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Australia: Law Commission Report Recommends Reforming Law on Corporate Criminal Responsibility

(Sept. 22, 2020) On August 31, 2020, a report by the Australian Law Reform Commission (ALRC) titled Corporate Criminal Responsibility (Report) was submitted for consideration in the Australian Parliament. The Report contains a series of 20 recommendations aimed at improving Australia’s law regarding corporate criminal responsibility, including with respect to the types of offenses in the law, corporate attribution, sentencing, individual liability mechanisms, and offenses that might arise in transnational business. (Report pp. 13-18.)

The ALRC’s examination of these issues was the “first comprehensive review of Australia’s corporate criminal responsibility regime following the enactment of the Criminal Code [Criminal Code Act 1995 (Cth)] 25 years ago,” although “there have been various reviews addressing aspects of corporate behaviour and regulation (including corporate criminality and misconduct) over the past three decades, both in Australia and internationally.” (Report p. 29.) In addition to considering these previous inquiries, the ALRC

considered developments in corporate criminal law in comparable jurisdictions such as the US, Canada, the UK, and New Zealand. In particular, the ALRC has focused on the development of corporate ‘failure to prevent’ offences in the UK with respect to foreign bribery and, more recently, tax evasion. The ALRC has also had regard, in particular, to the evolution of corporate vicarious liability for criminal offences in the US. (Report p. 30.)

As summarized by the international law firm Allens, the Report includes recommendations aimed at

  • reducing the overproliferation, incoherence and lack of principle in corporate criminal offences at the federal level;
  • introducing a single method for attributing criminal liability to corporations across all Commonwealth legislation;
  • creating a new ‘system of conduct’ offence, which would criminalise repeated contraventions of prescribed civil regulatory provisions; and
  • enhancing the range of penalties and sentencing options for courts with respect to corporate criminal offences, beyond traditional monetary penalties.

An article published in Lawyers Weekly noted that human rights and legal organizations had welcomed the proposals in the Report, including the recommendation that “the Australian government introduce a “failure to prevent” offence for serious transnational human rights offences by companies such as forced labour and trafficking.” However, the Law Council of Australia urged the Parliament to take a cautious approach to reforms, particularly with respect to “recommendations that would make a corporate accused guilty if any officer, employee, or agent of the corporation committed an offence, while acting within the actual or apparent scope of their authority.”

The Commonwealth Attorney-General, Chris Porter, “thanked the ALRC for its work and said the Government would now carefully consider each of the recommendations with a view to seeking opportunities for future law reform.” He also referred to two recent developments related to the investigation and prosecution of corporate crime: the introduction of the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019 (Cth) in December 2019, which introduces ”a new corporate offence for failure to prevent the bribery of a foreign public official by an associate”; and the passage of the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth), which “strengthened and expanded the protections for corporate sector whistleblowers who report corporate misconduct, and introduced a requirement for public, large proprietary companies and registrable superannuation entities to have a whistleblower policy.”