Here are five interesting things that happened this month.
Modern Slavery Legislation
Big news for Modern Slavery law in Australia. On 21 June, the Modern Slavery Act 2018 (NSW) was passed in NSW; it is now awaiting assent. The Act creates the position of an independent Anti-slavery Commissioner; it also imposes obligations (creation of a statement, and reporting) for companies with at least one NSW employee and total annual turnover of $50M or more. Penalties apply for failures to comply. The Act also creates obligations for government procurement designed to ensure goods and services supplied to the NSW government are not the product of modern slavery.
Meanwhile, on 28 June, the Modern Slavery Bill 2018 (Cth) was introduced and second read in the House of Representatives. It is not as extensive as the NSW Act, creating obligations for businesses with annual consolidated revenue of $100M or more, but no penalties for non-compliance, and no requirements for government procurement.
EPA Legislation & Enforcement Updates
Victoria has introduced and second read a bill aimed at transforming its Environment Protection Authority: the Environment Protection Amendment Bill 2018. The bill draws heavily on the tools utilised in workplace health and safety and consumer law, including, for example, a WHS-style general duty, breach of which constitutes both an offence and civil wrong subject to pecuniary penalty.
In other environmental law enforcement news, the US EPA is apparently “changing the agency’s top enforcement program into a “compliance initiative” that will “emphasize less punitive responses to pollution by companies.” And its leader since President Trump’s election, Scott Pruitt, has stepped aside.
Up in Queensland, the Brisbane District Court has sentenced Linc Energy to a total fine of $4.5 million for causing serious environmental harm, the largest fine to date under that state’s EPA legislation.
Focussing on Individuals
Steven Brill was interviewed this month by the Corporate Crime Reporter about his new book: Tail Spin: The People and Forces Behind America’s Fifty-Year Fall – and Those Fighting to Reverse It. Some of the interview concerns Brill’s observations about top US prosecutors’ failures to prosecute the individuals implicated in corporate offending, and his views on why the attitude to such prosecutions has changed in a generation.
Here in Australia, the Commonwealth Attorney-General has published his consultation draft of a proposed code of practice, to guide the use of deferred prosecution agreements (DPAs) if the Crimes Legislation Amendment (Combatting Corporate Crime) Bill 2017 passes. It indicates that, as in the UK, “The terms of a DPA will be adapted to the case at hand, and a corporation participating in DPA negotiations will typically be expected to cooperate in any investigation and prosecution against culpable individuals.” (My emphasis).
Co-operation the flavour of the month
A few stories this month about cooperation between regulators indicates an increasingly sophisticated approach being taken to regulatory enforcement. In Scotland, the Scottish EPA and Scottish Health and Safety Executive have launched a joint investigation into ExxonMobil Chemical Ltd and Shell UK Limited, the operators of the Mossmorran petrochemical plants in Fife, which had an unplanned flaring event in June last year.
Meanwhile, the US DOJ has achieved its first coordinated resolution with French authorities in a foreign bribery case, in settling foreign bribery charges against Société Générale S.A., a global financial services institution based in Paris, France, and its wholly owned subsidiary, SGA Société Générale Acceptance N.V.
In fact, this month, the US DOJ flagged to the New York City Bar White Collar Crime Institute that it will, from now on, favour an approach of cooperation with foreign prosecutors in anti-corruption investigation and litigation.
In a good example of inter-state regulatory cooperation, a coalition of 42 US State Attorneys General cooperated in litigation against Citibank for manipulation of the London Interbank Offered Rate (LIBOR); this month, the litigation has resolved to “a $100 million multistate settlement against Citibank for fraudulent conduct”.
Prosecution: On 19th June, the Environmental Protection Agency of Ireland prosecuted Staunton Foods Limited for breaches of conditions of its Industrial Emissions Licence.
Enforceable Undertakings: UK’s Environment Agency has updated its register of EUs: here.
Civil Pecuniary Penalty: ACCC cartel civil litigation against Air NZ concluded this month: “The Court ordered Air NZ to pay a pecuniary penalty of $11.5 million for price fixing in relation to fuel surcharges imposed for cargo from Hong Kong to Australia. An additional $3.5 million penalty is payable for price fixing in relation to the insurance and security surcharge from Singapore to Australia.”
Infringement Notice: “Dreamz Pty Ltd, trading as GAIA Skin Naturals (GAIA), has paid $37,800 in penalties for alleged false or misleading representations after the ACCC issued three infringement notices. GAIA described its Natural Baby Bath & Body Wash, Baby Shampoo and Baby Moisturiser as “Pure ★ Natural ★ Organic”. However, these products contain two synthetic chemical preservatives: sodium hydroxyl methyl glycinate and phenoxyethanol.”
Administrative fine: Germany still doesn’t have a corporate criminal liability regime, but in some cases, prosecutors can apply administrative fines, as they did this month, when German prosecutors “imposed a fine of 1 billion euros, or $1.2 billion, on [Volkswagen] for failing to properly supervise the employees who devised and deployed illegal software in diesel models to evade pollution controls.”