Written by Andrew Fraser
June 24, 2016
Companies could avoid criminal convictions for fraud, bribery and money-laundering under options being considered by the Federal Government.
The Minister for Justice, Michael Keenan, has issued a public consultation paper for a possible Australian scheme of deferred prosecution agreements (DPAs), as a way of dealing with serious corporate crime by encouraging greater self-reporting by companies.
Under a DPA scheme, a company that has committed serious corporate crime could be invited by prosecutors to negotiate.
This would typically require it to cooperate with any investigation, pay a financial penalty and implement a program to improve future compliance with the law.
The very important other side of the coin is that prosecution of the company would be deferred, pending compliance and – upon fulfilment of the terms of the DPA – the prosecution would be discontinued.
The financial penalty already imposed would reflect both the company’s criminal responsibility and its level of cooperation with the investigation.
Among the questions the Government wants submissions to explore are:
DPAs operate in both the United States, since the early 2000s, and the United Kingdom, since 2014. In the US they originate from prosecutorial discretion but in the UK they are subject to ongoing judicial scrutiny through two judicial hearings to determine if the DPA is in the interests of justice and to ensure its terms are fair, reasonable and proportionate. If a court approves a UK DPA, it will publish a declaration to that effect together with the DPA.
The Australian consultation paper comes as the Senate Economics Committee is inquiring into foreign bribery and white-collar crime, with reports due in July 2016. The committee is specifically considering “measures to encourage self-reporting including, but not limited to, civil resolutions, settlements, negotiations, plea bargains, enforceable undertakings and deferred prosecution agreements.”
The consultation paper notes the present difficulties in acting against corporate crime.
“Under the current model, investigating agencies [the Australian Federal Police, Australian Securities and Investment Commission and Australian Consumer and Competition Commission] must develop a comprehensive brief of evidence to provide to the Commonwealth Director of Public Prosecutions before it can consider whether it is appropriate to commence proceedings,” the paper says. “Compiling such briefs is often a difficult task, as the evidence of corporate misconduct can be harder to identify and access compared to evidence of physical crimes.
“Identifying corporate wrong-doing often depends on companies cooperating or whistleblowers coming forward, but companies [at present] have little incentive to self-report.”