Recommendations

Recommendation 1 The Australian Government, together with state and territory governments, should develop national principles and policies for the collection, maintenance, and dissemination of criminal justice data.

Recommendation 2 Corporate conduct should be regulated primarily by civil regulatory provisions. A criminal offence should be created in respect of a corporation only when:

1. denunciation and condemnation of the conduct constituting the offence is warranted;
2. imposition of the stigma that should attach to criminal offending would be appropriate;
3. the deterrent characteristics of a civil penalty would be insufficient;
4. it is justified by the level of potential harm that may occur as a consequence of the conduct; or
5. it is otherwise in the public interest to prosecute the corporation itself for the conduct.

Recommendation 3 Infringement notices should not be available as an enforcement response for criminal offences as applicable to corporations.

Recommendation 4 The Attorney-General’s Department (Cth)  Guide  to  Framing Commonwealth Offences, Infringement Notices and Enforcement Powers should be amended to reflect Recommendations 2, 3, 5, and 8. All departments     of state should be required to provide a detailed justification in the Explanatory Memorandum accompanying the relevant bill for any proposed offences that would apply to corporations and that do not comply with the Guide.

Recommendation 5    Commonwealth statutory provisions that displace Part 2.5  of the schedule to the Criminal Code Act 1995 (Cth) should be repealed, unless an alternative attribution method is necessary in the particular instance.

Recommendation 6 Section 12.2 of the schedule to the Criminal Code Act 1995 (Cth) should be amended such that a physical element of an offence is taken to be committed by a body corporate if committed by:

1. an officer, employee, or agent of the body corporate, acting within actual or apparent authority; or
2. any person acting at the direction, or with the agreement or consent (express or implied), of an officer, employee, or agent of the body corporate, acting within actual or apparent

Recommendation 7

Option 1

Section 12.3 of the schedule to the Criminal Code Act 1995 (Cth) should be amended to:

1. replace ‘commission of the offence’ with ‘relevant physical element’;
2. replace ‘high managerial agent’ with ‘officer, employee, or agent of the body corporate, acting within actual or apparent authority’ (with consequential amendments to s 3(4));
3. replace ‘due diligence’with ‘reasonable precautions’(with consequential amendments to s 5);
4. pluralise the terms ‘attitude’, ‘policy’, and ‘rule’ in the definition of ‘corporate culture’ and replace ‘takes’ with ‘take’; and
5. repeal s 3(2)(d).

Option 2

Section 12.3 of the schedule to the Criminal Code Act 1995 (Cth) should be replaced with a provision to the effect that if it is necessary to establish a state of mind, other than negligence, of a body corporate in relation to a physical element of an offence, it is sufficient to show that:

1. one or more officers, employees, or agents of the body corporate, acting within actual or apparent authority, engaged in the relevant conduct, and had the relevant state of mind; or
2. one or more officers, employees, or agents of the body corporate, acting within actual or apparent authority, directed, agreed to or consented to the relevant conduct, and had the relevant state of

It is a defence, if the body corporate proves that it took reasonable precautions to prevent the commission of the offence.

Recommendation 8 Where appropriate, the Australian Government should introduce offences that criminalise contraventions of prescribed civil penalty provisions that constitute a system of conduct or pattern of behaviour by a corporation.

Recommendation 9 The Australian Government should implement Recommendations 4–1, 5–1, 6–1, and 6–8 of Same Crime, Same Time: Sentencing of Federal Offenders (ALRC Report 103, April 2006).

Recommendation 10 The Crimes Act 1914 (Cth) should be amended to require  the court to consider the following factors when sentencing a corporation, to the extent they are relevant and known to the court:

1. the type, size, and financial circumstances of the corporation;
2. whether the corporation had a corporate culture conducive to compliance at the time of the offence;
3. the extent to which the offence or its consequences ought to have been foreseen by the corporation;
4. the involvement in, or tolerance of, the criminal activity by management;
5. whether the unlawful conduct was voluntarily self-reported by the corporation;
6. any advantage realised by the corporation as a result of the offence;
7. the extent of any efforts by the corporation to compensate victims and repair harm;
8. the effect of the sentence on third parties; and
9. any measures that the corporation has taken to reduce the likelihood of its committing a subsequent offence, including:
   1. internal investigations into the causes of the offence;
   2. internal disciplinary action; and
   3. measures to implement or improve a compliance program.

This list should be non-exhaustive and should supplement, rather than replace, the general sentencing factors, principles, and purposes when implemented in accordance with Recommendation 9.

Recommendation 11 To maintain principled coherence and consistency in the assessment of penalties for corporations, a statutory provision should be enacted requiring the court to consider the following factors when making a civil penalty order in respect of a corporation, to the extent they are relevant and known to the court, in addition to any other matters:

1. the nature and circumstances of the contravention;
2. the deterrent effect that any order under consideration may have on the corporation or other corporations;
3. any injury, loss, or damage resulting from the contravention;
4. any advantage realised by the corporation as a result of the contravention;
5. the personal circumstances of any victim of the contravention;
6. the type, size, and financial circumstances of the corporation;
7. whether the corporation has previously been found to have engaged in any related or similar conduct;
8. whether the corporation had a corporate culture conducive to compliance at the time of the offence;
9. the extent to which the contravention or its consequences ought to have been foreseen by the corporation;
10. the involvement in, or tolerance of, the contravening conduct by management;
11. the degree of voluntary cooperation with the authorities, including whether the contravention was self-reported;
12. whether the corporation admitted liability for the contravention;
13. the extent of any efforts by the corporation to compensate victims and repair harm;
14. the effect of the penalty on third parties; and
15. any measures that the corporation has taken to reduce the likelihood of its committing a subsequent contravention, including:
    1. any internal investigation into the causes of the contravention;
    2. internal disciplinary action; and
    3. measures to implement or improve a compliance program.

Recommendation 12 The Crimes Act 1914 (Cth) should be amended to provide that when sentencing a corporation that has committed a Commonwealth offence the court has the power to make one or more of the following:

1. orders requiring the corporation to publicise or disclose certain information;
2. orders requiring the corporation to undertake activities for the benefit of the community;
3. orders requiring the corporation to take corrective action within the organisation, such as internal disciplinary action or organisational reform;
4. orders requiring the corporation to facilitate redress of any loss suffered, or any expense incurred, by reason of the offence; and
5. orders disqualifying the corporation from undertaking specified commercial activities.

A corresponding provision should be enacted in appropriate legislation to empower the court to make equivalent orders in respect of a corporation that has contravened a Commonwealth civil penalty provision.

Recommendation 13 The Crimes Act 1914 (Cth) should be amended to provide that the court may make an order dissolving a corporation if:

1. the corporation has been convicted on indictment of a Commonwealth offence; and
2. the court is satisfied that dissolution represents the only appropriate sentencing option in all the

Recommendation 14  The  Corporations  Act  2001  (Cth)  should  be  amended  to provide that a court may make an order disqualifying a person from managing corporations for a period of time that the court considers appropriate, if that person was involved in the management of a corporation that was dissolved in accordance with a sentencing order.

Recommendation 15 The Australian Government, together with state and territory governments, should develop a national debarment regime.

Recommendation 16 The Crimes Act 1914 (Cth) should  be  amended  to empower the court to order a pre-sentence report for a corporation convicted under Commonwealth law.

Recommendation 17 Sections 16AAA and  16AB  of  the  Crimes  Act  1914  (Cth) should be amended to  empower the court, when sentencing a  corporation  for a Commonwealth offence, to consider any victim impact statement made by a representative on behalf of:

1. a group of victims; or
2. a corporation that has suffered economic loss as a result of the

Recommendation 18 The Australian Government should undertake a wide- ranging review of the effectiveness of individual accountability mechanisms for corporate misconduct within five years of the entry into force of the proposed Financial Accountability Regime or equivalent. In undertaking such a review, consideration should be given to the effectiveness of:

1. accessorial liability of individuals for corporate crimes and civil contraventions;
2. directors’ and officers’ duties;
3. specific duties imposed on directors and senior management of corporations to take reasonable measures or exercise due diligence to comply with or secure corporations’ compliance with statutory obligations;
4. sector-specific accountability-mapping regimes such as the Banking Executive Accountability Regime and the proposed Financial Accountability Regime; and
5. extended management liability provisions, including deemed liability and failure to prevent provisions.

Recommendation 19  The  Australian  Government  should  consider   applying the failure to prevent offence in the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019 to other Commonwealth offences that might arise in the context of transnational business.

Recommendation 20    The Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2019 should be amended to:

1. vest the power to approve a deferred prosecution agreement in a Judge of the Federal Court of Australia (if needs be as a persona designata);
2. permit the parties to present oral submissions to the approving officer; and
3. require the publication of the reasons for any approval in open court.