Australia Adopts the Principles of Corruption Prevention in the Private Sector

For the purposes of the relevant documents, a corruption offence is any act (omission) that does or could compromise the integrity, accountability or probity of officials of public administration and organisations, including:

Any conduct of any person that adversely affects, or that could adversely affect, either directly or indirectly the honest or impartial exercise of powers by any staff member, including public officials;
Any conduct of a staff member of an agency that constitutes a breach of public trust;
Abuse of the person’s office;
Any conduct of a staff member of an agency, or former staff member, that constitutes or involves the misuse of information or documents acquired in the person’s capacity as a staff member of an agency.

The respective package of documents includes:

The Fraud and Corruption Rule (hereinafter, the Rule) that is a part of the 2014 Public Governance, Performance and Accountability Rule;
The Fraud and Corruption Policy, (hereinafter, the Policy) that is mandatory for the public administration and is recommended for public organisations;
The Resource Management Guidance 201 – Preventing, Detecting and Dealing with Fraud and Corruption (it was not adopted at the time of publication of the present piece).

The Rule establishes and the Policy clarifies in detail which measures for preventing, detecting and suppressing fraud and corruption should be adopted by the public administration and organisations. In particular, these documents contain the following requirements:

1. Fraud and corruption risk assessments:

Assess, at least every two years or more often if necessary due to potential exposure of an agency (organisation) to fraud and corruption, the character, speed of propagation and seriousness of the detected risks, propensity to risk and tolerance of the agency (organisation) to fraud, corruption and other risks, and in the event of considerable changes in the structure, functions or activities of the agency (organisation);
Define the types of activity, functions or processes of an agency (organisation) that are particularly vulnerable to fraud and corruption and the need and frequency of a targeted risk assessment with regard to it;
Decide on the need to conduct a targeted risk assessment in developing, implementing or revisiting policies, programmes or initiatives of an agency (organisation);
Consult with the agencies (organisations) with which the risks detected in the course of assessment procedures can be associated on the matters of fraud and corruption prevention;

2. Fraud and corruption control plans:

Develop and implement strategies to counter the fraud and corruption risks detected in the course of assessment procedures;
Revise and update the strategies on a regular basis;

3. Effectiveness of controls:

Based on the outcome of assessment of effectiveness of the measures for mitigating risks of corruption and fraud with the aim to enhance it, establish the degree of priority for conducting risk assessments for the types of activity, functions or processes of an agency (organisation) that are particularly exposed to these risks;
In defining the frequency of risk assessments, take account of the character, speed of propagation and seriousness of specific risks and how critical the measures to mitigate them are;
Foresee a reassessment of risks in the strategy to counter fraud and corruption risks if this need arises throughout assessment of effectiveness of the adopted mitigation measures;

4. Structures and processes to mitigate/eliminate fraud and corruption risks:

Establish the structures and maintain the processes in the agency (organisation) aimed at mitigating/eliminating fraud and corruption and other associated risks;
Appoint the officials responsible for fraud and corruption prevention who have appropriate education and maintain the necessary level of qualification to fulfill their functions, and to ensure appropriate conditions for their operation;
Foresee in the documents of an agency (organisation):

General commitment to mitigate/eliminate fraud and corruption risks;
Inadmissibility of fraud and corruption;
A list of measures for mitigating/eliminating fraud and corruption risks;
Mechanisms for preventing, detecting and suppressing fraud and corruption;

5. Promotion of anti-fraud and anti-corruption mechanisms in an agency (organisation):

Ensure that officials at all levels are aware of their obligations to mitigate/eliminate fraud and corruption risks;
Promote the culture of integrity also by obliging officials to undergo training on fraud and corruption prevention upon their appointment and thereafter on a regular basis, where necessary;
Adopt measures to mitigate/eliminate fraud and corruption risks in developing and implementing public initiatives;
Develop and implement measures aimed at countering fraud and corruption in the activities of contractors, consultants or other persons acting for the benefit of the agency (organisation) or on its behalf;

6. Detection of fraud and corruption:

Promote proactive detection of fraud and corruption;
Establish and maintain the channels for reporting offences available also to the persons external to the agency (organisation) such as different third parties, and ensure due protection of whistleblowers from retaliation also in line with National Anti‑Corruption Commission Act of 12 December 2022 No. 88 and Public Interest Disclosure Act of 24 June 2013 No. 133;

7. Investigation and other responses:

Develop and implement internal investigation procedures;
Establish the criteria for adopting decisions with regard to the fraud and corruption instances, including the decision to launch an investigation, forwarding the case to a different agency (organisation), use of civil or administrative remedies or absence of the need of a response;
Inform the Australian Federal Police (AFP) about suspected instances of serious fraud or complex fraud schemes, and notify the National Anti-Corruption Commission (NAAC) about alleged instances of large-scale corruption offences or systemic corruption;
Develop and implement the procedures of administrative, civil and/or criminal investigation also taking account of the requirements of the Australian Government Investigations Standard (AGIS);
Ensure that only the persons qualified in line with the AGIS are involved in the investigation of fraud and corruption;
Submit the evidence gathered in the course of an internal investigation to the Commonwealth Director of Public Prosecutions (CDPP) for indictment;
Carry out investigations with the assistance of other agencies (organisations) that can be affected by the offence;
Repair the material damage inflicted by a fraud and corruption offence committed by an official of the agency (organisation) to the victims;
Envisage a reassessment of risks in the anti-fraud and anti-corruption strategy if such need arises throughout investigations;

8. Reporting and recording:

Define the procedure for recording the instances of fraud and corruption, including suspected ones, and for subsequently storing relevant information;
Forward the information about the risks and detections of the instances of fraud and corruption through the governance mechanisms and processes created to ensure effective oversight and management of such risks;
Cooperate with other agencies (organisations) also in the form of exchange of information and intelligence necessary to prevent, detect and suppress fraud and corruption;
Provide the Australian Institute of Criminology (AIC) with the data for the annual report on fraud and corruption in the public administration and organisations; the information for the AIC report is also submitted by: the AFP and CDPP, with regard to the data on all instances of fraud and corruption investigated in the respective year, and the NAAC, with respect to the data on whistleblowers’ reports and investigations into corruption offences.

The amendments will enter into force on 1 July 2024.