A 'Failure to Prevent' Offence for Corporations in Australia

Abstract

Australia has introduced a new offence that applies where corporations fail to prevent foreign bribery. The offence is controversial given that it reverses the onus of proof. Under the new offence, a corporation will be criminally liable, without the prosecution needing to establish fault by the corporation, where an associate of the corporation has committed bribery of a foreign public official for the profit or gain of the corporation. This liability can be avoided if a corporation establishes that it had 'adequate procedures' in place to prevent the commission of the offence. It was proposed that the legislation would allow for deferred prosecution agreements but this was not contained in the final version of legislation. The authors evaluate the new offence, including the justifications advanced to support it, and consider whether this approach to enforcement should extend beyond foreign bribery. The authors also discuss several specific issues relating to the new offence: what is meant by the offence being one of absolute liability, the meaning of 'associate' of a corporation, the defence of 'adequate procedures' to prevent foreign bribery, and the absence of deferred prosecution agreements from the final version of the legislation.