On Friday 15 November, 2019 the Australian Law Reform Commission (ALRC) released a discussion paper on corporate criminal responsibility (Discussion Paper). The ALRC invited submissions from stakeholders on 23 proposals and 11 questions relating to the reform of Australia's corporate criminal law regime.
The various proposals and questions address a number of topics,
· the principled division between criminal offences and civil penalty provisions;
· the method for attributing criminal liability to corporations;
· individual liability for corporate offences;
· deferred prosecution agreements;
· penalties and the sentencing process;
· illegal phoenix activity; and
· the implications of the transnational nature of business and extraterritorial offences.
Although over the years there have been a number of discrete reviews into corporate behaviour and regulation, the Discussion Paper, available here, represents the first comprehensive review of Australia's corporate criminal responsibility regime since the enactment of the Criminal Code Act 1995 (Cth).
The review, which is in the process of being carried out by the ALRC, has drawn on the experiences of several other jurisdictions to assess how Australia can reconceptualise, rebalance and recalibrate corporate criminal responsibility at a first principles level. This comparative, building block approach is encouraging and suggests the possibility for substantive change to the Australian regulatory regime.
The ALRC's preliminary assessment is that there is an over-proliferation of criminal offences which has created significant regulatory burdens. It also found that inconsistent approaches are adopted across the regulatory regime with regard to things such as strict and absolute liability offences, and the identification of offences intended to apply to corporations. The ALRC has further emphasised that there is a lack of a principled rationale for distinguishing between conduct subject to a civil penalty versus that which is subject to a criminal offence.
At this foundational level, the ALRC have proposed establishing a new model of regulating unlawful conduct by corporations that rationalises the system. The model divides the conduct into three categories within which the other proposals relating to attribution of liability, penalties and sentencing sit. The categories are:
· criminal offences;
· civil penalty proceeding provisions; and
· civil penalty notice provisions.
In conjunction with these new categories, the ALRC has questioned whether there are too many methods of attributing criminal liability to corporations and is considering whether one method would suffice for all offences.
Also interesting is that deferred prosecution agreements (DPAs) are back in the conversation. Some may recall that a bill to introduce a DPA scheme was on the Senate floor for over a year. That bill lapsed when the general election was called earlier this year. In some quarters this was met with relief due to suggestions that the proposed model required further refinement. The Discussion Paper provides another opportunity for interested parties to submit their views on whether, and how best, to implement an enforcement tool that is being utilised with greater regularity and effectiveness in other jurisdictions across the world.
The Discussion Paper represents yet another indication (if it were still needed) of the ever-increasing importance of corporate governance and corporate social responsibility. It is an area which the government is taking seriously, as demonstrated by the recently enacted Modern Slavery Act 2018 (Cth) and the whistleblower reforms passed in the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth). It is an area that businesses should take very seriously.
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