Second Reading Speech: Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023

I rise in support of the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023. Through this bill, Labor has finally and begrudgingly moved to address a serious issue that the coalition had been pursuing for years. But the government has done too little too late. It has produced an incomplete solution that ignores the way that the prosecution of foreign bribery can be significantly enhanced by allowing deferred prosecution agreements. We will support this bill because we are committed to opposing foreign bribery. We will move amendments to add a deferred prosecution scheme because doing so makes the enforcement of foreign bribery offences significantly more effective.

Foreign bribery is a serious criminal offence. It is bad for business, it hurts us economically and it damages our international reputation. The coalition has been fighting foreign bribery for decades. That is why the coalition introduced the first foreign bribery offences into the Criminal Code in 1999. That is why, under the leadership of John Howard, Australia ratified the OECD anti-bribery convention. That is why we introduced these measures—I say 'we' introduced these measures because, although this is a government bill, the Attorney-General has frankly admitted that they are almost an exact copy of measures the coalition introduced in 2017 and then reintroduced in the last parliament. Labor has been copying the coalition's homework. And why not? It's good policy.

As we said to the parliament when these changes were first included in the coalition's Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019:

The opaque and sophisticated nature of corporate crime can make it difficult to identify and easy to conceal through complicated structures and transactions. Investigations into corporate misconduct can be hampered by the need to process large amounts of complex data, including evidence that may be held overseas. Court proceedings can be protracted, expensive, and involve well-resourced corporate defendants.

The measures in the Bill seek to address these challenges and remove undue impediments to the successful investigation and prosecution of foreign bribery cases.

We are pleased that Labor has come to the party, but the wisdom of the measures in this bill is not the whole story. These measures should have become law in the last parliament, but the reality is that Labor did everything it could to delay action on foreign bribery.

You need only look at how they approached this issue at the last public hearings when these measures were examined by a committee in the last parliament. The very first question from Labor was whether the bill should be deferred. The second question expressed surprise and concern that the provisions of the bill, including the schedule which set out the very provisions we're looking at now, hadn't been changed following the banking royal commission. The third question asked why the legislation was necessary at all. The fourth suggested that 'the whole matter', being legislation to address corporate crime, should be put on hold. Having made clear that it did not want the matter to progress, Labor's dissenting report then recommended the removal of key parts of the bill. Labor was not alone. The Greens also made it clear that they did not support the legislation proceeding at that time. They also wanted the bill deferred.

It's worth putting on the record Labor's history of opposition, delay and obstruction when it comes to foreign bribery. It's worth doing because it illustrates a recurring problem with this government and with this Attorney-General. The measures in the Crimes Legislation Amendment (Combatting Foreign Bribery) Bill 2023 are lifted almost directly from the coalition's Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019 introduced in the last parliament. They were a good idea then and they're a good idea now. But in 2020, when given the opportunity to support measures that are clearly in Australia's national interest, Labor decided it would prefer to delay because the policy came from the coalition. Labor was not prepared to put Australia's national interest ahead of its own tricky political gains. Now that Labor has finally come to the party, it's done so too late and with a weaker solution.

This bill is weaker than the coalition proposals it is based on. That is because the foreign bribery measures in this bill would work so much more effectively if they were part of a package which included deferred prosecution agreements. The international consensus is that these agreements are an essential tool in the prosecution of foreign bribery. This is what we recognised when in government, when we coupled foreign bribery amendments with a deferred prosecution regime in the bill introduced in the last parliament. Disappointingly, Labor convinced itself that the scheme must be a bad idea because it came from the coalition, so they have cut deferred prosecution agreements from this bill.

It's worth spending a little bit of time explaining what a deferred prosecution agreement is and why it is so important to the prosecution of foreign bribery offences. A deferred prosecution agreement allows a prosecuting body to negotiate conditions with a defendant in exchange for the deferral of the prosecution, potentially indefinitely. These agreements often involve paying a significant fine and making changes to the way business is done. If the conditions are not met, the prosecution can be re-enlivened.

Deferred prosecution agreements are used widely in other jurisdictions for corporate offences, such as foreign bribery and false accounting. These crimes are notoriously difficult to prosecute. They require intensive investigation. They involve paper trails that cross jurisdictional boundaries. The volume of documents and data can be immense. Proceedings can be protracted and expensive. Defendants are often well resourced and, on top of this, there is the inherent difficulty of proving in a court of law that a corporate entity had the requisite state of mind to commit a crime. This means that when prosecuting these crimes, scarce investigative and prosecutorial resources are tied up in protracted and uncertain litigation.

This risk and expense is what Labor is saying Australians will have to accept. Rather than deploying our resources to achieve the greatest possible good for the community, they want the Australian government to commit to a course of action that is expensive and difficult. Deferred prosecution agreements offer an obvious solution. They allow the punitive element of justice to be satisfied.

Under a deferred prosecution agreement, prosecutors will typically secure significant penalties, sometimes involving fines amounting to billions of dollars. They serve corrective purposes. Deferred prosecution agreements can drive changes to corporate behaviour through measures like enhanced compliance programs and ongoing monitoring, with a view to ensuring the offending cannot happen again. And they can assist in the prevention and deterrence of crimes—for example, through measures requiring ongoing cooperation in prosecuting individuals who are responsible. Everything that you'd achieve in a successful criminal prosecution—punishment, prevention and deterrence—can be achieved through a deferred prosecution agreement.

When it comes to foreign bribery, it seems that these are the benefits Labor does not want Australians to have. By deleting the provisions to establish deferred prosecution agreements from this bill, the Labor party is effectively saying, 'Rather than achieving similar results at a fraction of the cost and risk, we want our finite investigative resources tied up for years.' The Australian Labor Party is effectively saying, 'We do not want Australia to share in international schemes such as the deferred prosecution agreement that saw Airbus pay around US$3.9 billion in global penalties for foreign bribery that was shared amongst multiple jurisdictions.'

Deferred prosecution agreements are the cornerstone of foreign bribery prosecutions in countries such as the United States and the United Kingdom, because they offer clear benefits to multiple stakeholders. They incentivise self-reporting. It's not hard to imagine how. You can easily imagine how a corporate head office might become aware of corruption at middle-management level and seek to cooperate with authorities to clean its house. This was the experience in the United Kingdom with the ICBC Standard Bank case. The use of deferred prosecution agreements can also limit collateral impacts where a corporation has engaged in serious and ongoing wrongdoing.

In cases where the corporate conduct is so egregious that the financial sanctions would put the company out of business, innocent people often suffer. Pensioners, employees and others, including manufacturers, customers and suppliers, may all be harmed. The experience in the United Kingdom is that, in these cases, deferred prosecution agreements can strike a balance, securing penalties but limiting the second-order harm inflicted on others. The experience in other jurisdictions in evidence received before this parliament is that deferred prosecution agreements lead to an increase in prosecutions and increased fines. They allow a result to be achieved much more quickly, and they are subject to overriding safeguards. For example, under the coalition's proposal, before a deferred prosecution agreement could be executed, a former judge would need to be satisfied that the terms of the agreement were fair, reasonable, proportionate and in the interest of justice.

The Attorney-General made it clear that this bill is meant to enhance implementation of the OECD Anti-Bribery Convention. But, in 2021, the OECD Council expressly recommended that efforts to stamp out foreign bribery should encompass the use of 'non-trial resolutions' to improve the prosecution rates for foreign bribery. In the words of the OECD Council:

Non-trial resolutions refer to mechanisms developed and used to resolve matters without a full court or administrative proceeding, based on a negotiated agreement with a natural or legal person and a prosecuting or other authority.

In short, the governing body responsible for the convention says that foreign bribery measures should be accompanied by mechanisms like DPA schemes. It is, therefore, not entirely surprising that a wide range of stakeholders have expressed support for the use of deferred prosecution agreement schemes. In the inquiry into this bill, parties as diverse as Allens Linklaters, the well-known law firm; the Law Council of Australia; Transparency International Australia and the Uniting Church Synod of Victoria and Tasmania all made submissions in support of a deferred prosecution agreement scheme. Even Austrade, a government agency, called for measures to encourage self-reporting and cooperation.

Let us compare that to what the Attorney-General and the Labor Party have had to say in defence of this bill. In his second reading speech, the Attorney-General told the parliament:

The purpose of a deferred prosecution scheme is to strike a balance between encouraging companies to self-report serious offending and holding companies to account for serious corporate crime. However, given that there is universal agreement that the existing foreign bribery offences in the Criminal Code are grossly inadequate, it is premature to entertain the introduction of a deferred prosecution scheme.

The introduction of such a scheme should only be entertained after the measures in this bill have been enacted and given time to work.

Maybe the Attorney-General simply feels Australians should wait a few more years. In practice, that is what giving foreign bribery offences 'time to work' actually means, as the Attorney-General would know full well.

When the coalition last introduced these proposed changes in the form of a bill, the relevant coalition parliamentarians explained that the experience across the OECD has been that foreign bribery cases take an average of 7.3 years to be concluded. Even with the improvements in this bill, we can only conclude that the Attorney-General effectively wants to wait until the next parliament or even the one after before 'entertaining' a deferred prosecution agreement scheme. Or perhaps, despite the overwhelming evidence to the contrary, he is genuinely persuaded by the silly rhetoric of Labor senators who spoke about 'two-tiered justice' in the last parliament. Regardless of the Attorney-General's motivations, he is missing a clear opportunity now to enhance Australia's enforcement of foreign bribery offences committed around the world.

I observe, therefore, in conclusion, that the coalition will support the measures in this bill. We are glad that Labor has introduced this bill. It is coalition policy. We support it. But we will also be moving amendments in the Senate. We will seek to improve this bill by adding to it the deferred prosecution agreement scheme that was coupled with these measures the last time a bill substantially, in these terms, was introduced. We will also include a statutory review in our amendments, with a view to being able to, after an appropriate period, consider whether the scheme is working as intended. The statutory review will also provide an opportunity to consider whether there is a case for broader corporate crime measures. These might include the changes we proposed the last time a bill substantially, in these terms, was introduced, with a view to ensuring that, when prosecuting a corporate entity, the term 'dishonesty' means the same thing in both the Criminal Code and the Corporations Act. I conclude by, again, extending on behalf of the coalition an invitation to the government to reconsider its opposition to deferred prosecution agreements.

I commend this bill to the House.