Federal opposition says Australia’s foreign bribery laws are unworkable and ineffective

This article is more than 2 years old

This article is more than 2 years old

Labor has condemned Australia’s foreign bribery laws as “unworkable” and “ineffective” following revelations of widespread corruption by a major Australian government aid contractor.

Guardian Australia reported on Friday that Australian consulting firm Sinclair Knight Merz engaged in the “sophisticated” bribery of high-ranking Vietnam officials to secure work on World Bank-funded aid projects.



Australia handed out millions in aid contracts to company accused of bribery Read more

The firm is also facing criminal prosecution in Australia for conspiring to bribe officials in Vietnam and the Philippines in a period spanning more than a decade.

At the same time, SKM was making significant gains from the Australian government’s foreign aid program, securing 83 contracts worth $489m on projects across the Asia-Pacific.

The shadow justice minister, Clare O’Neill, said Labor would introduce the “toughest anti-bribery laws in Australia’s history”.

O’Neill said Labor would bring in a debarment scheme that would prevent companies involved in foreign bribery from being awarded any further work with the Australian government. The scheme, by shutting companies out of lucrative government contracts, creates a more severe financial punishment for foreign bribery.

Quick guide Sinclair Knight Merz timeline Show Hide 2000-05 According to court documents, Sinclair-Knight Merz employees allegedly bribe officials in the Philippines to gain contracts on a number of World Bank and Asian Development Bank-funded projects between 2000 and 2005

2006-11 According to court documents and a World Bank investigation, Sinclair Knight Merz employees allegedly bribe Vietnamese government officials between 2006 and 2011 to obtain work on a number of World Bank-funded infrastructure projects 2012 Sinclair Knight Merz self-reports corruption allegations to the World Bank. The allegations are investigated by the World Bank’s integrity unit, INT July 2013 The Australian federal police launch an investigation into bribery allegations 24 July 2013 World Bank announces a conditional sanctions agreement with Sinclair Knight Merz, following the company’s self-reporting to the World Bank. The company remains able to bid on World Bank contracts, provided a number of governance and compliance conditions are met by the company 9 September 2013 Jacobs Engineering Group announces merger with Sinclair Knight Merz. Sinclair Knight Merz is maintained as a registered business name in Australia 26 January 2018 The World Bank issues a sanctions decision regarding two individuals allegedly involved with bribery incidents in Vietnam 11 May 2018 Jacobs Group and a number of former executives are issued with a court attendance notice for Australia

“Labor will crack down on companies doing the wrong thing,” O’Neill said. “We will implement stronger enforcement mechanisms and introduce a debarment scheme to ban crooked companies from government contracts.”

“We take corporate crime seriously. We believe more must be done to ensure companies doing the wrong thing are caught and brought to justice.”

The home affairs minister, Peter Dutton, did not respond to requests for comment.

SKM, a firm that has since been bought out, first self-reported evidence of its corruption to the World Bank in 2012. The World Bank holds an information sharing agreement covering integrity cases with the Australian government, making it likely that information on SKM’s actions would have been shared.

Despite this, SKM continued to be awarded contracts with the Australian government, including through the foreign aid program, until the end of 2013.

Anti-corruption group Transparency International has long called for a debarment regime in Australia.

TI Australia’s chief executive, Serena Lillywhite, told Guardian Australia last week that a debarment scheme was needed to strengthen Australia’s anti-bribery regime.

“Currently, there are no transparent policies or guidelines for the debarment of companies or indeed individuals who engaged in foreign bribery associated with Australian government contracts,” she said.

“It’s the view of Transparency International Australia that we need a transparent debarment regime for all government procurement agencies. This was in fact recommended by the OECD during their assessment of Australia as part of our compliance with the OECD regime.”

Sinclair Knight Merz foreign bribery case sparks call for greater police resources Read more

Lillywhite also called for greater resources for the Australian federal police, to help improve the prospects of successful prosecutions in what are often complex cross-border cases.

The criminal case against SKM is still before the courts. The firm no longer exists, but the company that bought it out, US consulting giant Jacobs, has distanced itself from SKM’s past actions.

“The activities reported to authorities by SKM date as far back as 18 years ago, long before Jacobs acquired SKM in December 2013,” a Jacobs spokeswoman said. “In no way does that conduct reflect the ethical business standards and practices of Jacobs.”

• This reporting is supported by the Susan McKinnon Foundation through the Guardian Civic Journalism Trust