advantage')
59. Item 3 repeals the existing definitions of 'benefit' and 'business advantage' in
section 70.1.
60. The existing definition of 'benefit' in section 70.1 is repealed as this definition is
already provided in the Dictionary at the end of the Criminal Code.
61. As explained under item 6 below, the new offence of bribing a foreign public official
(new section 70.2) covers bribery to obtain or retain business or a business or personal
advantage. In repealing the definition of 'business advantage' it is intended that both
'business advantage' and 'personal advantage' will take their ordinary meanings. Advantage
is defined in section 70.1 as an advantage of any kind and is not limited to property.
Item 4-- Section 70.1 of the Criminal Code (at the end of the definition of 'foreign
public official')
62. Item 4 amends the definition of 'foreign public official' in section 70.1 to include a
person standing, or nominated, (whether formally or informally) as a candidate to be a
foreign public official covered by any of paragraphs (a) to (k) of the existing definition.
63. This amendment ensures that the foreign bribery offences extend to bribes made to
candidates for public office. Law enforcement experience indicates that individuals or
companies may seek to bribe candidates for public office, with the intent of obtaining an
advantage once the candidate takes office. It is appropriate to criminalise this conduct given
that it equally undermines good governance and free and fair markets.
Item 5 -- After section 70.1 of the Criminal Code
64. Item 5 inserts new Subdivision B -- Bribery of foreign public officials. This reflects
the restructuring of Division 70.2 to include subdivisions.
Item 6 -- Section 70.2 of the Criminal Code
Overview
65. Item 6 repeals the existing foreign bribery offence in section 70.2 and replaces it with
a new offence of bribing a foreign public official. The reason for replacing the existing
offence is to address challenges authorities currently face in investigating and prosecuting the
offence, as articulated in the Government's public consultation paper 'Proposed amendments
to the foreign bribery offence in the Criminal Code Act 1995', released in April 2017.
66. Challenges relating to the existing foreign bribery offence include difficulty proving
the intention elements and the need to show that both the bribe and the business or personal
advantage sought were not legitimately due. In some cases, the threshold of 'not legitimately
due' can present challenges. For example, bribe payments can be concealed as agent fees,
making it difficult to show, beyond a reasonable doubt, that the payments were not
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legitimately due. Further, proving the existing offence can also require reliance on
international legal assistance processes. Reliance on such processes may be required, for
example, to prove that a benefit or advantage was not legitimately due or that a foreign
official was working within their official duties. International legal assistance processes may
take time and/or prove unsuccessful, and the investigation/prosecution may be compromised
as a result.
67. In summary, item 6 changes the existing foreign bribery offence in section 70.2 in the
following ways:
removes the requirement that the foreign official must be influenced in the exercise of
the official's duties
removes the requirement that a benefit and business advantage must be 'not
legitimately due' and replaces it with the concept of 'improperly influencing' a
foreign public official, and
extends the offence to cover bribery to obtain a personal (i.e. non-business)
advantage.
New section 70.2 - Bribing a foreign public official
68. The foreign bribery offence in new section 70.2 provides that a person commits an
offence if the person:
provides, offers, or promises a benefit to another person, or causes the benefit to be
provided, offered or promised to another person (new paragraph 70.2(1)(a)), and
does so with the intention of improperly influencing a foreign public official in order
to obtain or retain business or a business or personal advantage (new
paragraph 70.2(1)(b)).
69. Providing, offering, or promising a benefit to another person or causing the benefit to
be provided, offered or promised to another person under new paragraphs 70.2(1)(a) is
conduct that carries the fault element of intention as defined by new paragraph 70.2(1)(b).
70. New paragraph 70.2(1)(b) provides the relevant intention that applies to the physical
element in new paragraph 70.2(1)(a). Subsection 5.1(2) of the Criminal Code allows for a
specific fault element to be provided for a physical element of an offence. A person will have
the necessary intention if, by providing the benefit etc, they mean to improperly influence a
public official in order to obtain or retain business or a business or personal advantage. To
avoid doubt, this does not require proof that a person actually has been or will be influenced,
only that a person intended that this occur.
71. The existing foreign bribery offence applies only to bribery of foreign public officials
to obtain or retain business or business advantages. The new offence is not limited in this
way. Instead, it applies where the bribe was to obtain or retain business or a business or
personal advantage.
72. Law enforcement experience has shown, in some cases, that foreign bribery can occur
where the advantage sought is personal. These could include instances where a foreign
official is improperly influenced in the bestowal of personal titles or honours or in relation to
the processing of visa or immigration requests.
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73. The term 'personal' is intended to ensure that the provision captures a broad range of
personal advantages, including (but not limited to) the granting of visas or other residency
benefits, and the bestowing of scholarships, personal titles or other honours. The term
'business' refers to trade and commercial transactions, and ensures that the offence covers the
types of business transactions that Australia is required to criminalise as a party to the OECD
Convention on Combating Bribery of Foreign Public Officials in International Business
Transactions.
74. Item 6 ensures that the foreign bribery offence operates as intended by specifying that
the offence applies in the context of both personal and business advantages. Given the
seriousness of the foreign bribery offence and the high penalty it can attract, it is desirable
that its scope is clearly articulated.
75. The amendment is consistent with Recommendation 6 of the Senate Economics
References Committee's 2018 report on Foreign Bribery that 'the foreign bribery offence
apply in circumstances where a bribe of a foreign public official was to obtain or retain a
personal advantage'.
76. Paragraphs 70.2(2)(a) and (c) provide that a person does not need to intend to
improperly influence a particular foreign public official, or actually obtain or retain business
or a business or personal advantage. These paragraphs are consistent with existing
subsection 70.2(1A). New paragraph 70.2(2)(b) further provides that a person does not need
to intend to obtain or retain a particular business or a particular business or personal
advantage. This means the prosecution would not need to prove the particular business or
advantage that is related to the bribery.
77. Subsections 70.2(3) and (4) provide the maximum penalties applicable for the new
offence for individuals (subsection 70.2(3)) and bodies corporate (subsection 70.2(4)). These
penalties are the same as that for the existing foreign bribery offence under existing
subsections 70.2(4) and (5).
78. New paragraph 70.2(4)(c), regarding the relevant period for assessing a body
corporate's annual turnover for the purpose of determining the maximum fine, replicates the
existing approach under paragraph 70.2(5)(c), except for one clarification. The existing
paragraph provides that the relevant period is 12 months ending at the end of the month in
which the body corporate committed the offence. The new paragraph clarifies that the period
could also end at the end of the month in which the body corporate began committing the
offence, which would apply where the offence was committed over a period greater than a
month. This is consistent with similar provisions in the Corporations Act and provides greater
clarity around the calculation of this amount.
New section 70.2A - Improper influence
79. The new offence of foreign bribery is based on the concept of improper influence of a
foreign public official. This term would better characterise the conduct of foreign bribery
than the current term 'not legitimately due'.
80. New section 70.2A provides detail on the new concept of improper influence.
Subsection 70.2A(1) provides that, in a prosecution for the foreign bribery offence, the
determination of whether influence is improper is a matter for the trier of fact.
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81. Subsection 70.2A(2) provides factors to be disregarded in determining whether
influence is improper for the purposes of paragraph 70.2(1)(b). These factors are modelled on
existing subsections 70.2(2) and (3) and include:
the fact that the benefit, or the offer or promise to provide the benefit, may be, or be
perceived to be, customary, necessary or required in the situation
any official tolerance of the benefit, and
if particular business or a particular business or personal advantage is relevant to
proving the matters referred to in paragraph 70.2(1)(b):
o the fact that the value of the business or advantage is insignificant
o any official tolerance of the advantage
o the fact that the advantage may be customary, or perceived to be customary, in
the situation.
82. Subsection 70.2A(3) provides factors which may be considered in determining
whether influence is improper. These factors include:
the recipient or intended recipient of the benefit
the nature of the benefit
how the benefit was provided
whether the value of the benefit is disproportionate to the value of consideration or
purported consideration (if any) for the benefit
whether the benefit, or the offer or promise to provide the benefit, was provided in the
absence of any legal obligation to do so
whether the benefit was provided, or the offer or promise to provide the benefit was
made, dishonestly
whether, and to what extent, the benefit, offer or promise is recorded or documented
if the provision of the benefit, or the offer or promise to provide the benefit, is
recorded or documented:
o the accuracy of the record or documentation, and
o whether the record or documentation is consistent with the ordinary practices
of the person who made the record or documentation
whether there is evidence that due diligence was exercised in relation to the benefit, or
the offer or promise to provide the benefit
whether any of the following conduct is contrary to a written law in the place where it
occurs:
o the provision of the benefit, or the offer or promise to provide the benefit
o the acceptance of the benefit, or
o any conduct directly connected with the provision, offer or promise to provide,
or acceptance of the benefit, and
in relation to particular business or a particular business or personal advantage:
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o whether the business or advantage was awarded on a competitive or non-
commercial basis
o whether there is any demonstrable conflict of interest in the provision of the
business or advantage.
83. Subsection 70.2A(4) provides that the factors listed above do not limit the matters that
can be considered in determining whether influence is improper.
84. The factors are intended to reflect, in a non-exhaustive manner, the conduct of bribery
of a foreign public official. For example, the test of whether the value of the benefit is
disproportionate to the value of consideration or purported consideration (if any) for the
benefit (paragraph 70.2A(3)(d)) could be applied where a bribe is paid through an agent
supported by an agency agreement. Under this example, in assessing improper influence, the
trier of fact could compare the value of the agent's services with the amount paid for those
purported services. Under this paragraph, the trier of fact could consider any disproportion,
but it is intended that a lack of disproportion itself would not be determinative of whether the
influence was improper.
85. As another example, if a benefit provided or offered to a foreign public official may
be of low or insignificant value in Australian dollar terms and of higher value in the location
of the official, the trier of fact could consider the value to the official in determining whether
influence is improper. In this scenario, among other things, the trier of fact may have regard
to the nature of the benefit (paragraph 70.2A(3)(b)) and whether the value of the benefit is
disproportionate to the value of any consideration provided or purported to have been
provided for the benefit (paragraph 70.2A(3)(d)).
86. There are two factors connected to the legality of the conduct: paragraph 70.2A(3)(e)
concerns the absence of any legal obligation to provide a benefit, and paragraph 70.2A(3)(j)
concerns conduct contrary to a written law in the place where it occurs. It is intended that the
existence of either of these particular factors in a matter would likely carry significant weight
in determining that influence is improper, depending on the broader circumstances.
87. The factor in paragraph 70.2A(3)(f) is whether the benefit was provided, or the offer
or promise to provide the benefit was made, dishonestly. Under the amendments set out in
Schedule 3 of the Bill, 'dishonest' will mean 'dishonest according to the standards of
ordinary people'. It is intended that ordinary people in this context would be ordinary people
residing in Australia.
88. The factors in paragraphs 70.2A(3)(g) and (h) refer to matters that are recorded or
documented. It is intended that 'recorded' would cover something that is set down in writing
or other form (whether or not in electronic form) and 'documented' would refer to there
being documentation to support something.
Item 7 - After subsection 70.3(2) of the Criminal Code
89. Item 7 inserts new subsection 70.3(2A). This extends the existing defence of lawful
conduct, which applies to the foreign bribery offence in section 70.2, to situations where the
conduct relates to an individual standing or nominated as a candidate to be a foreign public
official.
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90. Existing section 70.3 sets out the terms of the defence of conduct lawful in the foreign
public official's country. The table in existing subsection 70.3(1) prescribes the source of the
applicable law that will apply to the different classes of foreign public officials. The different
classes are contained in the definition of 'foreign public official' in existing subsection 70.1,
to which item 4 above adds a person standing, or nominated, (whether formally or
informally) as a candidate to be a foreign public official in a position covered by any of the
existing paragraphs under the definition.
91. New subsection 70.3(2A) provides, by reference to the conditions in the table in
existing subsection 70.3(1), a defence where the conduct occurred in relation to a candidate
for the position of foreign public official and a written law in force in the relevant place
permits the provision of the benefit to the relevant foreign public official. For example, the
defence would be available to a person who provides a benefit to a candidate for a political
office or a public service position under a law of a foreign country, if the written law in force
in the foreign country permits the provision of the benefit.
92. Item 7 provides that the defendant bears the burden of adducing evidence that
suggests a reasonable possibility that the matters comprising the defence exist (section 13.3
of the Criminal Code). If the defendant discharges an evidential burden, the prosecution must
disprove those matters beyond reasonable doubt (section 13.1 of the Criminal Code).
93. This offence-specific defence is appropriate because:
The defendant would be in a better position to adduce evidence of the written foreign
law he or she relied on when offering or providing the benefit. The defendant could
readily provide evidence of the existence of the foreign law and their reliance on it to
support their case.
It would be difficult for the prosecution to prove the non-existence of a law in a
foreign jurisdiction. For example, this would require the prosecution to seek evidence
of any written law.
The question of whether the benefit was required or permitted under a foreign
country's written law is not central to the question of culpability for the offence. The
essential elements of the proposed foreign bribery offence are that the defendant
provided, offered or caused to be provided or offered, a benefit to another person with
the intention of improperly influencing a foreign public official in order to obtain an
advantage.
94. Under the current offence, whether the conduct was lawful in the place it occurs is not
an element of the offence. A defendant already bears an evidential burden when seeking to
rely on the defence in section 70.3 for conduct lawful in the foreign public official's country.
New subsection 70.3(2A) would only incrementally extend the existing defence to also apply
to conduct involving candidates for a foreign public office, ensuring consistency across all
categories of foreign public official.
Item 8 -- After section 70.5 of the Criminal Code
95. Item 8 inserts new Subdivision C -- Failure to prevent bribery of foreign public
officials.
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New section 70.5A - Failing to prevent bribery of a foreign public official
96. New section 70.5A of this Subdivision inserts a new offence of failing to prevent
bribery of a foreign public official that can only be committed by a body corporate.
97. Subsection 70.5A(1) provides that a person will commit an offence if:
the person is a body corporate that is a constitutional corporation, incorporated in a
Territory or taken to be registered in a Territory under the Corporations Act, and
an associate of the body corporate:
o commits the offence of foreign bribery against section 70.2, or
o engages in conduct outside Australia that, if engaged in in Australia, would
constitute an offence against section 70.2 (the notional offence), and
the associate does so for the profit or gain of the body corporate.
98. The term 'associate' is defined in the amendments to section 70.1 described above
under item 2. A person is an 'associate' of another person if the first-mentioned person is an
officer, employee, agent, contractor or subsidiary of the other person, is controlled by the
other person, or otherwise performs services for or on behalf of another person.
99. Paragraph 70.5A(1)(b)(ii), covers the situation where an associate engages in conduct
outside Australia that, if engaged in in Australia, would constitute an offence against
section 70.2. It is intended that this paragraph would cover situations where a subsidiary of a
body corporate engages in conduct abroad that would constitute the foreign bribery offence.
100. Conduct that is done for the 'profit or gain' of the body corporate
(paragraph 70.5A(1)(c)) is not defined in the legislation and would be interpreted by
reference to the ordinary meaning of the words. The ordinary meaning of these words,
however, is very broad. 'Gain' would include any sort of benefit or advantage to the body
corporate. The term would cover, for example, situations where a company benefits merely
because it is the beneficial owner of a subsidiary company that commits the foreign bribery
offence.
101. Subsection 70.5A(2) provides that absolute liability applies to certain elements of the
new offence in subsection 70.5A(1), namely, to paragraphs (a) and (c), and the circumstances
contained in subparagraphs (b)(i) and (ii). The fault elements of the underlying conduct by
the associate described in those subparagraphs would still need to be established by the
prosecution.
102. The AGD Framing Guide provides that the application of absolute liability should
only be used in limited circumstances, and where there is adequate justification for doing so.
The Guide provides that applying absolute liability to particular physical elements of an
offence may be justified where requiring proof of fault of the particular element to which
strict or absolute liability applies would undermine deterrence, and there are legitimate
grounds for penalising persons lacking 'fault' in respect of that element. It may also be
justified where the particular element of the offence is a jurisdictional element rather than one
going to the essence of the offence.
103. In this case, applying absolute liability to the above elements of the new offence is
necessary to ensure the effectiveness of the new offence and the enforcement regime. This
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would ensure that the offence operates as intended, where the only way to avoid liability for
the body corporate to avoid liability is by having adequate procedures in place, as explained
further below. This is necessary to overcome challenges in establishing liability of corporate
entities for foreign bribery, and to ensure that companies are not able to avoid possible
liability through wilful blindness. The application of absolute liability to
paragraph 70.5A(1)(a) is necessary as this aspect of the offence is a jurisdictional element. It
is not appropriate to permit for the defence of mistake of fact to apply to the offence elements
in paragraph 70.5A(1)(b). It is sufficient that the fault elements of the underlying conduct by
the associate described in those subparagraphs would still need to be established by the
prosecution.
104. Subsection 70.5A(3) clarifies that the body corporate may be convicted of an offence
against this section even if the associate has not been convicted of an offence against
section 70.2. The prosecution would need to show that the associate committed a foreign
bribery offence against section 70.2 or engaged in the conduct described in new
subparagraph 70.5A(1)(b)(ii), but would not need to show that the associate has been
successfully prosecuted.
105. Subsection 70.5A(4) provides that section 12.6 of the Criminal Code applies in
relation to an offence against subsection (1) as if the reference in section 12.6 to an employee,
agent or officer of a body corporate included any associate of the body corporate. This would
mean that the general principle of 'intervening conduct or event' in section 10.1 of the
Criminal Code would not apply. Section 12.6 provides that a body corporate cannot rely on
section 10.1 (intervening conduct or event) in respect of a physical element of an offence
brought about by another person if the other person is an employee, agent or officer of the
body corporate. Subsection 70.5A(4) extends this to also include any associate of the body
corporate (which could include a subsidiary or a controlled entity of the body corporate).
106. Subsection 70.5A(5) provides that the offence will not apply if the body corporate had
in place adequate procedures designed to prevent:
the commission of the foreign bribery offence against section 70.2 by any associate of
the body corporate, and
any associate of the first person engaging in conduct outside Australia that, if engaged
in in Australia, would constitute an offence against section 70.2.
107. The defendant bears a legal burden in relation to this matter. The justification for
imposing this legal burden on the body corporate is that it would create a strong positive
incentive for corporations to adopt measures to prevent foreign bribery. The standard of proof
the defendant would need to discharge in order to prove the defence is the balance of
probabilities (section 13.5 of the Criminal Code).
108. What constitutes 'adequate procedures' would be determined by the courts on a case
by case basis. It is envisaged that this concept would be scalable - its exact requirements
would depending on circumstances including the size and nature of the body corporate
concerned. As noted below, proposed new section 70.5B also provides that the Minister must
publish guidance on the steps that body corporates can take to prevent an associate from
bribing foreign public officials.
109. Subsection 70.5A(6) provides that the maximum penalty for the new offence of
failing to prevent foreign bribery in subsection 70.5A(1) is the greatest of the following:
19
100,000 penalty units (as at November 2017, the value of one penalty unit is AUD
210. Accordingly, 100,000 penalty units currently amounts to AUD 21 million)
if the court can determine the value of the benefit obtained by the associate, 3 times
that value
if the court cannot determine the value of that benefit, 10% of the annual turnover of
the body corporate for the 12 month period ending at the end of the month in which
the associate committed, or began committing, the offence.
110. Subsection 70.2(8) provides that extended geographical jurisdiction -- category A
applies to an offence against subsection 70.5A(1). This is defined in section 15.1 of the
Criminal Code. It means the offence would apply where, among other situations, the conduct
which constitutes the offence occurs wholly overseas where the offender is a body corporate
incorporated by or under a law of the Commonwealth or of a State or Territory.
111. New section 70.5B provides that the Minister must publish guidance on the steps that
a body corporate can take to prevent an associate from bribing foreign public officials. This is
intended to assist companies in implementing appropriate measures to prevent bribery from
occurring within their organisations.
112. The guidance will be designed to be of general application to corporations of all sizes
and in all sectors. It will be principles-based rather than prescriptive.
113. Small and medium-sized enterprises would not necessarily be expected to put in place
a compliance program of the same size that would be required of a large multi-national
company. Similarly, a corporation with limited exposure to foreign bribery risk would not be
expected to take mitigation measures as extensive as another corporation that has a
significantly greater risk profile.
114. This guidance would not be legislative in character, and as such, would not take the
form of a legislative instrument.
115. Departure from the guidance's suggested procedures would not of itself give rise to a
suggestion that a corporation does not have adequate procedures in place. However,
businesses would need to implement robust and effective steps to prevent foreign bribery in
their circumstances. Companies with effective and well integrated compliance regimes that a
court considers adequate would obtain the benefit of the defence contained in new
section 70.5A(5).
Item 9 -- Before section 70.6 of the Criminal Code
116. Item 9 inserts a new Subdivision D -- Miscellaneous.
117. New section 70.5C includes the details for determining 'annual turnover' for the
purpose of the maximum penalty for the new foreign bribery offence and the offence of
failing to prevent bribery of a foreign public official. Section 70.5C remains unchanged from
existing subsections 70.2(6) and (7), but is now included in a new section to reflect the
introduction of these new offences.
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118. New section 70.5D provides that the question of whether two bodies corporate are
related to each other is to be determined for the purposes of Division 70 in the same way as
for the purposes of the Corporations Act.
Item 10 -- Application of amendments
119. Item 10 provides that the amendments in Part 1 would apply in relation to conduct
engaged in on or after the commencement of this item. The amendments would commence
six months after the amending legislation receives Royal Assent to allow sufficient time for
businesses to make any adjustments for the new provisions.
Part 2 - Other amendments
Director of Public Prosecutions Act 1983
Item 11 - Subsection 17B(1) (table item 5 - column headed 'Provisions')
120. Item 11 amends table item 5 in new subsection 17B(1) of the Director of Public
Prosecutions Act 1983 (DPP Act). This adds section 70.5A (the new offence of failing to
prevent foreign bribery) to the list of offence provisions in relation to which a deferred
prosecution agreement may be entered into. A deferred prosecution agreements scheme
would be introduced pursuant to Schedule 2 below.
Income Tax Assessment Act 1997
Items 12, 13, 14 - Subsections 26-52(2), 26-52 (2A), 26-52 (6) and (7)
121. Items 12, 13 and 14 amend the Income Tax Assessment Act 1997 (the ITAA). The
intention of these amendments is to prohibit a person from claiming a deduction for a loss or
outgoing the person incurs that is a bribe to a foreign public official. This is a continuation of
the current approach of section 26-52 of the ITAA. The amendments revise the relevant
provisions of the ITAA so that the concept of bribery of a foreign public official in that Act is
consistent with the concept that is contained in new section 70.2 of the Criminal Code, as
described under item 6 above.
122. Item 12 repeals the existing definition of a 'bribe to a foreign public official' in
subsection 26-52(2) and substitutes it with a new definition consistent with the concept of
bribery of a foreign public official as set out in new subsection 70.2(2) of the Criminal Code.
In particular, item 12 provides that an amount is a bribe to a foreign public official to the
extent that a person incurs the amount in, or in connection with:
providing, offering, or promising a benefit to another person, or causing the
benefit to be provided, offered or promised to another person (new
paragraph 26.52(2)(a)), and
does so with the intention of improperly influencing a foreign public official in
order to obtain or retain business or a business or personal advantage (new
paragraph 26.52(2)(b)).
123. Item 12 provides that the benefit may be any advantage and is not limited to property.
This is the same definition of benefit used in existing subsection 26-52(2).
21
124. Existing subsection 26-52(2A) provides that, for the purposes of subsection 26-52(2),
when assessing whether an amount is a bribe a decision maker should disregard whether
business, or a business advantage, was actually obtained or retained. Item 13 replaces the
phrase 'a business advantage', with the phrase 'a business or personal advantage', picking up
the language of new paragraph 26-52(2)(b).
125. Item 14 repeals existing subsections 26-52(6) and (7), and substitutes factors to be
disregarded in determining whether influence is improper for the purposes of
paragraph 26-52(2)(b). These factors are the same as in new subsection 70.2A(2) of the
Crimes Act 1914:
the fact that the benefit, or the offer or promise to provide the benefit, may be, or
be perceived to be, customary, necessary or required in the situation
any official tolerance of the benefit, and
if particular business or a particular business or personal advantage is relevant to
determining whether influence is improper:
o the fact that the value of the business or advantage is insignificant
o any official tolerance of the advantage
o the fact that the advantage may be customary, or perceived to be
customary, in the situation.
Item 15 - Application of amendments
126. Item 15 provides that the above amendments to the ITAA would apply to a loss or
outgoing incurred on or after the commencement of Part 1 of this Schedule, meaning the
amendments commence at the same time the new foreign bribery offence in section 70.2 of
the Criminal Code and the other main amendments commence. Although items 12 to 15
commence on the first 1 January, 1 April, 1 July or 1 October to occur after the end of the
period of 6 months beginning on the day the Act receives the Royal Assent (which is the
standard commencement for amendments to tax legislation), they would apply to a loss or
outgoing incurred on or after commencement of Part 1.
Schedule 2 - Amendments relating to deferred prosecution agreements
Part 1 - Main amendments
Director of Public Prosecutions Act 1983
Item 1 - Before section 1
127. Item 1 establishes Part 1 of the DPP Act, entitled 'Part 1 - Preliminary'. This part
includes sections 1 - 5 of the DPP Act.
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Item 2 - Subsection 3(1)
128. Item 2 amends subsection 3(1) of the DPP Act to provide definitions for 'approving
officer', 'Commonwealth entity', 'conduct', 'deferred prosecution agreement', 'DPA', and
'secrecy provision'.
Item 3 - Before section 5
129. Item 3 establishes Part 2 of the DPP Act, entitled 'Part 2 - Office of the Director of
Public Prosecutions'. This Part will include sections 6 - 17 of the DPP Act.
Item 4 - After paragraph 6(1)(fa)
130. Item 4 provides that negotiating, entering into, and administering deferred prosecution
agreements (DPAs) on behalf of the Commonwealth is part of the functions of the
Commonwealth Director of Public Prosecutions (CDPP).
Item 5 - After subsection 9(6F)
131. Item 5 gives the CDPP the power to, on behalf of the Commonwealth, enter into a
DPA and do all things necessary or convenient to be done for or in connection with
negotiating, entering into, or administering, a DPA.
Item 6 - After subsection 11(2)
132. Subsection 11(1) of the DPP Act already allows the CDPP to, by instrument in
writing, give directions or furnish guidelines with respect to the prosecution of offences
against Commonwealth laws to:
the Commissioner of Police of the Australian Federal Police (AFP)
the Australian Government Solicitor, or
any other person who institutes or carries on prosecutions or conducts
investigations in relation to offences against Commonwealth laws.
133. Item 6 clarifies that the CDPP may give directions and furnish guidelines in relation
to the negotiating, entering into, or administering, of DPAs in the way described in
subsection 11(1).
Item 7 - Before section 18
Part 3 of the DPP Act - Deferred prosecution agreement scheme
134. Item 7 introduces Part 3 of the DPP Act, comprising new sections 17A - 17K. Part 3
implements a DPA scheme, and is entitled 'Part 3 - Deferred prosecution agreement
scheme'.
Section 17A - Entering into a DPA
135. New subsection 17A(1) provides the CDPP with the discretion to enter into an
agreement (a DPA) on behalf of the Commonwealth. The subsection provides that DPAs are
not available to individuals. This reflects that the DPA scheme is designed to address serious
corporate crime, rather than criminal offending by natural persons. The subsection further
23
provides that DPAs can only be negotiated to apply with respect to offences as mentioned in
section 17B.
136. Under new subsection 17A(2), if a DPA has been approved in accordance with the
process in section 17D, criminal proceedings must not be instituted in a federal court or in a
court of a State or Territory in relation to the offences specified in the agreement. This
provision ensures that where a DPA is in force, a party to that DPA will not be prosecuted in
relation to the offences specified in the DPA insofar as those offences might be constituted by
the conduct specified in the DPA (including the agreed statement of facts). Item 7 does not in
any way limit the CDPP's discretion or ability to institute criminal proceedings pursuant to
any Commonwealth law in relation to conduct that is not specified in the DPA.
137. Subsection 17A(3) provides exceptions to the rule in subsection 17A(2). Under these
exceptions, the CDPP may prosecute a party to a DPA in relation to the offences specified in
the DPA if:
the CDPP determines that there has been a material contravention of the DPA
('material contravention' being defined by the DPA itself, pursuant to
paragraph 17C(1)(e)), or
if the party to the DPA provided inaccurate, misleading or incomplete information to
a Commonwealth entity in connection with the DPA; and the party knew, or ought to
have known that the information was inaccurate, misleading or incomplete.
138. The exceptions in subsection 17A(3) apply regardless of whether the DPA is in force
at the time the material contravention or provision of inaccurate, misleading, or incomplete
information is detected. As such, if a material contravention that occurred during the period
the DPA was in force is detected many years after the DPA ceased to be in force, criminal
proceedings may be instituted in relation to the offences in the DPA.
Section 17B - Offences to which a DPA may relate
139. A primary purpose of the DPA scheme is to provide an additional tool to
Commonwealth law enforcement and prosecutorial agencies to address serious corporate
crime. As such, subsections 17B(1) and (2) identify a list of serious corporate criminal
offences (the 'primary offences') and, when read with subsection 17A(1), provide that a DPA
must operate with respect to one or more of these offences.
140. Subsection 17B(3) is designed to ensure that a person is not deterred from seeking a
DPA for fear of prosecution for related, less serious offences that do not fall within the scope
of subsections 17B(1) and (2). The subsection provides the CDPP with the discretion to, if
they consider it appropriate, negotiate a single DPA that applies with respect to both of the
following:
one or more of the primary offences listed in subsections 17B(1) and (2), and
one or more additional offences that are likely to arise of out of the same conduct that
constitutes or may constitute the primary offence (a 'secondary offence').
141. A DPA may not be entered into in relation to a secondary offence alone. To ensure
that the scheme is primarily utilised to address serious corporate crime, paragraph 17B(3)(b)
provides that the maximum penalty for the secondary offence to which the DPA relates must
be less than the maximum penalty for the relevant primary offence.
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Section 17C - Content of a DPA
142. New section 17C relates to the content of DPAs. Subsection 17C(1) establishes a list
of terms and features that must be included in all DPAs. The purpose of this provision is to
enhance consistency in the DPA scheme, and therefore provide possible DPA candidates with
a degree of certainty in relation to the types of terms a possible DPA would include. These
terms and features include a statement of facts that outlines the nature of the misconduct to
which the DPA relates, the last day for which the DPA is in force (being the day by which the
person must have fulfilled all of its obligations under the terms of the DPA), and the
requirements to be fulfilled by the person under the DPA.
143. Furthermore, paragraph 17C(1)(e) provides that DPAs must identify the
circumstances which will constitute a material contravention of that particular DPA. Under
subparagraphs 17C(1)(e)(i) and (ii), the DPA must specify that, at a minimum, a material
contravention will be constituted by the contravention of any term that is specified as a
'significant term' of the DPA, and by a pattern or sequence of contraventions of a term or
terms of the DPA that, considered collectively, are significant.
144. Paragraph 17C(1)(f) stipulates that, under a DPA, the party to the DPA must consent
to CDPP instituting a prosecution of the party on indictment in the circumstances described in
subsection 17A(3) without the party having been examined or committed for trial.
145. Subsection 17C(2) provides a non-exhaustive list of terms and features that may be
included in a DPA. The purpose of this provision is to provide possible DPA candidates with
a broad idea of the types of terms that might arise for discussion during DPA negotiations and
might ultimately be included in a DPA. The provision also allows for flexibility during DPA
negotiations, so that each DPA can appropriately reflect the particular facts of the case at
hand. Paragraph 17C(2)(c) provides that the DPA may include any other term that the CDPP
considers appropriate.
146. Subparagraph 17C(2)(a)(iii) provides that a DPA may include a term requiring a
company to consent to any relevant orders under the Proceeds of Crime Act 2002 being
made in relation to an offence specified in the DPA. Depending on the circumstances of the
offending, the DPA could include terms requiring cooperation to ensure the confiscation and
forfeiture of likely benefits, proceeds of crime and/or instruments of crime (within the
meaning of the Proceeds of Crime Act). This could also include agreement not to contest
current or anticipated proceedings under the Proceeds of Crime Act (including proceeds of
crime proceedings initiated against office holders of the company or in relation to specific
items of property).
147. Subsections 17C(3) and (4) refer to the level of financial penalty which should be
included in a DPA. Subsection 17C(3) outlines the factors that the CDPP must consider in
determining an appropriate financial penalty. Under this subsection, the CDPP must consider
the severity of the penalty that may be imposed by a court if the person was convicted of each
offence specified in the DPA. However, the CDPP may also consider that a measurably lower
penalty is appropriate where the party to the DPA demonstrates a high level of cooperation
with the CDPP and other relevant law enforcement agencies during DPA negotiations, and/or
where the party is required to otherwise spend a significant sum of money to comply with
other terms in the DPA.
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148. Under subsection 17C(4) (and despite paragraph 17C(1)(d)), the CDPP may
determine not to include a financial penalty if they are satisfied that there are exceptional
circumstances and that it is not in the interests of justice to include such a penalty. This may
be appropriate in circumstances where, for example, the party to the DPA will nonetheless be
required to make an exceptional sum of payments under the DPA, or where the imposition of
a financial penalty would likely bankrupt the party.
Section 17D - Approval of a DPA
149. Section 17D outlines the process by which a DPA must be approved. This process
imposes legislative thresholds and layers of oversight of the DPA process to ensure that each
DPA adequately addresses the misconduct to which it relates (noting that a party to DPA
negotiations may be rewarded for demonstrating a high level of cooperation with authorities),
and that DPAs are not used as a 'get out of jail free card' for corporations that have engaged
in serious corporate crime.
150. Under subsection 17D(1), the CDPP must refer a DPA that has been agreed by the
parties to an approving officer (as appointed under section 17G) for approval.
Subsection 17D(2) requires the CDPP to, before providing the draft DPA to an approving
officer, be satisfied that there are reasonable grounds to believe that an offence specified in
the DPA has been committed, and that entering into the DPA is in the public interest. Under
subsections 17D(3) and (4), the approving officer must approve the DPA if they are satisfied
that the terms of the DPA are in the interests of justice and are fair, reasonable and
proportionate.
151. If the approving officer is not satisfied of the factors mentioned in subsection 17D(4),
they must not approve the DPA. If this occurs, the parties may elect to continue to negotiate
the DPA's terms, or either party may choose to withdraw from DPA negotiations. Under
subsection 17D(6), the approving officer must give written notice of their decision to either
approve or not approve the DPA to the CDPP.
152. Under subsection 17D(5), the approving officer must assume that the information set
out in the DPA is true and correct. Accordingly, there will be no need for the parties to prove
the facts as presented to the approving officer. This provision will ensure that the process of
approving the DPA is efficient and that the matter of approval is quickly resolved. The facts
identified in the DPA will be the product of careful consideration and investigation by
Commonwealth agencies.
153. Subsections 17D(7) - 17D(9) impose requirements for the publishing of an approved
DPA. These provisions provide that the CDPP must publish an approved DPA on the CDPP's
website within 10 business days after the day notice of an approving officer's decision to
approve a DPA is given. Subsection 17D(8) gives the CDPP the power to not publish the
DPA, or to publish a redacted version of the DPA, if the CDPP considers it appropriate to do
so in the interests of justice. Subsection 17D(9) provides a non-exhaustive list of examples
where the CDPP may decide not to publish the DPA in accordance with subsection 17D(8).
Under subsection 17D(10), if the CDPP has made a decision under subsection 17D(8), the
CDPP may, at a later time, decide to publish the DPA or a redacted version of the DPA if the
CDPP considers it would be in the interests of justice to do so.
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Section 17E - When a DPA is in force
154. Section 17E describes when a DPA is in force, such that parties are required to
comply with the DPA's terms. Subsection 17E(1) provides that a DPA enters into force on
the day after notice of approval of the DPA is given by an approving officer. The
subsection also specifies the circumstances within which a DPA ceases to be in force.
Paragraph 17E(1)(a) provides that the DPA ceases to be in force on the day specified in the
DPA. Under paragraph 17E(1)(b), the DPA would also cease to be in force on the day that
the person is given notice of the initiation of criminal proceedings of a kind mentioned in
subsection 17A(2).
155. Subsection 17E(2) ensures that the DPA is not in force for the period between the day
the person is given notice that criminal proceedings have been instituted and, should the
decision that a material contravention has occurred be successfully challenged in court, the
day that the court declares that the CDPP's determination that a material contravention has
occurred was not validly made. This provision avoids a situation in which the corporation
would be taken to have been obliged to comply with the DPA's terms after the CDPP
institutes proceedings on the basis of a material contravention, at which point the DPA would
appear to have not been in force as a result of paragraph 17E(1)(b).
156. An intended application of subsection 17E(2) is demonstrated by the following
example. The CDPP determines that Company X has materially contravened a DPA, and
institutes criminal proceedings on the basis of this determination. Company X seeks judicial
review of this determination (under the Constitution, section 39B of the Judiciary Act).
Although Company X does not consider that a material contravention has occurred, it stops
complying with its obligations under the DPA because it considers that complying with the
DPA may be contrary to its interests given the imminence of criminal proceedings in relation
to the matters contained in the DPA. The court subsequently determines that the CDPP's
determination that a material contravention occurred was not validly made, such that the
CDPP never had the power to institute proceedings (because a valid determination of material
contravention is required under subsection 17A(3)). The DPA therefore never ceased to be in
force by reason of paragraph 17E(1)(b) (which also requires the CDPP's valid determination
that a material contravention occurred). Subsection 17E(2) would apply, and ensure that
Company X cannot be taken to have been bound by the DPA in the period between the day
the person is given notice that criminal proceedings have been instituted and the day that the
court declared that the CDPP's determination that a material contravention had occurred was
not validly made. As a result, the CDPP cannot institute fresh proceedings on the basis that
the company materially contravened the DPA by not complying with the DPA's terms whilst
judicial review proceedings were on foot.
157. Subsection 17E(3) addresses how a variation to an already approved DPA enters into
force. Subsection 17E(4) provides that if a DPA ceases to be in force (including in the
circumstances described in paragraph 17E(1)(b)), the validity of anything done by a party to
the DPA in accordance with the terms of the DPA is unaffected. The effect of this provision
is that, for example, if the person has made payments in accordance with a term of a DPA,
the person cannot claim that the payment should be compensated or returned to the person as
a result of the DPA ceasing to be in force.
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Section 17F - Varying a DPA
158. Section 17F describes the process through which a DPA may be varied after it has
been approved by an approving officer. The provision also outlines the requirements relating
to the publishing of a DPA as varied. These processes and requirements are consistent with
the equivalent provisions in section 17D.
Section 17G - Appointment of approving officers
159. Section 17G introduces a process for the appointment of approving officers, who are
responsible for approving DPAs under section 17D and approving variations to DPAs under
section 17F. Under subsections 17G(1) and (2), the Minister may appoint a person as an
approving officer for the purposes of the DPA scheme so long as the Minister is satisfied that
the person is a former judicial officer of a federal court or a court of a State or Territory and
the person has the knowledge or experience necessary to properly exercise the powers of an
approving officer. Such knowledge or experience may include an extensive amount of
judicial experience, and/or legal experience in corporate criminal law or corporate
compliance.
160. Subsection 17G(3) provides that an approving officer holds office for the period
specified in the instrument of appointment, and that this period cannot exceed 5 years. There
is no limit on the number of persons who may hold office as an approving officer at any
given point in time. Under subsection 17G(4), the approving officer is to be paid
remuneration as determined by the Minister in writing. Subsection 17G(5) is included to
assist readers by highlighting that a determination as described in subsection 17G(4) is not a
legislative instrument within the meaning of subsection 8(1) of the Legislation Act 2003.
Section 17H - Evidence
161. Section 17H limits the admissibility in proceedings of specific documents that are
likely to be generated or provided to Commonwealth agencies during the course of DPA
negotiations, and/or in compliance with a DPA. This provision is designed to encourage a
person who is negotiating, or considering negotiating, a DPA to engage in full and frank
discussions with the CDPP. To encourage a person to engage openly and honestly in
negotiations, these protections apply regardless of whether the DPA negotiations ultimately
result in a DPA.
162. Subsection 17H(1) restricts the admissibility of specified documents in civil or
criminal proceedings against a person who is or was a party to a DPA or negotiations for a
DPA. These documents are described in paragraphs 17H(1)(a) and (b) as any document that
indicates the person entered into negotiations for a DPA and any document that was created
solely for the purpose of negotiating the DPA. The DPA itself it is exempt from these
categories of documents. Subsection 17H(2) provides examples of the types of documents
that would fall within the scope of paragraphs 17H(1)(a) and (b).
163. Subsections 17H(3)-(5) are intended to create a real likelihood of a successful
prosecution if a party to a DPA engages in the conduct described in subsection 17H(3). The
subsections therefore provide additional incentives for a party to a DPA to enter into DPA
negotiations in good faith and make all possible efforts to comply with the DPA's terms. To
this end, subsection 17H(3) provides exemptions to the rule established by
subsection 17H(1), so that all information obtained through a DPA process can be used
28
against a party to a DPA if the party materially contravenes a DPA, provides false and
misleading information as described in paragraph 17A(3)(b), or gives inconsistent evidence
in another proceeding. Assurance of the likelihood of a successful prosecution is further
achieved by subsection 17H(5). This subsection provides that the agreed statement of facts
(which is a compulsory element of all DPAs) will constitute agreed facts for the purposes of
section 191 of the Evidence Act 1995 in any criminal proceedings instituted in circumstances
mentioned in subsection 17A(3); or in proceedings under the Proceeds of Crime Act that are
instituted after the institution of criminal proceedings in the circumstances mentioned in
subsection 17A(3). The effect of this provision is that, in the proceedings mentioned in
subsection 17H(5), the CDPP would not be required to prove the existence of the facts in the
statement of facts and neither party would be able to adduce evidence to contradict or qualify
an agreed fact unless the court gives leave.
164. Subsection 17H(4) clarifies that section 17H does not affect the admissibility in
evidence of any information or document obtained as an indirect consequence of disclosure
of, or any information contained in, a document mentioned in subsection 17H(1). This
subsection ensures the admissibility of evidence which is brought to the attention of
Commonwealth entities as an indirect result of information disclosed during DPA
negotiations. This provision might, for example, apply where the AFP uses information
disclosed by a person during DPA negotiations to open a new investigation or line of inquiry
and the CDPP seeks to admit the evidence found as a result of that new investigation or
inquiry in relevant proceedings.
Section 17J - Destroying evidence
165. Section 17J(1) creates a new criminal offence. The offence has two physical elements:
(1) the book, document, or thing is relevant to negotiating a DPA or assessing compliance
with a DPA, and (2) the person causes the book, document, or thing to be prevented from
being used in negotiating a DPA, assessing compliance with a DPA, or from being used in
evidence in criminal proceedings of a kind mentioned in subsection 17A(2). The section
does not specify a fault element for the first physical element, and therefore recklessness
applies as the default fault element under subsection 5.6(2) of the Criminal Code.
Subsection 17J(2) provides that the fault element for the second physical element is intention.
166. This provision would apply where, for example, a person destroys or defaces a book,
document or thing with the intention of concealing the extent of the DPA party's misconduct
in DPA negotiations so that the DPA's terms do not adequately reflect the extent of the
party's offending. It would also apply where a person destroys a document that shows that
any person has not complied with its DPA, with the intention of preventing the document
from being used to assess compliance with the DPA.
167. The penalty for an individual convicted of an offence under section 17J is
imprisonment for 5 years or 300 penalty units, or both. The penalty for a body corporate is
5,000 penalty units. The penalty for an individual is consistent with the fine/imprisonment
ratio specified in the AGD Framing Guide, being that five penalty units should equate to one
month of imprisonment.
168. The AGD Framing Guide also contemplates that, as per subsection 4B(3) of the
Crimes Act, the maximum penalty that can be imposed on a body corporate is five times
higher than the penalty that can be imposed on a natural person. Section 17J deviates from
this principle by imposing a higher penalty for corporations. This is justified on the basis that
29
a higher penalty reflects the significance of a situation in which a corporation might
deliberately exploit the DPA process to manipulate the CDPP in relation to the extent of its
misconduct and therefore achieve disproportionately favourable DPA terms. This would
undermine a key purpose of the DPA scheme, being to enhance the extent to which
corporations are held to account for their misconduct. Furthermore, corporations involved in
a DPA are likely to be well-resourced, and therefore a higher maximum penalty is required to
ensure that the provision acts as an effective deterrent and punishment. On this basis, the
provision is consistent with the principle in the AGD Framing Guide which specifies that
each offence should have a 'maximum penalty that is adequate to deter and punish a worst
case offence' (page 37).
Section 17K - Disclosure of information
169. Section 17K ensures that, where a Commonwealth entity, or an official of a
Commonwealth entity, obtains information as a result of the negotiating, entering into, or
administering of a DPA, this information can be disclosed in such a way that promotes the
efficient enforcement of laws, administration of justice, and business of government agencies.
170. Subsection 17K(1) provides that the section applies if a person is, or was, an official
of a Commonwealth entity and obtains information of a kind mentioned in subsection (2).
Subsection 17K(2) identifies the type of information that falls within the scope of
section 17K. This information is any information that is obtained as a direct result of the
negotiating, entering into, or administering of a DPA. This is intended to cover all
information that is obtained during DPA negotiations (noting that these negotiations formally
occur between the corporation and the CDPP as per the CDPP's powers and functions to
negotiate DPAs in items 4 and 5), as well as all information that is provided by the
corporation to relevant Commonwealth agencies while the DPA is in force.
171. Subsection 17K(3) provides that the person (as described in subsection 17K(1)) may
disclose the information to:
an authority of a Commonwealth entity for the purposes of assisting the entity to
exercise its powers, or perform its functions or duties
an authority of a Commonwealth entity or an authority of a State or Territory or a
foreign country for law enforcement purposes, or for the protection of public health,
or the life or safety of an individual or group of individuals, and
a court or tribunal, authority or person that has the power to require the answering of
questions or the production of documents for the purposes of proceedings before, or in
accordance, with an order of, the court, tribunal, authority or person.
172. Subsection 17K(5) provides that section 17K applies despite any other secrecy
provision, whether enacted before, at, or after the commencement of section 17K.
Section 17L - Disclosure and use of certain information
173. Section 17L ensures that the permitted use and disclosure of information in the
context of a DPA process correlates with the permitted use and disclosure of information for
the purposes of a prosecution.
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174. It is appropriate that the permitted use and disclosure of information in the context of
a DPA process correlates with the permitted use and disclosure of information for the
purposes of a prosecution. This is because the CDPP's decision to offer, or not to offer, a
DPA constitutes an extension of the decision to prosecute. A DPA is, by nature, an alternative
to prosecution, and at any point whilst negotiating a DPA the CDPP may decide that
prosecution is a more appropriate mechanism for addressing the misconduct. Furthermore, if
a corporation materially contravenes a DPA, the CDPP may decide to prosecute the
corporation for the offences specified in the DPA.
175. Section 17L allows information to be disclosed to a relevant 'person or authority' for
the purposes of negotiating, entering into or administering a DPA. This will ensure that
information can be disclosed to the same persons and authorities (including the CDPP) for
purposes related to a DPA as would be the case if the corporation in question was instead
being prosecuted for the relevant offences. Section 17L allows both the disclosure and use of
relevant information for DPA-related purposes.
176. Section 17L applies to any provision of a Commonwealth law that authorises the
disclosure of information 'in relation to a prosecution'. It effectively deems these provisions
to have the effect of permitting the disclosure of information for certain DPA purposes. For
example, section 17L would ensure that information can be shared for the purposes of a DPA
where it could otherwise be shared, for example, for the purposes of:
'prosecuting an offence' under paragraphs 23YO(3)(f), and 3ZQU(1)(a) and (k) of the
Crimes Act
the making of a decision whether or not to begin a relevant proceeding under
section 67(1) of the Telecommunications (Interception and Access) Act 1979
'enforc[ing] the criminal law' under subparagraphs 181A(3)(b)(ii), 181B(3)(b)(ii),
182(2)(a)(iii) and 182B(a)(iv) of the Telecommunications (Interception and Access)
Act 1979
deciding 'whether or not to bring a prosecution for a relevant offence' under
paragraph 45(5)(b) of the Surveillance Devices Act 2004, or
'assisting in the ... .prosecution of an offence against [a] law' under item 2 of the table
at subsection 266A(2) of the Proceeds of Crime Act.
177. Section 17L also applies with respect to relevant information-sharing provisions in
Commonwealth legislation, regardless of whether those provisions were enacted before, at, or
after the commencement of section 17L. This will ensure that, where new statutory powers
and corresponding information-sharing provisions are developed, the link between
prosecutorial information-sharing arrangements and DPA-related arrangements is preserved.
178. Section 17L is not intended to in any way limit the scope of existing abilities agencies
have to share and use information or preclude information from being shared and used in the
context of an actual or possible DPA. For example, the Bill does not in any way restrict the
powers agencies currently have to share information for the purposes of an investigation,
even if such information might ultimately be used to contribute to a DPA process pursuant to
section 17L.
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Part 4 of the DPP Act
179. Item 7 also identifies the start of the new 'Part 4' of the DPP Act, which starts
immediately before section 18. As a result of item 8, part 4 consists of sections 18 - 30 of the
DPP Act. Part 4 is entitled 'Part 4 - Director, Associate Director and staff'.
Item 8 - Before section 31
180. Item 8 establishes a new Part 5 of the DPP Act, entitled 'Part 5 - Miscellaneous'. This
part comprises sections 31 - 34 of the DPP Act.
Item 9 - Subsection 31(1)
Item 10 - After subsection 31(1A)
181. Items 9 and 10 collectively allow the CDPP to, in writing, delegate his or her
functions and powers related to the DPA scheme to a member of the staff of the office who is
a member of the senior executive service and a legal practitioner. Under
subsection 31(1AAA), the CDPP can delegate any of his or her powers under Part 3 except
for the powers and functions under subsections 17B(3), 17C(4), 17D(8), and 17F(7). The
effect of these exemptions is that the CDPP must not delegate, but must personally execute:
the decision to enter into a DPA with respect to one or more of the secondary offences
listed in section 17B(3)
the decision under subsection 17C(4) that a DPA need not include a financial penalty
on the basis where the CDPP is satisfied that there are exceptional circumstances and
it is not in the interests of justice to include such a penalty
the decision under subsection 17D(8) not to publish a DPA or to publish a version of
the DPA that does not disclose the name of the person or any other material the CDPP
considers should not be disclosed, and
the decision under subsection 17F(7) to not publish the DPA as varied or to publish a
version that does not disclose the name of the person or any other material that the
CDPP considers should not be disclosed.
182. The decisions described in subsections 17B(3), 17C(4), and 17D(8) are decisions of
significant gravity with respect to ensuring that the DPA scheme is primarily used to address
serious corporate crime, and to ensuring the transparency of, and public confidence in, the
scheme. As such, it is appropriate that only the CDPP is empowered to make these decisions.
Item 11 - Application provision
183. Item 11 ensures that a DPA can be entered into with respect to an offence mentioned
in section 17B regardless of whether the conduct that may constitute that offence occurred
before, on, or after the commencement of the Bill.
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Part 2 - Consequential amendments to the tax law
A New Tax System (Goods and Services Tax) Act 1999
Item 12 - After paragraph 69-5(3)(e)
184. Item 12 is a consequential amendment to the A New Tax System (Goods and Services
Tax) Act 1999 to ensure that a party to a DPA cannot claim input tax credits for a loss or
outgoing incurred under a term of a DPA.
Income Tax Assessment Act 1997
Item 13 - Section 12-5 (after table item headed 'debt interests')
Item 14 - After section 26-5
185. Items 13 and 14 are consequential amendments to the ITAA to ensure that any loss or
outgoing incurred by a corporation under a term of a DPA is not deductible under the ITAA.
Item 15 - Application provision
186. Item 15 provides that items 13 and 14 apply in relation to the income year in which
Part 1 of Schedule 2 commences and later income years. The item also provides that item 12
applies in relation to the tax period in which Part 1 of this Schedule commences and later tax
periods.
Part 3 - Other consequential amendments
Administrative Decisions (Judicial Review) Act 1977
Item 16 - After paragraph (xa) of Schedule 1
187. Item 16 amends Schedule 1 to the Administrative Decisions (Judicial Review) Act
1977 (ADJR Act) to provide that the ADJR Act does not apply to decisions under Part 3 of
the DPP Act. As such, judicial review under the ADJR Act will not be available for decisions
including:
the CDPP's decision to enter into a DPA (section 17A)
an approving officer's decision to approve or not approve a DPA (section 17D), or a
variation to a DPA (section 17F)
the CDPP's decision not to publish a DPA (section 17D) or a variation to a DPA
(section 17F), and
the CDPP's decision that he or she is satisfied that there has been a material
contravention of the DPA (subsection 17A(3)).
188. The exemption to the ADJR Act in item 16 is supported by strong policy
justifications. The exemption of DPA-related decisions from ADJR Act review is consistent
with existing policy that decisions to prosecute are exempt from ADJR Act review. Indeed,
the DPA scheme represents a new dimension to prosecutorial decision-making, in that
33
prosecutors will consider whether a DPA would be an appropriate alternative to prosecution
in appropriate cases. Throughout DPA negotiations, the CDPP will consider whether it would
be more appropriate to prosecute the corporation, rather than to offer a DPA.
189. Paragraph (xa) of Schedule 1 of the ADJR Act exempts 'decisions to prosecute
persons for any offence against a law of the Commonwealth, a State or Territory' from ADJR
Act review. The Administrative Review Council (ARC) considered this exemption in its
2012 report, Federal Judicial Review in Australia, and considered that this exemption should
be retained. The ARC noted that this exemption 'is justified by the potential disruptive effect
on criminal proceedings' (page 227) and by 'the desirability of not allowing delays in
criminal proceedings' (page 228).
190. Allowing for ADJR Act review of DPA-related decisions could give rise to some of
the concerns raised by the ARC in the context of the decision to prosecute. Namely, allowing
for ADJR Act review could cause a disruptive effect on prosecutorial decision-making by
causing delays in DPA decision-making and therefore creating uncertainty in relation to the
availability and content of a DPA, and in relation to whether prosecution would be a more
efficient way of addressing the misconduct. On this basis, it is appropriate that decisions
made pursuant to the DPA scheme are exempt from ADJR Act review.
191. The exemption in item 16 is further justified on the basis that common law judicial
review (under section 75(v) of the Constitution and section 39B of the Judiciary Act)
represents a much more efficient review option for decisions under the scheme, particularly
with respect to the CDPP's decision that he or she is satisfied that there has been a material
contravention of the DPA. It is expected that the offences specified in section 17B would
ordinarily be prosecuted in the relevant State or Territory Court, given that the Federal Court
does not have general jurisdiction over criminal prosecutions under Commonwealth laws (see
section 39B(1A)(c) of the Judiciary Act). By virtue of section 39B of the Judiciary Act, a
matter concerning common law judicial review of this decision would be determined by the
same court that would determine the corporation's guilt for the offences contained in the
DPA. By contrast, review under the ADJR Act would generally be considered by the Federal
Court or the Federal Circuit Court. This could lead to significant delays and disruption in
circumstances where the determination of criminal guilt for the matters contained in the DPA
fall within the jurisdiction of a State or Territory Supreme Court.
192. Item 16 is further justified by the voluntary nature of a party's participation in the
DPA scheme, and the availability of traditional law enforcement mechanisms as an
alternative to the DPA process. The scheme is designed to provide corporations with a more
desirable outcome than what would be achieved if the corporation was prosecuted for the
offences specified in the DPA, and therefore to incentivise self-reporting of serious corporate
crime. A potential DPA candidate will be able to consider whether the absence of ADJR Act
review would adversely impact its interests to the point that the scheme no longer represents
a desirable alternative to a criminal investigation and prosecution. In such a circumstance, the
corporation could determine not to seek a DPA.
Crimes Act 1914
Item 17 - After paragraph 16A(2)(fa)
193. Item 17 amends subsection 16A(2) of the Crimes Act so that, in determining an
appropriate sentence for offences that were the subject of a DPA that was materially
34
contravened, a court must consider the fact that a person entered into a DPA in relation to the
offence and the extent to which the person complied, or failed to comply, with the terms of
the DPA. This provision allows a court to impose a sentence that reflects the extent to which,
if at all, the corporation maliciously exploited the DPA process to avoid prosecution. The
provision also allows a court to consider the extent to which a corporation has complied with
the DPA's terms and to make sure this is accounted for in the sentence imposed, if
appropriate.
Item 18 - Application provision
194. Item 18 provides that items 16 and 17 apply in relation to conduct occurring before,
on, or after the commencement of Part 3 of the Bill.
Schedule 3 - Amendments relating to dishonesty definitions in the Criminal Code
Criminal Code Act 1995
Item 1 - Subsections 73.9(3) and 92A.1(2) of the Criminal Code
195. Item 1 repeals the existing definitions of 'dishonest' in subsections 73.9(3) and
92A.1(2).
196. These definitions are being repealed as a new definition of 'dishonest' will be inserted
into the Dictionary of the Criminal Code.
Item 2 - Sections 130.3 and 470.2 of the Criminal Code
197. Item 2 repeals the existing definitions of 'dishonest' in sections 130.3 and 470.2.
198. These definitions are being repealed as a new definition of 'dishonest' will be inserted
into the Dictionary of the Criminal Code.
Item 3 - Section 474.1 of the Criminal Code
199. Item 3 repeals the existing definition of 'dishonest' at section 474.1 and substitutes
this with new section 474.1. New section 474.1 provides that in a prosecution for an offence
against Subdivision A of Division 474, the determination of dishonesty is a matter for the
trier of fact. New section 474.1 is identical to existing subsection 474.1(2).
Item 4 - Subsection 480.1(1) of the Criminal Code (definition of 'dishonest')
200. Item 4 repeals the existing definition of 'dishonest' in subsection 480.1(1).
201. This definition is repealed as a new definition of 'dishonest' will be inserted into the
Dictionary of the Criminal Code.
Item 5 - Section 480.2 of the Criminal Code
202. Item 5 repeals the existing definition of 'dishonest' at section 480.2. New
section 480.2 provides that in a prosecution for an offence against Part 10.8 of the Criminal
Code, the determination of dishonesty is a matter for the trier of fact. New section 480.2 is
identical to existing subsection 480.2(2).
35
Item 6 - Dictionary of the Criminal Code
203. Item 6 inserts a definition of 'dishonest' into the Dictionary of the Criminal Code.
'Dishonest' is defined as 'dishonest according to the standards of ordinary people'. This will
align the Criminal Code's definition of 'dishonest' with the single-limb objective test for
dishonesty endorsed by Australia's High Court in Peters v The Queen (1998) 192 CLR 493
(Peters).
204. In Peters, the High Court adopted a new test to determine dishonesty. The new test
requires the defendant's knowledge, belief or intent to have been dishonest according to the
standards of ordinary, decent people. Under the test adopted in Peters, there is no
requirement to also prove that the defendant was aware that their knowledge, belief or intent
was dishonest in this sense. The new definition in item 6 reflects this jurisprudence.
205. The new definition of 'dishonest' is not intended to impliedly affect the meaning of
'honest' or 'honestly' when those expressions are used in the Criminal Code within their
ordinary meanings.
206. The amended definition will apply to offences in the Criminal Code and not to
Commonwealth offences more generally, unless those offences explicitly pick up the
Criminal Code definition of 'dishonest'. For example, the offence in s 58AG of the Federal
Court of Australia Act 1976 ('bribery of jurors or potential jurors') picks up the Criminal
Code definition of 'dishonest'. It is intended that the definition of 'dishonest' will apply to
this offence.
Item 7 - Application provision
207. Item 7 provides that the amendments made by Schedule 3 apply in relation to the
commission of an offence for which dishonesty is an element, if the conduct constituting the
commission of that offence occurs wholly on or after the commencement of item 7.
Therefore, where a relevant offence involves ongoing criminal conduct that begins and
continues before and after the above amendments have commenced, the new test will not
apply and the existing definition will apply.
36