According to the guidance published on the implementation of the Crimes Legislation Amendment (Combatting Foreign Bribery) Act 2024, a corporation will have committed an offence if an associate commits bribery for the “profit or gain” of the corporation, irrespective of whether or not it had actual knowledge of, authorised, or were otherwise involved in, the associate’s conduct (see Hogan Lovells alert Companies liable for failing to prevent bribery: key amendments to Australia’s foreign bribery regime).
If however, a corporation can establish that it had “adequate procedures” in place to prevent the committing of foreign bribery, then the corporation will have a complete defence available to it.
The guidance provides six key principles setting out steps corporations can take to ensure that their anti-bribery controls are “adequate”.
Six principles for “adequate procedures”
These are:
Fostering a control environment
Corporations are expected to establish a control environment that is proportionate to the risk of foreign bribery they face. This includes implementing policies and procedures that are effective and appropriate in relation to the company's industry, geographic reach and size. The higher the risk that a corporation faces, the more stringent the controls should be.
Top-level management responsibility
Top-level management are expected to provide leadership, ensure resources for compliance and foster a culture of integrity. They should actively oversee and review compliance methods and be involved in the communication of anti-bribery policies to employees and third parties.
Risk assessment
Corporations should conduct comprehensive evaluations of their bribery risks, considering factors such as the sectors and countries they operate in and the nature of their business. This assessment should be documented and regularly updated to reflect any changes in the business environment.
Communication and training
Effective communication and training are important in ensuring that all employees and associates understand the corporation’s anti-bribery procedures and policies. In order to ensure effective continuous awareness, training should be ongoing and tailored the specific risks faced by different parts of the business.
Reporting mechanisms and whistleblower protections
Confidential, secure and accessible reporting mechanisms for suspected instances of bribery should be in place. Whistleblower protections must be complied with and companies should foster a culture where employers feel comfortable that they won’t be retaliated against if they report concerns.
Monitoring and review
Companies should continuously monitor and regularly review their anti-bribery compliance programme. The guidance recommends periodic audits and feedback mechanisms as well as updates to the program in order to respond to any changes in the business and to ensure its continued relevance and effectiveness.
What it means for your business
While the above principals provide a roadmap for companies when assessing whether their anti-compliance program is adequate, it should be remembered that ultimately, what will be considered to be “adequate procedures” for the purposes of the Act will be determined on a case-by-case basis. This means that it is critical that businesses not only implement robust controls but that they also maintain comprehensive documentation of their compliance efforts.
Proportionality is critical; what will be considered to be “adequate procedures” will vary according to individual circumstances and the associated risk of foreign bribery. This makes it imperative that companies consider their own specific risk profiles and develop anti-bribery controls tailored to their own experience.
With the imminent introduction of the failure to prevent foreign bribery offence, companies operating in or from Australia should immediately review their current compliance programmes against the published guidance and assess whether it aligns with the six outlined principles.
If not, companies should make the necessary changes to ensure that its anti-corruption procedures are “adequate” to prevent the risk of foreign bribery.
