The Challenge of Corporate Law Enforcement in Australia
The University of Queensland - T.C. Beirne School of Law
Australian Journal of Corporate Law, Vol. 23, No. 3
University of Queensland TC Beirne School of Law Research Paper No. 09-03
The introduction on 24 July 2009 of the long-awaited amendments to the Trade Practices Act 1974 (Cth) criminalising serious cartel conduct focuses attention on the important role of the criminal justice system to deal with cases of serious wrongdoing. In 1993, major reforms were made to the law relating to enforcement of the statutory duties of company officers by the introduction of the civil penalty regime found in Pt 9.4B of the Corporations Act 2001 (Cth). These reforms arose from recommendations of the Senate Standing Committee on Legal and Constitutional Affairs (the ‘Cooney Committee’) and implemented what has become known as 'strategic regulation theory'. This theory provides insights on how regulatory compliance can be achieved most effectively, contending that sanctions in the enforcement pyramid should escalate as contraventions of the law become more serious and that criminal liability should apply only for continued non-compliance or for serious breaches of the law. By following this approach, the hope was that ASIC could more effectively cope with corporate misconduct. This article discusses strategic regulation theory to explore, firstly, its capacity to guide ASIC to fulfil its regulatory obligations, and, secondly, the desirability of that approach. It argues that it is not pyramidal enforcement that is inadequate, but ASIC’s perceived failure to use criminal sanctions in cases of serious corporate misconduct, and contends that this threatens to undermine its reputation as an effective regulator.
Number of Pages in PDF File: 40
Keywords: corporate law enforcement, civil penalty sanctions, pyramidal enforcement, responsive regulation, criminal law in corporate crime control
Date posted: October 24, 2009