Late last year, the long-awaited National Anti-Corruption Commission Act 2022 (NACC Act) was passed by parliament. The NACC Act paves the way for the National Anti-Corruption Commission (NACC), expected to be set up by the latter half of this year.
Public officials are, of course, the focal point of NACC. However, given the scope of the legislation, it will have far-reaching implications for those that engage with Government:
- The Act materially changes the accountability landscape for public officials and their engagements with the private sector. It is critical for businesses to understand and work within this changed landscape to ensure the engagement and exchange between the public and private sectors, on which our country depends, is maintained and safeguarded.
- Even if you are not a ‘public official’, you can still be subject to the Act. ‘Contracted service providers’ to the Commonwealth (and their officers, employees and subcontractors) are ‘public officials’ under the Act and therefore are subject to the NACC regime.
- While most businesses will assume that they have ‘nothing to hide’, the mere risk of a NACC investigation and its potential consequences merit a closer look. Businesses and their officers and employees could, in the most severe cases, face compulsory (and potentially public) hearings, be required to produce legally privileged documents, be subject to search warrants, phone taps and even face findings of corruption against them.
We have outlined some key features of NACC and the steps that you can take to protect your employees and officers.
Key takeaway: Get your company NACC ready!
- Raise awareness and provide training: Educate your officers and employees on the NACC Act and provide anti-bribery and corruption training to those who engage or interact with Government.
- Review and update your policies: Ensure your anti-bribery and corruption policies are consistent with the NACC Act and up to date.
- Ensure sub-contractor compliance: Make sure that sub-contractors abide by your anti-corruption policies and principles and are aware of the changed accountability framework.
- Consider contractual risks: Assess contractual risks and include anti-bribery and corruption provisions in your contracts if necessary, including provisions accounting for NACC investigations.
- Audit your engagements with public officials: Review past and present engagements, including those through third parties (e.g. lobbyists), and maintain clear written records going forward.
- Maintain gift, benefit and hospitality registers: Have clear guidelines and written records in relation to the acceptance and distribution of gifts and other benefits.
- Provide internal corruption reporting channels: Set up and maintain confidential and robust reporting channels within your organisation to identify and address risks.
- Set up a response mechanism: Have a plan in place to respond to NACC investigation notices, such as notices to provide information and records.
What is NACC’s scope?
NACC is tasked with investigating serious or systemic ‘corrupt conduct’, including conduct predating the NACC Act. There are two key limbs to what constitutes ‘corrupt conduct’:
- any conduct of a public official that:
- constitutes or involves a breach of public trust,
- constitutes, involves, or is engaged in for the purpose of abuse of the person’s office as a public official, or
- constitutes or involves the misuse of information or documents acquired in the person’s capacity as a public official (or former public official).
- any conduct of a person (incl. public officials) that adversely affects, or could adversely affect, directly or indirectly, the honest or impartial:
- exercise of any public official’s powers as a public official, or
- performance of any public official’s functions or duties as a public official.
The second limb is the ‘influencer’ provision. It applies to the conduct of a person seeking to exert influence or pressure on a public official. It could be relevant to lobbyists and others who seek to influence decision makers, for example in relation to unsolicited proposals.
‘I’m not a public official, am I?’
This is where it gets interesting for private sector suppliers to Government.
A “public official” is a staff member of a Commonwealth agency, a Parliamentarian or a staff member of NACC. However, “staff members of a Commonwealth agency” captures all manner of consultants and contractors (and subcontractors) to Government.
In such cases, company officers and employees may be at risk of being investigated by NACC, which means preparation is essential.
How does NACC find out about corrupt conduct?
Agency heads (e.g. departmental secretaries) must refer corrupt conduct to the Commissioner. However, any person may refer a corruption issue to NACC. This could be anyone, including your employees or officers.
Are whistleblowers protected?
Yes, whistleblowers are protected from reprisals (such as being discriminated against, or dismissal) and legal liability (e.g. claim for breach of contract), provided that a disclosure is not false or misleading.
For example, employee duties of confidentiality (including a direction not to make a NACC disclosure) will not be enforceable against a whistleblower.
A person who is concerned about their identity being known by NACC has the option of making an anonymous voluntary referral. While anonymous referrals can be made, any subsequent statements made to NACC as part of its investigation cannot be anonymous.
Furthermore, a person who knowingly makes false or misleading referrals or statements will be subject to relevant civil, criminal or administrative remedies.
What powers does NACC have?
NACC does not have to investigate corruption, but if it does, it has the benefit of powerful and legally enforceable investigatory tools, akin to those of a Royal Commission. This includes powers to:
- Engage preliminary investigations which may include telecommunications interception and surveillance
- Exercise search powers including warrants
- Hold hearings which are private by default, but may be conducted publicly in ‘exceptional circumstances’ and where it is in the public interest to do so
- Summons a person with relevant evidence of corrupt conduct including limited arrest powers
- Require a person to provide information, documents and records including potentially self-incriminatory and privileged documents
Can information provided to NACC be used in subsequent proceedings?
The Act protects against self-incrimination in recognition of the broad powers of NACC to request information and documents. If a person is required to disclose information or documents of that kind, those will not be admissible in evidence against the person (including corporate bodies) in later proceedings, including criminal proceedings. However, that protection does not apply to a document that is “a record of an existing or past business”.
Disclosing documents to NACC may expose businesses to the risk of those materials being used in subsequent proceedings, including criminal proceedings. While documents cannot be withheld, businesses should seek advice if there are risks of later proceedings.
What happens after a NACC investigation?
NACC will issue an investigation report and make recommendations. It may also disclose information about an investigation if it is satisfied it is in the public interest to do so.
Being named in a report may have reputational consequences, even if the report is not released publicly. The Commissioner may also refer corruption issues to other agencies, including law enforcement agencies.
If you would like to discuss the potential impacts of the National Anti-Corruption Commission Act 2022 to your business, get in touch with one of our KWM experts.