This article was written by Monique Carroll and Jessica Bounds.
Australia’s regulatory landscape is constantly changing and companies must stay ahead of the curve. In the anti-bribery and corruption space, a large number of legislative changes have been proposed which, if introduced, will significantly increase the level of vigilance required by companies.
These proposed changes include:
Changes to the Criminal Code aimed at increasing the range of conduct caught, and the ease with which prosecutions can be successfully brought, via the introduction of a new ‘failure to prevent bribery’ offence. This would make companies liable for bribery committed not only by their employees and/or agents, but by their ‘associates’ where the company receives a direct or indirect benefit. Importantly, ‘associate’ is defined broadly to include off shore subsidiaries, contractors and service providers.
A number of other proposed laws aimed at achieving better investigatory and enforcement outcomes, including enhancements to and expansion of the whistleblower framework and a Deferred Prosecution Scheme which would reward companies for self-reporting.
A reporting requirement similar to the UK’s Modern Slavery Act, which would require Australian companies to publicly disclose what they are doing to eradicate modern slavery in their supply chains.
So how can your company stay ahead of the curve in this ever changing landscape?
The primary focus is to avoid any compliance issues arising and then if they do, to be able to evaluate them quickly so that an opportunity to achieve a better regulatory enforcement outcome is not lost.
Here are four practical tips to stay ahead:
A tailored and reliable compliance programme directed to a company’s associates and suppliers (as the case may be). You need to understand your company’s supply chain and what your ‘associates’ are doing at quite a granular level. Many compliance issues arise as a result of a failure to reliably implement well drafted policies. You need to ensure that your policies are actually being implemented.
Robust due diligence capabilities and procedures that are industry specific. Make sure that you understand the compliance issues in your specific industry and jurisdictions – don’t assume that the way you do business around the world will be accepted and legal in every jurisdiction.
Investigation nouse. You need to be able to ascertain key facts quickly to identify whether an offence has occurred so that you can consider whether a Deferred Prosecution Agreement (depending on the jurisdiction) or self-reporting scheme is appropriate prior to a formal investigation being commenced by the authorities. There is a tendency for service providers to get bogged down in a myriad of documents and other evidence which results in internal investigations taking a long time. King & Wood Mallesons is in the process of finalising an internal guide to streamline and fast track these investigations whilst maintaining legal professional privilege.
A Crisis Management Plan that considers all relevant jurisdictions. Once the regulators have visited your premises and a formal investigation has begun, the scope to improve outcomes by self-reporting will be drastically limited. In some jurisdictions, by this stage guilt may be presumed and the information and employees you need to ascertain basic facts have been detained. A cross-jurisdictional Crisis Management Plan to ascertain the facts to the greatest extent possible, negotiate with regulators, make any public disclosures and address implications in other jurisdictions, will make a valuable impact on mitigating negative outcomes from a regulatory investigation.