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Mining and exploration companies are, like their counterparts in the oil and gas and defence industries, constantly having to deal with all manner of governments across the globe and this means that the risk of being exposed to a bribery charge is higher than it is for most other Australians.
Under the Commonwealth Criminal Code Act, the offence of bribing a public official can land you in prison for up to 10 years or slug you with a fine of up to $1M, and the company a person works for could be fined up to $11M or 3 times the value of the benefit, or 10 percent of the company's turnover in a period of 12 months. The time is measured from 12 months before the offence was committed
The prosecution does not have to prove that any business or business advantage was obtained or retained and it is not a defence that the local custom demanded a bribe.
There are a series of defences available to an individual or corporation and they can be summed up in these two points:
So what is a 'benefit'? It "includes any advantage and is not limited to property," the Code rather unhelpfully provides. There is a similarly sweeping definition of "business advantage" which is defined as "an advantage in the conduct of business." There is little doubt that if an Australian company's joint venture partner receives an advantage through a bribe payment then this will be caught by the definition.
Who is a "foreign public official"? In addition to the garden variety public servant or MP, or local government operative or judge, it can include officials of the UN or other international organisations like the World Bank or intra-continental groups, or someone who is an authorised intermediary of the official.
What is a facilitation payment? These are the one major exception to the bribery laws in Australia for companies and those working for them in foreign jurisdictions. A person is not guilty of a bribery offence if the value of the benefit obtained was of a minor nature, the person making the payment was doing so to expedite or secure the performance of a routine government action of a minor nature, and the person making the payment made a record of the conduct as soon as practicable after the payment was made and has kept that record. A 'routine government action' is described as being for example, processing work permits, giving a licence for someone to work on the country, providing police protection or actions facilitating access to telecommunications, transport or cargo. It does not cover actions taken in awarding or encouraging new business, allowing existing business to continue, or actions taken about the terms of new business.
The facilitation payments defence is a fraught one for companies. As Ross Buckley and Mark Danielson noted in 2008; "The benefit, under Australian law, is to be of a minor nature. Is that to be assessed relative to the size and wealth of the payer, or the recipient? Part of this confusion may have arisen because the section 70 .4 is headed "Defence -- facilitation payments" but the language of the section speaks of a 'benefit'. As the language of the section governs, presumably the focus should be on the value to the recipient of the benefit. However, this doesn't resolve the issue. Is a payment of $1,000 minor because it is made to a senior, wealthy foreign government official, and would it be not minor, and thus a bribe, if made to a junior, underpaid foreign government official?"
Recent publicity in the Fairfax media given to alleged bribery by Australian currency officials and mining giants Rio and BHP Billiton are no doubt ensuring that the Australian Federal Police will give investigations of alleged bribery a much higher priority. The penalties are now severe and mining and exploration companies need to take advice in this area of the law and ensure their systems are robust enough to ensure they are not caught by these laws.
Seeking criminal law advice is an important part of the preventative strategy.
The author of this article, Greg Barns, is a barrister and a member of the Australian Defence Lawyers Alliance.
If you suspect that you may be under investigation, or if you have been charged with an offence, it is vital to get competent legal advice as early as possible. Our lawyers are highly specialised in corporate crime and will be able to guide you through the process while dealing with the various authorities related to your matter.