Unaoil Bribery Scandal (Global)

HuffPo and Fairfax published the results of their investigation into Unaoil this fortnight, and they aint pretty.  They wrote, “In the list of the world’s great companies, Unaoil is nowhere to be seen. But for the best part of the past two decades, the family business from Monaco has systematically corrupted the global oil industry, distributing many millions of dollars worth of bribes on behalf of corporate behemoths including Samsung, Rolls-Royce, Halliburton and Australia’s own Leighton Holdings.” In the HuffPo explainer, journalists Baumann, Schulberg, Ahmed and Blumenthal allege “Unaoil and its subcontractors bribed foreign officials to help major multinational corporations win contracts, tens of thousands of the company’s internal documents show. The investigation illustrates just how complicit big Western companies are in corruption overseas. It also shows that by enabling corruption, these companies fuel the kind of political instability that allows insurgencies like the self-described Islamic State to grow.”   And it’s not just fuel for political instability.  Bribery also hurts communities because those wielding power make decisions based on self-interest, not the interest of the people of a state.

In recent months, the US DOJ “announced significant enhancements to the Department’s ability to investigate and prosecute [Foreign Corrupt Practices Act] cases. For example, the Criminal Division’s Fraud Section is adding 10 additional prosecutors to its FCPA Unit, increasing the size of that unit by more than 50 percent.  At the same time, the FBI has established three new squads of special agents devoted to FCPA investigations and prosecutions. This should send a powerful message that FCPA violations that might have gone uncovered in the past are now more likely to come to light. And simultaneously, we are strengthening our coordination with foreign counterparts – sharing leads, making available essential documents and witnesses, and more generally working together to reduce criminals’ ability to hide behind international borders. The fruits of this approach can be seen in numerous recent successful prosecutions.”


Submissions Are In For The “Penalties For White Collar Crime” Inquiry (Aus – policy)

There were over fifty submissions; ASIC, the AFP and ACCC were among those contributing.  Among their comments were the following: the ACCC discussed the difficulties it faces dealing with rogue traders, phoenixing companies and defendants and accuseds who fail to attend court, and called for higher maximum penalties in the Australian Consumer Law (penalties for corporations are currently capped at $1.1M); ASIC criticised inconsistencies in the maximum penalties (civil and criminal) that apply to broadly similar conduct subject to different acts of parliament; sought expansion of civil penalty and infringement regimes; called for availability of disgorgement orders in civil penalty proceedings and criticised the expression of maximum penalties as a set dollar amount, given that profits from the misconduct may far exceed those maximum penalties.  Interestingly, the AFP used its submission to call for the introduction of deferred prosecution agreements to Australia, noting their successful use in the US and UK, arguing they are particularly appropriate when companies are very cooperative through the investigation process.  It also detailed some of the difficulties it faces when investigating corporate crime.  The CDPP’s office confined most of its submissions to white collar issues.

Another Company Penalised For False Use Of “Free Range Eggs” Label (Aus – civil)

In litigation before the Federal Court, brought by the ACCC against Derodi Pty Ltd and Holland Farms Pty Ltd, a civil penalty of $300,000 was imposed.  Reasons recorded here.

True Value Reviews (Aus – regulatory)

“Solar energy retailer True Value Solar Pty Ltd (True Value Solar) has ceased offering its customers incentives for publishing positive online reviews, following an investigation by the Australian Competition and Consumer Commission.”

““Businesses that offer incentives for unbalanced positive reviews risk misleading consumers and breaching the Australian Consumer Law,” ACCC Deputy Chair Dr Michael Schaper said.”

Loyal, But Anti-Competitive (Aus – civil)

“Loyal Coal Pty Ltd admits breaching competition law in relation to Mount Penny coal exploration licence tender process”; the ACCC has asked the Federal Court to make declarations accordingly, and is seeking civil pecuniary penalties.

More BBSW Litigation – Westpac Accused Of Unconscionable Conduct (Aus – civil)

ASIC has commenced litigation against Westpac Banking Corporation. “It is alleged that Westpac traded in a manner intended to create an artificial price for bank bills on 16 occasions during the period of 6 April 2010 and 6 June 2012.”

Enforceable Undertakings And ASIC

Researchers at the University of Melbourne have published a paper titled An Empirical Analysis of the Use of Enforceable Undertakings by the Australian Securities and Investments Commission between 1 July 1998 and 31 December 2015.

According to its summary, “This paper analyses enforceable undertakings or formally negotiated settlement agreements between the Australian Securities and Investments Commission (ASIC) and regulated firms and individuals. It reports the findings of an empirical study of 414 enforceable undertakings accepted by ASIC from 1 July 1998 (when ASIC was given the power to accept enforceable undertakings) to 31 December 2015. The first of its kind in size and scope, the study provides detailed insights into ASIC’s deployment of enforceable undertakings to address misconduct issues occurring within its regulatory remit.”

United Kingdom

Costs In Criminal Proceedings (UK – criminal)

This fortnight, the Lord Chief Justice issued a new Practice Direction on Costs in Criminal Proceedings for matters litigated in the magistrates’ courts, the Crown Court, the High Court and the Court of Appeal (Criminal Division).

UK Environment Agency Publishes Latest Civil Penalties (UK – civil)

20 civil penalties are reported in the latest newsletter; they include a £73,161.35 penalty for the Ministry of Defence’s contravention of its Greenhouse Gas Emissions Permit, constituted by a failure to “surrender sufficient allowances to cover its annual reportable emissions from the [Brize Norton] installation”, and a £1,699.04 penalty for Her Majesty’s Prison Service, for a similar breach.

United States

Deep, Deepwater, Deep, Deep Trouble (USA)

““The approval of this agreement will open a final, hopeful chapter in the six-year story of the Deepwater Horizon tragedy,” said Attorney General Loretta Lynch.  “Today’s action holds BP accountable with the largest environmental penalty of all time while launching one of the most extensive environmental restoration efforts ever undertaken.”

A week after this announcement, zoologists published findings regarding ongoing dolphin morbidity and mortality in the Northern Gulf of Mexico, linking the Deepwater spill to significant increases in dolphin stillbirths, and baby dolphin infections.

Hazardous Arts And Crafts Spray Removed From Market (USA)

The US EPA has worked cooperatively with business to investigate the safety of trichloroethylene (“TCE”) for use in arts and crafts.  “The TCE spray fixative product was used by artists, picture framers, graphic designers and printers to provide a water repellant and protective finish.  EPA’s June 2014 Work Plan Chemical Risk Assessment for TCE identified health risks associated with several TCE uses, including the arts and craft spray fixative use, aerosol and vapor degreasing, and as a spotting agent in dry cleaning facilities. In 2015, EPA worked with the only U.S. manufacturer of the TCE spray fixative product, PLZ Aeroscience Corporation of Addison, Illinois, resulting in an agreement to stop production of the TCE containing product and to reformulate the product with an alternate chemical.”

Not So Ready-To-Eat Cheese (USA)

“The district court’s Oct. 20, 2015, decision concluded that inspections by the FDA in 2013 showed that Serra Cheese repeatedly introduced adulterated cheese into interstate commerce and caused the cheese to become adulterated while held for sale after shipment in interstate commerce.  … Listeria innocua was present in numerous locations throughout Serra Cheese’s facility.  Analysis of other samples showed significant levels of non-pathogenic E. coli in the finished cheese products, indicating exposure of the products, directly or indirectly, to feces.”

The DOJ has secured an injunction requiring Serra Cheese “to take specific steps to remedy the violations found by the court”.

Criminal Use Of Banned Pesticides To Fumigate Homes (USA)

“The facts in this case show the Terminix companies knowingly failed to properly manage their pest control operations in the U.S. Virgin Islands, allowing pesticides containing methyl bromide to be applied illegally and exposing a family of four to profoundly debilitating injuries.  While on probation the companies are required to demonstrate to the EPA changes to their internal management and systems to ensure this type of tragedy does not reoccur.”

“In a plea agreement, TERMINIX LP and TERMINIX, USVI agreed to pay a total of $10 million in criminal fines, community service and restitution payments.”

Art And Law Fighting Human Trafficking Together (USA)

Monique Villa and Cyrus Lance spoke this fortnight about the extent of labour trafficking in corporate supply chains, and the difficulties inherent in its detection and elimination, noting some recent legislative efforts to address this.  Villa and Lance, with others, are supporting the inaugural Stop Slavery Award, designed to encourage corporations to eliminate forced labour from their supply chains.  The winner will receive a work by Anish Kapoor – I’m already jealous.


First Round Table On Marine Litter (Germany)

The German Environment Agency (UBA), in cooperation with two German ministries “convened some 50 experts from specialist departments, scientific organizations, fishery and environmental associations to a first session in Berlin today” to discuss solutions to marine litter.

“The Round Table will coordinate national measures and push forward their implementation. … Their aims include ensuring that fishing gear such as nets are not discarded at sea. The first talks with the fishing industry are in progress. The use of in industrial applications and in personal care products and cosmetics in particular microplastics is to be halted. This is the aim of the dialogue on cosmetics which the Federal Ministry for Environment, UBA and the Convention for the Protection of the Marine Environment of the North-East Atlantic (OSPAR) is engaged in with the industries concerned. A voluntary commitment by the retail sector to reduce the use of plastic bags, in addition to a new recycling law with higher quotas for plastic waste, would also ensure the prevention of plastic waste in the environment.”