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How do Australian construction companies typically ensure compliance with anti-bribery and corruption laws, and what are the consequences of non-compliance?

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Australian Construction Companies' Compliance with Anti-Bribery and Corruption Laws

Australian construction companies are subject to various anti-bribery and corruption laws, including the Criminal Code Act 1995 and the Corporations Act 2001. These laws aim to prevent bribery and corruption in both domestic and international business dealings. To comply with these laws, companies must implement effective anti-bribery and corruption programs, which include:

Key Laws and Regulations

  • Criminal Code Act 1995 (Cth): Prohibits bribery of foreign public officials and applies to Australian companies and individuals who engage in corrupt conduct overseas.
  • Corporations Act 2001 (Cth): Requires companies to maintain a culture of compliance and integrity, including having adequate policies and procedures in place to prevent bribery and corruption.
  • Australian Securities and Investments Commission (ASIC) Act 2001 (Cth): ASIC is responsible for enforcing corporate governance and anti-corruption laws, including those related to bribery and corruption in the construction industry.
  • Building and Construction Industry (Improving Productivity) Act 2016 (Cth): Establishes the Australian Building and Construction Commission (ABCC), which regulates the construction industry and investigates allegations of corruption and bribery.
  • State and territory laws: Each state and territory in Australia has its own anti-corruption laws and agencies, such as the Independent Commission Against Corruption (ICAC) in New South Wales and the Corruption and Crime Commission (CCC) in Western Australia.

Compliance Strategies

  • Implementing Anti-Bribery Policies: Developing and enforcing comprehensive anti-bribery policies that clearly outline the company's stance on bribery, the consequences of non-compliance, and procedures for reporting suspected bribery incidents.
  • Conducting Risk Assessments: Conducting regular risk assessments to identify potential bribery risks associated with their operations, including risks related to dealing with foreign public officials, joint ventures, and third-party contractors.
  • Providing Training and Education: Providing regular training and education to employees, contractors, and third-party agents on anti-bribery laws, company policies, and procedures to ensure they understand their obligations and the consequences of non-compliance.
  • Establishing Due Diligence Procedures: Establishing due diligence procedures for vetting and selecting third-party contractors, agents, and joint venture partners to minimise the risk of bribery.
  • Maintaining Accurate Records: Maintaining accurate and transparent records of all transactions, including payments, gifts, and hospitality, to demonstrate compliance with anti-bribery laws.

Penalties for Non-Compliance

The penalties for non-compliance with anti-bribery and corruption laws in Australia can be severe, including:

  • Fines of up to AUD 2.5 million (approximately USD 1.7 million) for bribing foreign public officials.
  • Fines of up to AUD 1 million (approximately USD 670,000) for engaging in corrupt conduct, including bribery.
  • Companies that fail to maintain a culture of compliance and integrity can face penalties of up to AUD 9.45 million (approximately USD 6.3 million) or 10% of their annual turnover.

Enforcement and Penalties

Australian Federal Police (AFP): Responsible for investigating breaches of federal anti-bribery laws.

Australian Securities and Investments Commission (ASIC): Can take action against companies and directors for breaches of the Corporations Act.

State and Territory Anti-Corruption Bodies: Such as the Independent Commission Against Corruption (ICAC) in NSW, which investigate and expose corruption at the state level.

Are there any case studies of bribery in Australian construction companies?

According to the information available, there have been instances of bribery and corruption in the Australian construction industry. Here are a few notable case studies:

  • Leighton Holdings (now CIMIC Group): In 2013, it was reported that Leighton Holdings had paid bribes to secure contracts in Iraq and other countries . An internal investigation found evidence of corruption, and several executives resigned or were terminated.
  • BHP Billiton: In 2015, BHP Billiton, a multinational mining and construction company, agreed to pay a $25 million fine to settle charges with the US Securities and Exchange Commission (SEC) related to alleged bribery of Asian and African officials.
  • Downer EDI: In 2018, the Australian construction company Downer EDI disclosed that it had identified potential corruption and bribery issues in its Australian and Asian operations.
  • AWB Limited (formerly Australian Wheat Board): Although not exclusively a construction company, AWB Limited was involved in a significant bribery scandal related to the Oil-for-Food Programme in Iraq.

These cases demonstrate the risks of bribery and corruption in the Australian construction industry, particularly when operating in international markets .

Guidance and Resources

The Australian government provides guidance and resources to help companies develop their anti-bribery and corruption compliance frameworks. This includes the Attorney-General's department's guidance on bribery and corruption risk assessments.

International Compliance

Australian construction companies operating internationally must also comply with foreign anti-bribery and corruption laws, such as the UK Bribery Act and the US Foreign Corrupt Practices Act. This requires an understanding of the differences between these laws and the Australian anti-bribery and corruption laws.

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