Hopes for Prosecution

AUSTRALIAN companies that pay foreign officials "facilitation payments" to speed up doing business overseas are breaking state bribery laws, the Organisation for Economic Co-operation and Development has found. OECD Report PDF download.

Under commonwealth law, companies can claim a tax deduction for facilitation payments. Large public companies such as BHP Billiton have guidelines covering such payments.

We recently noted in Prosecutions unlikely that international law expert Don Rothwell doubted prosecutions would occur in this scandal, because there is no Commonwealth law in place. However, we now learn…

The OECD consulted leading anti-corruption lawyers and the Law Society of NSW and Law Council of Australia and was told that "nearly all acts amounting to facilitation payments under the Commonwealth Criminal Code are prohibited under most state criminal codes".
"Thus what amounts to a defence under the Commonwealth Criminal Code is prohibited under state law. Since state laws have an extraterritorial reach, the conflict does not just exist in respect of offences that take place in Australia," the OECD report says.

Time will tell, these slippery characters have ways of sneaking out from under. On the other hand, having failed to protect major corporations BHP Billiton and BP Petroleum from exposure for their roles in this corruption, AWB CEO Andrew Lindberg has destroyed his corporate future.
As to the Howard Government, who seem intent on defending corporate corruption as a necessary part of doing International trade, we expect life has just become a lot tougher on the word trade stage. They might be able to dodge bullets at home but there are still plenty of competitors out there gunning for them.