Rules of Trade

A Hot Tip about Justice for Foreigners in Australia

Posted on: 19 Apr 2010


Exporters, on numerous occasions, have to make decisions on a range of financial issues, some of which require them to ask themselves ‘Is this an act of bribery?’ What can often make it worse is pressure from above for the deal to be done and get the money in the bank. How often have we heard the expression ‘all I’m interested is the top line and the bottom line, what goes on in the middle is up to you’. To be fair on those involved it can be a difficult decision and sometimes requires a lot guts to stand up and simply say no. And it could even cost a person their job.

The fact is, though, in 1999, Australia became party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Transactions. Since that time, it has been a criminal offence to bribe a foreign public official, whether in Australia or in another country. Today, Australian law provides for up to 10 years in prison for Australian citizens, residents and companies found guilty of bribing a foreign public official, either in Australia or while in foreign countries.


So it’s by no means a minor matter and begs the question of just how many people doing business offshore are fully aware of the rules, and how many Australian companies have a code of conduct that addresses matters of this nature. I would suggest that it’s probably not very many and that until the Cole Commission, was not really on the radar of many Australian exporters.


What makes this even more important is the fact that the law applies to both individuals and companies. Companies can in fact be held criminally responsible for the conduct of an agent in a range of situations, including where the corporate culture directs, encourages, tolerates or leads to breaches of the legislation or where the company fails to create and maintain a corporate culture that requires compliance with the law.


Not only is bribery of a foreign public official illegal, it can be argued that corruption undermines fair competition and can have disastrous consequences for developing economies, ultimately shrinking the global market for Australian exports and investment. Good governance on the other hand helps to improve Australia’s investment opportunities overseas and reinforces what has for many years been our excellent global reputation as a corruption free trading partner.


In the final event, it’s in everyone’s best interest for companies and individuals exporting or working overseas to know the rules. Nobody should be placed in a position where they have to ask the question ‘Is this an act of bribery?’ Companies need to review the act, understand the definitions of ‘bribery’ and ‘foreign public officials’ and must put in place a code of practice for doing business offshore. They must also invest in training their people and make sure that good governance permeates its way throughout the whole company.


* Ian Murray is executive director of the Australian Institute of Export


Posted: 19 April 2010