The government has commissioned the Australian Law Reform Commission (ALRC) to undertake a 'comprehensive review of the corporate criminal responsibility regime' with a view to examining how it can be strengthened. More particularly, the ALRC will review Part 2.5 of the Commonwealth Criminal Code, and consider options for reforming this regime or other relevant legislation to strengthen and simplify it. The Review will consider, the findings of the 2019 Report of the Financial Services Royal Commission and the ASIC Enforcement Review Taskforce.

Announcing the Review, Attorney General Christian Porter said that the Review it would ‘consider reforms to the Criminal Code and other relevant legislation to provide a simpler, stronger and more cohesive regime for corporate criminal responsibility’ including consideration of any practical challenges to investigating and prosecuting these crimes.

The inquiry will be led by ALRC president Justice SC Derrington. Justice Robert Bromwich has been appointed as a part-time member of the ALRC to assist with the review.

Terms of Reference — Review of corporate criminal liability

The review will have regard to:

• the corporate criminal responsibility regime in Part 2.5 of the Commonwealth Criminal Code contained in Schedule 1 of the Corporate Criminal Code Act 1995 (Cth) ('the Code'); and
• the complexity of this regime and its challenges as a mechanism for attributing corporate criminal liability.

The Review will consider whether, and if so what, reforms are necessary or desirable to improve Australia's corporate criminal liability regime.

In particular, the ALRC has been tasked with reviewing the following.

The appropriateness and effectiveness of criminal procedure laws and rules as they apply to corporations.

The effectiveness of present Commonwealth criminal procedural laws with a focus on their interaction with state and territory criminal procedural law, particularly in relation to committal hearings.

Possible reform of Part 2.5 of the Criminal Code: The review will consider options for reforming Part 2.5 of the Code or other relevant legislation to strengthen and simplify the Commonwealth corporate criminal responsibility regime.

More particularly, the review will consider:

• the policy rationale for Part 2.5 of the Code;
• the efficacy of Part 2.5 of the Code as a mechanism for attributing corporate criminal liability;
• whether Part 2.5 of the Code needs to incorporate provisions enabling senior corporate officers to be held liable for misconduct by corporations;
• the availability of other mechanisms for attributing corporate criminal responsibility and their relative effectiveness, including mechanisms which could be used to hold individuals (eg senior corporate office holders) liable for corporate misconduct
• options for reforming Part 2.5 of the Code (or other corporate liability regimes) to facilitate implementation of the recommendations made by, or to address issues highlighted by, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and by the ASIC Enforcement Review Taskforce.

The terms of reference state that the ALRC should have regard to existing reports relevant to Australia's corporate accountability system, including reports on: corporate misconduct; corporate criminal law; corporate governance; court procedure which applies in corporate enforcement actions; and law enforcement arrangements relating to corporate misconduct/crime, including the Financial Services Royal Commission Recommendations and the Recommendations of the ASIC Enforcement Review Taskforce.

Process and timeframe

• Process: In accordance with the ALRC’s usual process, a Discussion Paper will be released at an interim stage and interested stakeholders will be invited to make formal submissions in response to the Discussion Paper.
• Call for comment on the terms of reference: The ALRC has opened the Terms of Reference for the inquiry for public comment until 10 May 2019.
• Timeframe for reporting: The ALRC has been tasked with reporting to the Attorney-General by 30 April 2020.

The Australian Institute of Company Directors (AICD) initial statement

In a statement acknowledging the release of the terms of reference for the review, AICD Managing Director and CEO Angus Armour cautioned that any reforms to the ‘corporate criminal responsibility regime should be consistent with established principles of good corporate governance and criminal justice’. The statement suggests that the review should ‘leverage off’ the principles and guidelines, developed by COAG and already in place, to which the Commonwealth, States and Territories are already committed. These principles found that ‘directors should not be liable for corporate fault as a matter of course or by blanket imposition of liability across an entire Act’. Mr Armour said that 'these are important safeguards to prevent individuals being unjustly held liable for criminal offences that can carry with them lengthy terms of imprisonment. As much as the community needs confidence that directors will bear the consequences, I believe that the community equally needs confidence that our system is fair and balanced in its application’.