Corporate Criminal Responsibility Inquiry – Final Report Released

The Australian Law Reform Commission report, Corporate Criminal Responsibility (Report 136, 2020), was tabled in Parliament today.

The implementation of the 20 recommendations made by the ALRC will significantly strengthen and simplify the Commonwealth corporate criminal responsibility regime.

The ALRC’s recommendations would:

  • result in simpler, clearer laws that reduce the regulatory compliance burden on corporations;
  • better protect individuals from serious corporate misconduct by focusing on the most egregious criminal conduct;
  • standardise attribution of criminal responsibility to corporations;
  • increase the range of penalty and sentencing options to punish and rehabilitate corporations more effectively; and
  • make corporations criminally responsible for failing to prevent an associate from committing certain crimes overseas on their behalf.

At present, the law relating to corporate misconduct is both unjust and unfair. Corporations are much less likely to be prosecuted than individuals, and when they are, it is typically for a relatively minor regulatory offence.

Small corporations are more likely to be targeted than large corporations, even though the wrongdoing of large corporations may potentially affect far more people. Further, individuals are not held accountable when they commit crimes for the advantage of a corporation.

The ALRC’s research identified over 3100 criminal offences relevant to corporations from just a sample of 25 statutes. Thus there are few prosecutions but a significant regulatory compliance burden of unnecessary complexity that impacts on corporations.

President of the ALRC, the Hon Justice SC Derrington, said the report is set against the backdrop of a renewed focus on the protection of Australian consumers from flagrant misconduct, and increasing regulation in the area of corporate wrongdoing.

“These recommendations ensure that the criminal law is appropriately calibrated to address corporate wrongdoing that cannot be effectively regulated by the civil law,” Justice Derrington said.

The report comes in the wake of the 2019 Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, as well as the 2017 ASIC Enforcement Review Taskforce.

The ALRC responds to the Terms of Reference, which were received on 10 April 2019. The Terms of Reference asked the ALRC to review the policy rationale and efficacy of Part 2.5 of the Criminal Code contained in Schedule 1 of the Criminal Code Act 1995 (Cth); other mechanisms for attributing corporate criminal responsibility; liability of individuals for corporate misconduct; criminal procedure laws and rules; and options for reforming Part 2.5 of the Criminal Code or other relevant legislation to strengthen and simplify corporate criminal responsibility across the Commonwealth.

The ALRC received 14 comments on the Terms of Reference, 49 submissions in response to a Discussion Paper, conducted over 100 consultations with individuals and organisations across Australia, and hosted four public seminars in Perth, Melbourne, Sydney and Brisbane.

Corporate Criminal Responsibility (Report 136, 2020), the Data Appendices, and the Summary Report are available from the ALRC website.

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Nadine Davidson-Wall, Communications and Events Co-ordinator, 0436 940 117