Are Australia's Lax Bribery Laws Due for an Update?

A recent article published online by Independent Australia makes fraud fighters stop and wonder if Australia is behind the times in cracking down on bribery, among other financial crimes. 

The article, "Australia's lax foreign bribery laws sees U.S. clean up on corporate penalties," paints Australia's corruption laws as inadequate on the whole, and specifically weak on bribery. The headline refers to a comparison point between Australia and the U.S., drawing the distinction that "white collar crime pays under Australia's lax corporate foreign bribery laws while the U.S. government cleans up on penalties."

The Australian Government's Attorney-General's Dept. provides several fact sheets on bribery, it's impact and consequences. As the department notes:

"Foreign bribery results in inefficient allocation of resources and economic distortions. It is a threat to democracy and the rule of law, corrosive of good governance and an impediment to economic development."

The problem, according to a recent symposium in Sydney, is that the laws don't actually have enough teeth. As noted by Independent Australia, "the most compelling message from the conference however was that Australia’s corruption laws are sadly inadequate and the U.S. is therefore poised to reap billions of dollars in penalties and settlements at our expense."

The article explains why:

According to Piper Alderman partner Ted Williams, It only takes one email through a U.S. server, or one capital raising on a U.S. bond market, to put an Australian company in the cross-hairs of the U.S. Department of Justice. That pretty much encompasses most of Australia’s largest companies. We are not talking potentialities either.

There are examples to support this position. Such as the case of BHP Billiton:

BHP Billiton was pursued by the U.S. Securities & Exchanges Commission for seven years over its hospitality arrangements at the 2008 Olympic Games in Beijing. It settled last year for a civil penalty of $US25 million. That might sound like a pittance but there are surely more and bigger cases in the pipeline. This is a first-rate money spinner for the U.S.

And then their other non-U.S. companies that have contributed to the financial windfall:

Among its top enforcement actions, the U.S. struck a $US800 million settlement with German company Siemens in 2008, $US772 million with Alstom (France) and $US679 million with KBR Halliburton in 2014. Eight out of the top ten enforcement actions were made with non-US companies, spurring France and the UK to tighten their laws.

Somewhat amazing, as the article points out, is that Australia, by comparison, has only made one successful prosecution. This has serious implications, as the author explains: Not only does it deprive Australia of potential dollars in enforcement fines, but the lack of action has the deeper and arguably more meaningful problem of putting the economy, and taxpayers, at risk:

The moral hazards are significant, including that no executive perpetrators are ever charged and shareholders pick up the tab for corruption. These sort of deals are responsible for letting Wall Street fraudsters off the hook for the global financial crisis but, to be pragmatic, they work in an economic sense, putting business on notice for corruption and reaping billions for government.

The days of being able to turn a blind eye to corruption are over. And while Australia might not be turning a blind eye per se, its failure to crack down on foreign bribery is costing the country in a multitude of ways. It's time for the nation to bring a stronger approach to the table. The world is watching.