Australia ignored OECD over failure to punish foreign bribery, report finds
Australia has taken “no steps” to act on OECD warnings about its failure to properly enforce and adequately punish the bribing of foreign officials, a new report says.
A Transparency International report on foreign bribery released on Tuesday found Australia’s enforcement system “remain inadequate and prosecutions remain low”, despite prior concerns expressed by the OECD.
The report found that Australia commenced 14 foreign bribery investigations in the three years from 2016 to 2019, initiated three court cases and concluded another three.
The cases taken to court included the prosecution of foreign aid contractor Sinclair Knight Merz, a nowmerged company which is fighting allegations it paid a series of bribes to secure work across south-east Asia.
Guardian Australia has previously revealed that Sinclair Knight Merz continued to win contracts with the Australian government even after officials learned of serious allegations about the firm’s conduct in south-east Asia.
The case raised broader questions about the government’s efforts to tackle foreign bribery by Australian firms operating in developing nations.
Late last year, the OECD expressed similar concerns about the continued low level of foreign bribery enforcement and found the sanctions imposed in the small number of cases taken to court were “remarkably low”.
The OECD raised serious doubts as to whether Australia’s enforcement regime provided a sufficient deterrent.
In its report on Tuesday, Transparency International said “no steps have been taken to address the OECD [Working Group on Bribery’s] criticisms”.
The OECD also criticised legal barriers in Australia that stymied international cooperation on foreign bribery and the lack of formal guidance to government agencies on banning companies from government work if they were found to have bribed foreign officials.
Transparency International said no action had been taken to address those concerns either.
The global corruption watchdog said the punishments for foreign bribery remained remarkably low and that Australia was yet to establish a central register of beneficial ownership – a key transparency measure in addressing corporate criminality.
“There are no central registers of beneficial ownership of companies or trusts in place, despite a previous Australian government commitment to introduce one,” the report said.
Earlier this year, the Senate’s legal and constitutional affairs committee recommended changes to improve the tools available to law enforcement and prosecutors, including to simplify the threshold for proving a foreign bribery offence and introducing a new offence of failing to prevent foreign bribery by an associate. The Australian federal police has also received additional funding to combat foreign bribery.
Transparency International Australia chief executive Serena Lillywhite said it was clear the nation’s laws were not adequate in stopping foreign bribery.
‘Tackling foreign bribery is hard work and made harder by weak laws that have not kept pace with the scale and complexity of the problem,” she said.
The report recommends Australia begin publishing statistics on foreign
bribery investigations and case outcomes, set up beneficial ownership registers, pass legislation simplifying the offence of foreign bribery, and introduce a debarment regime to ban companies from Australian government contracts if they are found to have bribed foreign officials.
The OECD’s latest follow-up report on Australia’s foreign bribery efforts found it had fully implemented six recommendations, partially implemented three recommendations, and failed to implement four recommendations.
It noted Australia’s efforts to improve the detection of foreign bribery, including through the introduction of new private sector whistleblower laws.
It also praised increased resourcing for foreign bribery investigations.
“On the other hand, the working group is concerned about the continued low level of foreign bribery enforcement in Australia given the size of Australia’s economy and the highrisk regions and sectors in which its companies operate,” the report said. “In total, since the entry into force of Australia’s foreign bribery legislation 20 years ago, two corporate entities and six individuals have been sanctioned in two cases.”