Working in Partnership Commonwealth, State, Territory and Local Governments 20. Working in Partnership Civil Society and the Private Sector 21

Transcription

1 Discussion Paper The Commonwealth s approach to Anti-Corruption

2 Table of Contents Introduction 3 Background 4 Have Your Say 6 Representative Democracy 9 Multi-Agency Model 12 Strong, Modern Legislative Regime and Guidelines 16 Working in Partnership Commonwealth, State, Territory and Local Governments 20 Working in Partnership Civil Society and the Private Sector 21 Effective International Engagement 23 D i s c u s s i o n P a p e r 1

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4 Introduction Corruption is a corrosive global phenomenon that has a wide range of devastating impacts. It undermines democracy and the rule of law; discourages investment and distorts markets; diverts resources from important services like schools, hospitals and roads; and provides a breeding ground for organised crime and terrorism. In combating corruption, the Australian Government seeks to adopt a cooperative leadership role internationally, regionally and domestically. At the international level, Australia is a party to both the United Nations Convention against Corruption (UNCAC) and Organisation for Economic Co-operation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. Australia is a key member of the G20 Anti-Corruption Working Group, having participated in the negotiation and development of the G20 Anti-Corruption Action Plan. Australia is also an active member of the Asia-Pacific Economic Cooperation (APEC) Anti-Corruption Working Group and the OECD Working Group on Bribery in International Business Transactions. At the regional level, Australia is committed to working bilaterally with partner governments to support their own efforts against corruption. Effective governance is one of the five key strategic goals of the Australian Government s aid program. Australia provides around A$1 billion each year to assist partner countries to strengthen their governance and anti corruption systems. While Australia has a strong record of domestic action to prevent and expose corruption in both the public and private sectors, the government is conscious that we must not be complacent. In order to ensure Australia continues to be a leader in anti-corruption activities, the Australian Government announced the development of a National Anti-Corruption Plan in The plan will present the Commonwealth s approach to anti-corruption. In doing this, the plan will outline the comprehensive measures that are already in place across the Commonwealth to combat corruption as part of Australia s multi-agency approach to corruption and identify national priorities in this field. The plan will also examine whether the Commonwealth s arrangements are adequate to combat existing and emerging corruption threats and align with international best practice. The plan will reflect the result of an extensive public consultation process and cooperation across all levels of government. The National Anti-Corruption Plan will ensure that the Commonwealth is well positioned to address emerging corruption risks and that anti-corruption initiatives are well coordinated and targeted into the future. D i s c u s s i o n P a p e r 3

5 1. BACKGROUND In September 2011, the Australian Government announced its intention to develop and implement Australia s first National Anti-Corruption Plan. A key objective of the plan is to strengthen Australia s existing governance arrangements by developing a Commonwealth policy on anti-corruption. The plan brings all relevant Commonwealth agencies together under a cohesive framework and strengthens the government s capacity to identify and address corruption risks. Australia has a strong record of global, regional and domestic action to prevent and expose corrupt activity. It was again ranked as the eighth least corrupt nation in the world in the recent Transparency International Corruption Perceptions Index. Recognising the need to ensure better coordination of Australia s anti-corruption efforts and to effectively address emerging corruption risks, the Australian Government decided to develop a National Anti-Corruption Plan. The plan not only draws together the significant anti-corruption initiatives and arrangements already in place within Australia, it recognises that efforts to combat corruption must be shared between all levels of government, the private sector and civil society. What is the purpose of the National Anti-Corruption Plan? Around the world corruption continues to have a serious and harmful impact on society and individuals lives. The recent upheavals in the Middle East and North Africa demonstrate the tragic and powerful role corruption plays in political instability and violence. While Australia has a strong record of successfully tackling corruption, there are instances of corrupt conduct in both the public and private sectors. The primary purpose of the National Anti-Corruption Plan is to develop a cohesive framework to coordinate and guide anti-corruption activities in Australia. The plan will be structured in three parts: 1. a comprehensive outline of existing Commonwealth arrangements to combat corruption; 2. the results of a risk analysis of current and emerging corruption risks; and 3. a framework to ensure the plan is able to effectively address these risks into the future. The plan will comprehensively outline the existing multi-jurisdictional approach to anti-corruption. In Australia, a number of different agencies have specific responsibilities for tackling corruption in different levels of government, and in relation to specific types of corruption. For example, many states and territories have independent anti-corruption bodies or are considering their establishment. 4 D i s c u s s i o n P a p e r

6 At the Commonwealth level, a number of agencies or office holders have specific roles in relation to corruption. For example, the Australian Commission for Law Enforcement Integrity provides independent assurance to government about the integrity of the Australian Federal Police, the Australian Customs and Border Protection Service and the Australian Crime Commission. The Australian Public Service Commissioner is responsible for promoting the Australian Public Service (APS) Values and Code of Conduct and evaluating the extent to which agencies uphold the APS Values and the adequacy of compliance with the Code of Conduct. Among other things, the Code of Conduct states that agency heads and APS employees must not use their employment improperly for personal gain. The plan will also examine the Commonwealth s current anti-corruption arrangements and assess their adequacy in light of existing and emerging corruption risks. This assessment of corruption risks will be informed by public submissions and risk-profiling activities currently being undertaken. This evaluation will result in the development of an action plan with proposals to ensure the Commonwealth can effectively tackle corruption risks in the future. The National Anti-Corruption Plan also meets a number of other important objectives, including: improving Australia s compliance with UNCAC and assisting with the review currently underway of Australia s compliance with the Convention; providing guidance to government stakeholders and members of the public on Australia s approach to anti-corruption, including the roles and responsibilities of relevant agencies, and mechanisms for coordination across sectors; identifying national priorities in the fight against corruption; and addressing corruption risks identified in the Commonwealth Organised Crime Strategic Framework, and other relevant government reports such as those produced by the Australian Crime Commission and the Auditor-General. D i s c u s s i o n P a p e r 5

7 2. HAVE YOUR SAY The government is committed to extensive public consultation on the development of the National Anti-Corruption Plan. Corruption can harm individual lives in a number of ways, and we encourage all interested stakeholders to take the opportunity to provide input into this important document. The public consultation process officially commenced at an event held on 9 December 2011, to mark International Anti-Corruption Day. Details of the public consultation process and speeches from the day can be found at We are particularly interested in community views on the following specific questions: In the context of the Commonwealth s multi-agency approach to anti-corruption, could policy coordination and leadership be improved? If so how? What are the most important corruption threats to Commonwealth interests? To what extent is the Commonwealth vulnerable to those threats? Are risk mitigation strategies adequate? If not, how could they be improved? Are there ways in which the Commonwealth could enhance communication and information sharing with stakeholders, including civil society? Is there anything else about Commonwealth anti-corruption policies, programs or organisational arrangements you would like to discuss? Public submissions close 20 April Submissions should be ed to anti-corruptionsection@ag.gov.au or mailed to: Anti-Corruption Section International Crime Policy and Engagement Branch Attorney-General s Department 3-5 National Circuit BARTON ACT 2600 Further information on the public consultation process can be found at 6 D i s c u s s i o n P a p e r

8 What is corruption? While definitions of corruption abound, a commonly agreed definition is the misuse of entrusted power for private gain. It can take many forms and vary depending on local culture and context. For these reasons, the primary international instrument in this field, the UNCAC, does not offer an agreed international definition. Corruption could be viewed as one end of a continuum of other undesirable behaviours, including maladministration and improper conduct. Identifying maladministration and improper behaviour is important as these types of behaviour may indicate an increased risk of corruption, or may lead to the development of a corrupt culture. At the other end of the continuum is the highest standard of ethical behaviour. The table below is indicative of how particular types of behaviour might be categorised but it is not intended to be definitive. Highest Standards of Ethical Behaviour Acting with honesty Managing resources appropriately Using powers responsibly Explaining reasons for decisions Striving to do things in the best possible way Maladministration Improper Behaviour Corruption Managing badly Inefficiency Bad judgement and decisions Incompetence Lack of due process Inappropriate personal behaviour (e.g. harassment) Misuse of government systems Misuse of government resources (could also be corruption) Behaviour that may be administrative misconduct Misuse of entrusted power or office for private gain Behaviour that may be criminal Maladministration refers to the making of an official decision in a manner which is inefficient, incompetent, contrary to law, arbitrary, unreasonable, without proper justification, lacking in procedural fairness, or made without due consideration of the merits of the matter. Maladministration may breach the APS Code of Conduct. Improper behaviour can include inappropriate personal behaviour, misuse of government systems or misuse of government resources. Improper behaviour may also breach the APS Code of Conduct. D i s c u s s i o n P a p e r 7

9 Corruption can occur on many levels, from small illicit payments as part of routine bureaucratic processes, to the large scale diversion of public resources to corrupt individuals. Corruption affects both the public and private sectors and can be facilitated by bribery, embezzlement, money-laundering, nepotism and cronyism. How does corruption affect Australia s national interests? Corruption has the potential to threaten a range of Australian Government interests, including: Australia s international reputation Corruption has the potential to undermine Australia s reputation for high standards of governance, robust law and justice institutions, and transparent and fair markets. The 2012 Index of Economic Freedom found that Australia s judicial system operates independently and impartially, with consistent application of laws. Property rights and contract enforcement are very secure. Effective anti-corruption measures discourage bribery of public officials and uphold clean government. However, even one corruption or bribery matter can damage Australia s international standing. For example, the Inquiry into certain Australian companies in relation to the UN Oil-for-Food Programme (the Cole Inquiry, 2006) found that the adverse consequences of the Australian Wheat Board s (AWB) bribery of Iraqi officials were immense. Trade with Iraq worth more than A$500 million per annum was forfeited, and AWB cast a shadow over Australia s reputation in international trade. Transparency International attributed this scandal to Australia temporarily losing its place in 2007 as one of the ten least corrupt countries in the world. i National and global security The Australian Government identified serious and organised crime as a national security priority in the Commonwealth Organised Crime Strategic Framework. The framework identifies corruption as a major challenge in addressing organised crime. Criminal networks actively seek out individuals within law enforcement and other public sector entities to corruptly undertake and conceal illicit activities, and to launder the proceeds of crime. Similarly, the Australian Crime Commission s 2011 report, Organised Crime in Australia, analysed the international convergence of corruption, political instability and violent extremism. This convergence provides an enabling environment for moving and exchanging drugs, arms, people, stolen or pirated goods and for funding criminal and extremist activities. The report found that states with high levels of corruption feature prominently among failed, failing and rogue states. Such states provide a base for both transnational organised crime and terrorist groups. International development The UN General Assembly s 2010 report Keeping the promise: united to achieve the Millennium Development Goals emphasised that fighting corruption is a high priority as corruption diverts resources away from poverty eradication, the fight against hunger and sustainable development. The World Bank s Stolen Asset Recovery Initiative (StAR) estimated that developing countries lose between US$20 billion and US$40 billion each year to bribery, embezzlement, and other corrupt practices. Domestic public sector governance and financial integrity Data from the most recently published Australian Public Service Commissioner s State of the Service Report shows the level of misconduct in the Australian Public Service continues to be low, with less than four in every 1,000 employees being found to have breached the APS Code of Conduct. ii Any instances of fraud, however, can be damaging to the Australian Government, both financially and in terms of reputation. iii 8 D i s c u s s i o n P a p e r

10 3. REPRESENTATIVE DEMOCRACY Australia has a strong federal and democratic system of representative government that is, government by representatives of the people who are chosen by the people. This fundamental principle is enshrined in the Australian Constitution and, together with independent and impartial courts and non-partisan public services, provides a strong foundation upon which anti-corruption measures can be built. Respect for the rule of law, accountability and having the highest ethical standards are the foundations of any democracy and provide the grounding for a society that is resilient to corruption. Indeed, the Australian public rightly expects high standards of behaviour and a high level of performance from their government, public institutions and the business sector. Our federal system of government has developed a comprehensive anti-corruption system of checks and balances for both the public and private sectors. Continuing to ensure all elements of this system are appropriate and functioning effectively is critical to the success of these efforts. This includes ensuring laws are appropriate and effectively enforced, ensuring the correct institutions and frameworks are in place, working in partnership across all sectors to ensure our efforts are coordinated, continuing to educate and innovate on anti-corruption measures, and ensuring continued political commitment to combating corruption. In 2007, the Australian Government introduced new Standards of Ministerial Ethics, requiring Commonwealth ministers to conduct themselves to a high standard of conduct. The standards are underpinned by the principle that ministers and parliamentary secretaries must act with due regard for integrity, fairness, accountability, responsibility and the public interest ensuring that corrupt behaviour is not tolerated at the most senior levels of national government. iv Constitutional framework Commonwealth legislative power The Australian Constitution establishes a federal system in which legislative, executive and judicial powers are shared or distributed between the Commonwealth and six states. It also enables the Commonwealth Parliament to make laws in relation to territories. There are ten territories, of which three are self-governing. The Constitution does not confer on the Commonwealth Parliament the power to make laws on all subjects but lists subjects about which it can make laws. While the list of powers given to the Commonwealth Parliament does not expressly refer to corruption, the Commonwealth can rely on various heads of power to support laws designed to prevent and punish corrupt conduct across a wide range of activities regulated by the Commonwealth. D i s c u s s i o n P a p e r 9

11 State legislative power The states each have their own constitution, but these must be read subject to the Australian Constitution. Except for a few matters, a state parliament can make laws on any subject of relevance to that state. Accordingly, state parliaments can pass laws on a wider range of subjects than the Commonwealth Parliament. Criminal law The Commonwealth Parliament does not have specific power with regard to criminal law. However, the Commonwealth can enact criminal laws relying on other powers, for example those that are expressly provided for under the Constitution. Commonwealth criminal legislation is primarily restricted to criminal activity against Commonwealth interests, officers or property or is directed at crimes with an international element such as the bribery of foreign officials. Most criminal activity is governed by the laws of the states. This is true for offences of corruption, including fraud and bribery. For example, in addition to regimes at the Commonwealth level, the states and territories have their own domestic fraud and bribery offences, and supporting regimes such as proceeds of crime legislation. The overlap between federal and state and territory criminal law does not cause difficulties in practice, as the Commonwealth Parliament has vested state and territory courts with extensive jurisdiction to hear matters arising under federal law. Separation of judicial power The Australian Constitution embodies a strict separation of federal judicial power from legislative and executive power. Federal courts may only exercise judicial power and power that is incidental to judicial power. The parliament and the executive government cannot exercise judicial power. This supports the rule of law and the independence of judges, helping to uphold public confidence in the administration of justice. The conduct of Australian judges is characterised by very high standards of impartiality. Three levels of government Australia is a federation and power is shared between three levels of government. Each level of government is run by a democratically elected council or parliament. Local government is a legislative responsibility of the states and territories and is recognised in the constitution of each state. State parliaments determine the roles and responsibilities of local governments, and those responsibilities vary from state to state. 1 0 D i s c u s s i o n P a p e r

12 Democratic institutions Robust democratic institutions play an important part in promoting a fair and transparent society and combating corruption. Among these institutions are the following: Parliamentary committees Parliamentary committees have an important role in scrutinising government activity and proposed laws. For example, the Parliamentary Joint Committee on the Australian Commission for Law Enforcement Integrity was established in 2007 to examine trends and changes in law enforcement that relate to corruption. The committee is also empowered to examine corruption in Australian Government agencies with a law enforcement function, as well as the integrity of staff members of those agencies. A free media Australia has a free and independent media, which can report on allegations of corrupt behaviour by public officials and the private sector. Civil society Integrity agencies, academia, the public and private sectors as well as non-government organisations play an important role in raising awareness of current and emerging corruption risks through their contribution to public debate and analysis. The Department of the Prime Minister and Cabinet has established the Office for the Not-For-Profit Sector to coordinate reforms that strengthen the sector and promote the National Compact: Working Together. v Royal commissions From time to time, Australian governments also establish royal commissions to inquire into and report on matters of public concern, including allegations of systemic corruption. D i s c u s s i o n P a p e r 1 1

13 4. MULTI-AGENCY MODEL In accordance with Australia s multi agency approach to combating corruption, a number of Australian Government agencies play a role in combating corruption through promoting accountability, transparency and effective enforcement. AUSTRALIA S MULTI-AGENCY APPROACH STANDARDS & OVERSIGHT Attorney-General s Department Australian Public Service Commission Auditor-General Australian Electoral Commission Office of the Australian Information Commissioner Department of Finance and Deregulation Parliamentary Standards DETECTION & INVESTIGATION Australian Federal Police Australian Commission for Law Enforcement Integrity Australian Crime Commission Inspector-General of Intelligence and Security Office of the Commonwealth Ombudsman Australian Transaction Reports and Analysis Centre PROSECUTION Office of the Commonwealth Director of Public Prosecutions INTERNATIONAL COOPERATION International Crime Cooperation Central Authority Attorney-General s Department Portfolio Agencies AusAID i. Attorney-General s Department The Australian Attorney-General s Department is responsible for a number of domestic criminal laws that are critical to combating corruption such as foreign bribery, organised crime, money laundering and proceeds of crime provisions. The department leads Australia s engagement on UN, OECD, Asia-Pacific Economic Cooperation (APEC), Financial Action Task Force (FATF) and G20 anti-corruption related initiatives. The department is responsible for managing the review of Australia s compliance with UNCAC. The department is also Australia s central authority for extradition and mutual assistance in criminal matters. The International Criminal Cooperation Central Authority facilitates international legal cooperation to and from foreign countries, including in corruption matters. The Attorney-General s Department leads a Commonwealth Inter-Departmental Committee on anti-corruption, which meets on a quarterly basis to discuss the coordination and management of anti-corruption initiatives. Key members of the committee include the Australian Federal Police, the Australian Taxation Office, the Treasury, the Australian Crime Commission, the Office of the Commonwealth Director of Public Prosecutions, Australian Transaction Reports and Analysis Centre (AUSTRAC), the Australian Commission for Law Enforcement Integrity, the Department of the Prime Minister and Cabinet, the Office of the Commonwealth Ombudsman, AusAID, the Department of Foreign Affairs and Trade and the Australian Public Service Commission. 1 2 D i s c u s s i o n P a p e r

14 ii. Australian Federal Police The Australian Federal Police (AFP) investigates serious or complex crimes against Commonwealth laws, its revenue, expenditure and property. This can include both internal and external fraud committed in relation to Commonwealth programs. Commonwealth agencies refer allegations of corruption to the AFP for investigation. Corruption referrals relate to the following offences: unauthorised disclosure of information contrary to Section 70 of the Crimes Act 1914 vi bribery, including bribery of a foreign public official contrary to Sections and 70.2 of the Criminal Code Act 1995 (the Criminal Code) perjury contrary to Section of the Criminal Code unauthorised access, or modification, to restricted data contrary to Section of the Criminal Code abuse of public office contrary to Section of the Criminal Code. The AFP International Deployment Group plays a key role in strengthening rule of law and encouraging good governance practices in police organisations, specifically in our region but extending to other parts of the world where the group is deployed. iii. Office of the Commonwealth Director of Public Prosecutions The Office of the Commonwealth Director of Public Prosecutions (CDPP) is an independent prosecuting agency established under the Director of Public Prosecutions Act The CDPP is within the portfolio of the Australian Attorney-General, but operates independently of the Attorney-General and of the political process. The main offences prosecuted by the CDPP include drug importation, offences against corporate law, fraud on the Commonwealth in its various guises (such as tax fraud, Medicare fraud and social security fraud), money laundering, people smuggling, people trafficking (including sexual servitude and slavery matters), terrorism, and a range of regulatory offences. iv. Australian Commission for Law Enforcement Integrity The Australian Commission for Law Enforcement Integrity (ACLEI) detects, disrupts and deters possible corrupt conduct in prescribed Commonwealth law enforcement agencies. The Office of the Integrity Commissioner and ACLEI were established by the Law Enforcement Integrity Commissioner Act Those agencies subject to the Integrity Commissioner s jurisdiction are the Australian Crime Commission, the Australian Federal Police and the former National Crime Authority. From January 2011, the Australian Customs and Border Protection Service also became subject to the Integrity Commissioner s independent scrutiny in relation to their law enforcement functions. D i s c u s s i o n P a p e r 1 3

15 v. Australian Crime Commission The Australian Crime Commission (ACC) was established under the Australian Crime Commission Act 2002 as a statutory authority to combat serious and organised crime. The ACC is Australia s national criminal intelligence agency with unique investigative capabilities. The ACC conducts special operations and investigations against Australia s highest threats from serious and organised criminals. This includes: providing national strategic criminal intelligence assessments maintaining national criminal intelligence holdings developing national responses to organised crime developing partnerships, providing coordination and collaboration across the Commonwealth, states and territories and the private sector providing an independent view on the risk of serious and organised crime across Australia and the impact of offshore threats. The ACC works with partners to disrupt, disable and dismantle serious and organised criminal syndicates. The agency seeks to harden the Australian environment against the threat of nationally significant crime by developing prevention strategies and influencing policy and legislation at Commonwealth and state and territory levels. vi. Australian Public Service Commission The Australian Public Service Commission supports the administration of the Public Service Act This Act provides for the management and leadership of APS employees and defines the powers, functions and responsibilities of agency heads, the Public Service Commissioner and the Merit Protection Commissioner. The Act also sets out the APS Values and Code of Conduct. Among other things, the Code of Conduct requires all agency heads and APS employees to act honestly and with integrity, and not use their employment improperly for personal gain and to disclose and take reasonable steps to avoid any conflict of interest, real or apparent. vii Agency heads are responsible for putting in place systems and processes for ensuring their employees understand and carry out their responsibilities under the Code of Conduct and other legislation. Agency heads are also responsible, under the Act, for processes for investigating misconduct. The Act provides protection for whistleblowers (ie an APS employee who has reported a breach of the Code of Conduct to an authorised person). (See also Section 5) The responsibilities of the Public Service Commissioner include: promoting the APS Values and Code of Conduct evaluating the extent to which agencies incorporate the APS Values and the adequacy of systems in agencies for ensuring compliance with the Code of Conduct inquiring into whistleblowing reports made by APS employees in certain circumstances, and inquiring into alleged breaches of the Code of Conduct by agency heads considering and reporting to the Minister for the Public Service and Integrity on any matter relating to the APS. 1 4 D i s c u s s i o n P a p e r

16 The Merit Protection Commissioner s responsibilities include inquiring into whistleblowing reports made by APS employees in certain circumstances and inquiring into any APS action at the request of the Minister for the Public Service and Integrity. In 2009, the Australian Government launched the Ethics Advisory Service, a dedicated telephone and service for APS employees seeking advice and information about the ethical framework in which they work, including their obligations under the APS Values and Code of Conduct. vii. Office of the Commonwealth Ombudsman The Office of the Commonwealth Ombudsman takes complaints and enquiries from members of the public about government administrative action, and undertakes investigations into those complaints and other systemic problems on an own motion basis. The Commonwealth Ombudsman also conducts compliance audits of law enforcement and regulatory agency use of covert information gathering powers and cooperates internationally to improve ombudsman services in the Asia-Pacific region. The Commonwealth Ombudsman s mission is to promote fair and accountable government administration. viii. Auditor-General The Auditor-General, assisted by the Australian National Audit Office, provides independent assurance about the use of public sector resources to parliament, the government, chief executive officers and the public. Through the delivery of an integrated range of high-quality audit reports and other publications, the Auditor-General aims to support and improve public sector performance and accountability. ix. Australian Electoral Commission The Australian Electoral Commission s (AEC) role is to ensure the safe, fair and impartial conduct of parliamentary elections. The AEC is an independent electoral management body responsible for maintaining an impartial and independent electoral system for all eligible Australian voters in accordance with the requirements of the constitution and the Commonwealth Electoral Act x. Office of the Australian Information Commissioner The Office of the Australian Information Commissioner (OAIC) is an independent statutory agency established under the Australian Information Commissioner Act The OAIC was established as part of major changes to federal freedom of information law made in These reforms brought together, for the first time, functions relating to freedom of information and privacy, as well as new functions relating to information policy. The Office of the Privacy Commissioner, which was the national privacy regulator, was integrated into the OAIC on 1 November xi. Inspector-General of Intelligence and Security The Inspector-General of Intelligence and Security (IGIS) reviews the activities of the agencies that collectively comprise the Australian intelligence community. IGIS has its own motion powers in addition to considering complaints from members of the public or requests from ministers. The overarching purpose of IGIS is to ensure that each agency in the Australian intelligence community acts legally and with propriety, complies with ministerial guidelines and directives, and respects human rights. D i s c u s s i o n P a p e r 1 5

17 5. STRONG, MODERN LEGISLATIVE REGIME AND GUIDELINES Australia has a strong legislative regime criminalising corrupt behaviour. Australia s corruption offences cover a broad range of crimes, including bribery, embezzlement, nepotism and extortion. For this reason, Australia s corruption offences are not contained in any single Act of Parliament and are found in both Commonwealth and state and territory legislation. At the Commonwealth level, a number of pieces of legislation contain corruption-related offences. viii For example: The Criminal Code Act 1995 criminalises the laundering of proceeds of crime, domestic and foreign bribery, embezzlement, trading in influence, abuse of public office and other fraudulent conduct, money laundering, and extensions of criminal responsibility. The Proceeds of Crime Act 2002 establishes a comprehensive regime to trace, restrain and confiscate the proceeds of Commonwealth indictable offences and certain foreign offences. This Act also contains unexplained wealth provisions, which allow courts to order individuals to show that their wealth was lawfully acquired. The Financial Management and Accountability Act 1997 (FMA Act) provides the framework for the proper management of public money and public property by the executive arm of the Commonwealth. The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) establishes a regulatory regime that strengthens the capacity of business to identify, mitigate and manage the risk of their businesses being used to launder money or finance terrorism. The provisions include customer identification and verification, and reporting and record keeping obligations on certain businesses. These measures enable businesses to know their customers, their sources of wealth and monitor financial transaction movements. They enable law enforcement and intelligence agencies to follow money trails in potential cases of corruption. Compliance with obligations under the AML/CTF Act is supervised by AUSTRAC. The Commonwealth Authorities and Companies Act 1997 regulates certain aspects of the corporate governance, financial management and reporting of Commonwealth authorities that are in addition to the requirements of their enabling legislation, and the corporate governance and reporting of Commonwealth companies that are in addition to the requirements of the Corporations Act Part V of the Australian Federal Police Act 1979 establishes the scope for a strong professional standards framework within the AFP. This framework targets the continuum of activity that leads to corruption and includes prevention, detection and investigation activities. Allegations of serious misconduct and corruption within the AFP are overseen by ACLEI. The Act makes provision for additional powers to investigate serious misconduct allegations against AFP members by a specialised unit within the AFP. This unit works closely with ACLEI. Part V of the Act was enacted in 2006, following a review of professional standards within the AFP. It reflects a management-oriented approach to less serious misconduct balanced against a swift and effective response to serious allegations, including corruption. 1 6 D i s c u s s i o n P a p e r

18 Other Commonwealth legislation is designed to effectively prevent or enable reporting on corrupt conduct: Australia s administrative law system (including the Judiciary Act 1903, the Administrative Appeals Tribunal Act 1975, the Administrative Decisions (Judicial Review) Act 1977 and the Legislative Instruments Act 2003) protects against abuse of power by providing for merits and judicial review of government decisions and promoting transparency in government processes. The Freedom of Information Act 1982 (FOI Act) creates a general right for members of the public to obtain access to documents, and sets out a range of obligations and restrictions on departments and the public for exercising these rights. The Australian Government has reformed the FOI Act with the principal object of promoting a pro disclosure culture across the government and building a stronger foundation for more openness in government. Whistleblower protection in the Commonwealth public sector is provided by law, including under section 16 of the Public Service Act 1999 and section 16 of the Parliamentary Service Act These Acts provide that a person must not victimise or discriminate against an Australian Public Service or Parliamentary Service employee because that employee has reported breaches (or alleged breaches) of the APS Code of Conduct or the Parliamentary Service Code of Conduct to an authorised person. Some whistleblower protection in the private sector is provided by law, including under Part 9.4AAA of the Corporations Act 2001, the Banking Act 1959, the Insurance Act 1973, the Life Insurance Act 1995 and the Superannuation Industry (Supervision) Act These protections are designed to encourage people within companies, or with special connections to companies, to alert the Australian Securities and Investment Commission and other authorities to illegal behaviour. D i s c u s s i o n P a p e r 1 7

19 Recent initiatives Whistleblower Protection Scheme In March 2010, the Australian Government tabled its response to the House of Representatives Standing Committee on Legal and Constitutional Affairs report entitled Whistleblower protection: a comprehensive scheme for the Commonwealth public sector. A Public Interest Disclosure Bill is being developed to give effect to the government response and introduce the first stand-alone whistleblower protection scheme for the Commonwealth public sector. The legislation will facilitate reporting and provide for investigation of alleged wrongdoing in the public sector. Public Service Act Revision of the Australian Public Service Values and other amendments In 2010, the Advisory Group on Reform of Australian Government Administration released its report, Ahead of the Game: Blueprint for the Reform of Australian Government Administration. Among other things, the report recommended broad changes to the APS Values to make them shorter, more memorable and more effective in driving change. The Public Service Amendment Bill has been drafted to implement legislative changes recommended in the report and to improve the operation of the Public Service Act. The Bill is expected to be introduced early in Commonwealth Fraud Control Guidelines ix In 2011, the Australian Government issued the revised Commonwealth Fraud Control Guidelines under the Financial Management and Accountability Act 1997 (FMA Act). These guidelines define the Australian Government s requirement that all agencies subject to the Act put in place practices and procedures for effective fraud control. Agencies must prepare fraud risk assessment and fraud control plans that comply with the guidelines. Under the guidelines, agencies must also refer all instances of serious or complex fraud involving Commonwealth interests to the AFP. Officials must have regard to the guidelines when performing duties related to the efficient, effective, economical and ethical management of Commonwealth resources. Breaches of the guidelines may attract a range of criminal, civil or administrative remedies. Commonwealth Procurement Guidelines x The Commonwealth Procurement Guidelines represent the policy framework under which public service agencies govern and undertake their own procurement. The Guidelines focus on value for money and transparency. Commonwealth Grant Guidelines xi The Commonwealth Grant Guidelines establish the grants policy and reporting framework for all departments and agencies subject to the FMA Act. 1 8 D i s c u s s i o n P a p e r

20 Strengthening legal protections In February 2010, the Commonwealth Parliament passed two bills to further strengthen the criminal confiscation system: the Crimes Legislation Amendment Act (SOC Act No.1) and the Crimes Legislation Amendment Act (SOC Act No.2). The amendments focus on confiscating the proceeds of crime while strengthening national law enforcement coordination and capability. The strategy is two pronged: to remove the profitability of criminal activity, and increase the likelihood of criminals being caught. In the next twelve months, parliament is scheduled to consider legislation to help the Australian Crime Commission share intelligence with the private sector to support their efforts to harden the environment against serious and organised crime threats. The Commonwealth Parliamentary Joint Committee on Law Enforcement is also conducting an inquiry into Commonwealth unexplained wealth laws and arrangements. The committee is examining the operation of the unexplained wealth provisions of the Proceeds of Crime Act 2002, which can be used to target serious and organised crime bosses who arrange their affairs so that they can enjoy the proceeds of crime, without committing the actual crimes themselves. D i s c u s s i o n P a p e r 1 9

21 6. WORKING IN PARTNERSHIP - COMMONWEALTH, STATE, TERRITORY AND LOCAL GOVERNMENTS Coordination on anti-corruption measures is currently pursued through a number of forums, such as the Council of Australian Governments (COAG), COAG standing councils and through inter-agency coordination. Australian Anti-Corruption Commissions Forum The Australian Anti-Corruption Commissions Forum comprises the heads of Australian anti-corruption agencies. It provides the means for these agencies to interact; exchange information, knowledge and ideas; work cooperatively; share training and resources; and promote common areas of interest. Under this umbrella, the Australian Commission for Law Enforcement Integrity and state counterparts participate in operational forums, including legal, intelligence, research and communication subgroups. Presently, the Integrity Commissioner chairs the forum. Council of Australian Governments COAG is the peak intergovernmental forum in Australia, comprising the Prime Minister, state premiers, territory chief ministers and the President of the Australian Local Government Association. COAG s role is to initiate, develop and monitor the implementation of policy reforms that are of national significance and that require cooperative action by Australian governments. For example, in April 2009, COAG leaders agreed to progress work in developing a nationally coordinated response to organised crime through the Standing Council on Law and Justice and the Standing Council on Police and Emergency Management. Standing Council on Law and Justice SCLJ is a national, ministerial-level council established by COAG. Its members are the Australian Attorney-General, the state and territory Attorneys-General and the New Zealand Minister of Justice. SCLJ provides a forum for members to discuss and progress matters of mutual interest relating to law and justice, including legal policy and service provision. The SCLJ focuses on initiatives of high-level, strategic and national significance that require cooperation between jurisdictions. It also works closely with the Standing Council on Police Management to implement the National Organised Crime Response Plan. Standing Council on Police and Emergency Management SCPEM is a ministerial-level council also established by COAG. Its members are the Australian, state, territory and New Zealand ministers with responsibility for police and emergency management matters and a representative from the Australian Local Government Association. SCPEM s purpose is to promote a coordinated national response to law enforcement and emergency management issues. Public Service Commissioners Conference The Public Service Commissioners Conference is held twice a year. The conference is a cross-jurisdictional forum for Australian, state and territory public service commissioners and New Zealand s State Services Commissioner. The conference provides opportunities for commissioners to discuss contemporary challenges in public administration. It also serves as a forum for exchanging information and sharing experiences. 2 0 D i s c u s s i o n P a p e r

22 7. WORKING IN PARTNERSHIP CIVIL SOCIETY AND THE PRIVATE SECTOR Australia values the development of strong partnerships with civil society, international organisations and the business community. Civil society plays an important role in terms of raising awareness, obtaining access to information and supporting and enforcing business ethics. The Australian Government works closely with non-government organisations such as Transparency International to empower civil society, government and private sector stakeholders to advocate for anti-corruption reforms, and analyse the extent and causes of corruption. Australia provides political and financial support for civil society to participate in multilateral anti-corruption forums. Domestically, there are several agencies that investigate or provide intelligence about corruption in the private sector. AUSTRAC: The Australian Transaction Reports and Analysis Centre provides financial intelligence on potential crimes, including corruption. ACCC: The Australian Competition and Consumer Commission educates the business community and the public for example, how to make a complaint and advises small businesses how to avoid corrupt conduct. APRA: The Australian Prudential Regulation Authority oversees banks, credit unions, building societies, insurance companies, and the superannuation industry. ASIC: The Australian Securities and Investment Commission has powers to investigate offences by corporations and corporate officers. This includes powers to investigate bribery offences, the misleading of shareholders or other abuses for personal gain. EFIC: As Australia s export credit agency, the Export Finance and Insurance Corporation was established to help grow Australian businesses, trade and investment activities internationally by providing finance, guarantee and insurance facilities. EFIC works to eradicate corruption in international business transactions by: a) informing exporters and, where appropriate, other relevant parties, of the legal consequences of engaging in bribery; b) requiring exporters and, where appropriate, other relevant parties, to provide a no engagement in bribery declaration; and c) informing law enforcement authorities if there is credible evidence that bribery was involved in the award or execution of an export contract. Conduct of the private sector The regulatory framework governing Australia s private sector is covered under the Corporations Act 2001, the Australian Securities and Investments Act 2001, the ASX Corporate Governance Council s Corporate Governance Principles and Recommendations as well as individual corporate codes of conduct. Australia adheres to the OECD (Organisation for Economic Co-operation and Development) Guidelines for Multinational Enterprises, which are recommendations on responsible business conduct, including provisions on how the private sector can help combat bribery. D i s c u s s i o n P a p e r 2 1

23 The Corporations Act 2001 regulates the conduct of directors and officers of companies and includes offences such as failure to act in good faith, and fraud by company officers. In addition, corporate criminal responsibility has been established for all offences contained in the Criminal Code Act 1995, meaning that corporations may be found guilty of any offence contained in the code, including those punishable by imprisonment. The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 imposes obligations on business when they provide certain services (financial, gambling and bullion) to identify and verify their customers, lodge reports with AUSTRAC, monitor the relationship with their customers and make and retain records of the services provided. Similarly, under the Proceeds of Crime Act 2002, financial institutions can be made to provide certain information and documents to specified law enforcement officers upon request. Recent initiatives Education To support a business culture of transparency and accountability, the Australian Government runs a national anti-corruption education and outreach program called Trading with Integrity. The program informs Australian businesses of their responsibilities to conduct activities in accordance with Australian law. It covers the various international anti-bribery and anti-corruption frameworks supported by the Australian Government including the APEC Code of Conduct for Business and OECD instruments including the Guidelines for Multinational Enterprises, the Anti-Bribery Convention and the Risk Awareness Tool. The Department of Foreign Affairs and Trade also publishes web-based resources on anticorruption for Australians and Australian businesses travelling, working or operating overseas. For more information, visit and search for measures against corruption. Lobbying Code of Conduct and Register of Lobbyists Since 2008, the Department of the Prime Minister and Cabinet has administered the Lobbying Code of Conduct and Register of Lobbyists, which was established to improve transparency in the third party lobbying sector. National policy on match-fixing in sport On 10 June 2011, Australia s sports ministers agreed to a national policy on deterring match-fixing in sport, representing a commitment by the Australian, state and territory governments to work together to address the threats match-fixing and associated corruption pose to the integrity of Australian sport. In line with the national policy, governments have since agreed to pursue a nationally consistent legislative approach to deter and deal with match-fixing. This will introduce specific legislation to address agreed match-fixing behaviours, with these criminal offences to carry a maximum penalty of ten years imprisonment. Further, all Australian governments have endorsed an operational model to protect the integrity of the sports betting industry. The model supports the development of integrity arrangements between sports and betting companies to share information, provide sports with a right to veto bet types and provide a financial return to sports from sports betting. To oversee these national arrangements, a new National Integrity of Sport Unit will be established. Government funding will be contingent on sports implementing appropriate anti-match-fixing and anti-corruption policies and practices, including match-fixing code of conduct principles, education programs for players and officials, and disciplinary frameworks. 2 2 D i s c u s s i o n P a p e r