11 April 2019

Corporate Criminal Responsibility

The Commonwealth Attorney General yesterday tasked the Australian Law Reform Commission (ALRC) with a Review into Australia’s corporate criminal responsibility regime.

The Media release states
"It is essential that our laws are effective in holding corporations to account for criminal misconduct by their officers," the Attorney-General said. "This review will examine ways those laws can be strengthened. 
"Under the Criminal Code, criminal responsibility applies to corporations for the actions of employees, agents or officers of those corporations, where the corporation expressly or impliedly authorises or permits those actions. 
"For example, corporate liability provisions can be used to hold a company liable for any criminal offences where a corporate culture exists that tolerates or encourages culpable conduct. 
"The review will consider reforms to the Criminal Code and other relevant legislation to provide a simpler, stronger and more cohesive regime for corporate criminal responsibility. This includes consideration of any practical challenges to investigating and prosecuting these crimes."  ... 
"The review will consider options for implementing recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and the ASIC Enforcement Review Taskforce." 
The ALRC  terms of reference, referring to the corporate criminal responsibility regime in Part 2.5 of the Commonwealth Criminal Code contained in Schedule 1 of the Corporate Criminal Code Act 1995 (Cth) ('the Code'), are
a consideration of whether, and if so what, reforms are necessary or desirable to improve Australia's corporate criminal liability regime. 
In particular, the ALRC should review the following matters:
  • the policy rationale for Part 2.5 of the Code; 
  • the efficacy of Part 2.5 of the Code as a mechanism for attributing corporate criminal liability; 
  • the availability of other mechanisms for attributing corporate criminal responsibility and their relative effectiveness, including mechanisms which could be used to hold individuals (eg senior corporate office holders) liable for corporate misconduct; 
  • the appropriateness and effectiveness of criminal procedure laws and rules as they apply to corporations; and 
  • options for reforming Part 2.5 of the Code or other relevant legislation to strengthen and simplify the Commonwealth corporate criminal responsibility regime.
The ALRC is to have regard to existing reports relevant to Australia's corporate accountability system, including reports on:
  • corporate misconduct; 
  • corporate criminal law; 
  • corporate governance; 
  • court procedure which applies in corporate enforcement actions; and 
  • law enforcement arrangements relating to corporate misconduct/crime. 
Reports that the ALRC should consider should include but not be limited to the: 2019 Final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry; and 2017 report of the ASIC Enforcement Review Taskforce.

The review encompasses consideration of:
  •  comparative corporate criminal responsibility regimes in relevant foreign jurisdictions; 
  • potential application of Part 2.5 of the Code to extraterritorial offences by corporations; 
  • possible alternatives to expanding the scope and application of Part 2.5 of the Code, such as introducing or strengthening other statutory regimes for corporate criminal liability; 
  • whether Part 2.5 of the Code needs to incorporate provisions enabling senior corporate officers to be held liable for misconduct by corporations; and
  • options for reforming Part 2.5 of the Code (or other corporate liability regimes) to facilitate implementation of the recommendations made by, or to address issues highlighted by, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and by the ASIC Enforcement Review Taskforce. 
Noting the Federal Court of Australia's criminal jurisdiction, the review will consider the effectiveness of present Commonwealth criminal procedural laws with a focus on their interaction with state and territory criminal procedural law, particularly in relation to committal hearings.