Reform of Australia’s anti-foreign bribery and corruption regulation continues to come thick and fast. To date in 2018, Senate Committees have reported on the current Bills for enhancing whistleblower protections and foreign bribery offences, including a deferred prosecution agreement scheme.
The proposed new ASX Corporate Governance Principles and Recommendations will also cover anti-bribery and corruption and whistleblower policies. In this article, we discuss what can be expected from these changes and how they will impact upon corporations.
On 20 April 2018, the Senate Legal and Constitutional Affairs Legislation Committee released its report on Australia’s proposed foreign bribery legislation, the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017 (Cth) (Foreign Bribery Bill).
If enacted, the Foreign Bribery Bill will:
The Attorney-General will publish guidance to assist companies to develop adequate procedures to prevent foreign bribery.
The Foreign Bribery Bill will also implement a federal Deferred Prosecution Agreement regime. This will enable the Commonwealth Director of Public Prosecutions to negotiate an agreement with a corporation which has engaged in serious corporate crime to comply with a range of specified conditions. It will not extend to individuals.
The Senate Committee recommended that the Foreign Bribery Bill be passed, and made some additional recommendations in relation to corporate stakeholder consultation and guidance. These recommendations were that:
allowing corporate stakeholders a four-week period for comment.
As we have discussed previously, late last year the Federal Government introduced the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 (Cth) (Whistleblowing Bill) into federal Parliament. The Whistleblowing Bill is now before the Senate for consideration, and, essentially:
On 22 March 2018, the Senate Economics Committee published its report on the Whistleblowing Bill. The Committee noted that many of the submissions highlighted the difference between the Whistleblowing Bill and the recommendations of the prior Parliamentary Joint Committee inquiry into whistleblowing protections (covered here).
The key differences highlighted by the Committee were as follows:
Whilst the Senate Committee was cognisant of the fact that the Whistleblowing Bill did not include all of the recommendations of the prior Parliamentary Joint Committee, it was satisfied that the Bill was a move in the right direction and recommended that it be passed, subject to the following recommendations:
If enacted, the Whistleblower Bill is to take effect on 1 July 2018, and will provide that public corporations must ensure they have adequate whistleblower policies in place by 1 January 2019 (for large proprietary companies, the deadline is December 2019).
With respect to the Foreign Bribery Bill, the new offence of failure of a body corporate to prevent foreign bribery by an associate will come into effect six months from the date the legislation receives Royal Assent.
As noted above, the Attorney-General will release guidance on ‘adequate procedures’. If the Senate Committee’s recommendations are taken on board, this guidance may also include guidance on adequate whistleblower policies.
On 2 May 2018, the ASX Corporate Governance Council announced it would be consulting on proposals to update and issue a fourth edition of its Corporate Governance Principles and Recommendations. Two areas the Council announced it would focus on include anti-bribery/corruption policies and whistleblower policies.
The current consultation draft provides for the following additions in relation to anti-bribery or whistleblower policies:
The current draft of the new ASX Corporate Governance Principles goes significantly further than the Whistleblower Bill in terms of the breadth of concerns which may be disclosed by a whistleblower, with the reference to concerns that an entity is not acting ‘ethically or in a socially responsible manner’. The Whistleblower Bill covers whistleblowing disclosures relating to breaches of law, misconduct by officers/employees of the entity, and the improper state of affairs caused by these individuals.
One of the core principles in the current ASX Corporate Governance Principles is that a listed entity ‘should act ethically and responsibly’. This wording has been amended in the proposed draft, to provide that a listed entity ‘should instil and continually reinforce a culture across the organisation of acting lawfully, ethically and in a socially responsible manner’. If this wording is included in the final version of the new ASX Corporate Governance Principles, it is likely that listed entities will be held to a higher standard in terms of their anti-bribery/corruption and whistleblowing policies and procedures.
These principles will also mandate a system of upward reporting, as each of the whistleblower and bribery policies must ‘ensure that the board is informed of any material concerns raised under that policy that call into question the culture of the organisation. The bribery policy also imposes an audit obligation.
It is currently envisaged that the new Principles will be published in early 2019 and will come into effect on 1 July 2019. The ASX is consulting on the draft Principles, with submissions open until 27 July 2018.
With the respective Senate Committees recommending the passing of both the Foreign Bribery and Whistleblowing Bills, and the ASX Council’s current review into its Corporate Governance Principles, it is clear that corporates will need to ensure they have robust anti-bribery and whistleblowing policies in the near future.
While we can anticipate guidance on adequate anti-bribery policies from the Attorney-General, it is not yet clear whether the Government will provide guidance on whistleblowing policies before 1 January 2019, which is the implementation date for companies under the current Bill.
 See the Senate Committee’s Report at: https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Legal_and_Constitutional_Affairs/CombattingCrime/Report
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