National Anti-Corruption Commission – who will the NACC nick?

Former NSW Court of Appeal judge the Hon Justice Paul Brereton AM RFD leads the newly established National Anti-Corruption Commission (NACC). Mr Brereton will serve a five year term. He is well-known for leading the landmark inquiry into alleged war crimes committed by Australian soldiers during the Afghanistan war. He is a former army major general and a Member of the Order of Australia for his service to the military.

He will be supported by three deputy commissioners - Nicole Rose PSM, Dr Ben Guantlett and Jaala Hitchcliffe. The NACC’s CEO is Phillip Reed, previously the CEO of NSW Independent Commission Against Corruption.

 

So what is the NACC and why does its operation matter to you in the private sector?

The NACC was established to address practices Australians were no longer willing to tolerate in the federal government and Commonwealth public institutions. Mr Brereton has acknowledged that corruption erodes public trust in government and state institutions and undermines democracy. Mr Brereton wants the NACC to be fearless but fair, independent, and impartial. The NACC Act 2022 gives the NACC great powers, with which Mr Brereton commented comes great responsibility. The NACC will focus on investigating allegations of “systemic or serious” corruption. The terms “serious” and ‘systemic’ are not defined in the NACC Act. Whether corrupt conduct is “serious” or “systemic” will ultimately be a matter to be determined by the NACC.

In deciding whether, and if so how to deal with a matter, the NACC will consider the seriousness and scale of the conduct, whether there is a realistic prospect of finding corrupt conduct, whether there have been other investigations of it, and whether it is preferable that another agency investigate it. The NACC will be concerned with whether, and to what extent, any investigation is likely to add value in the public interest. It may decide to investigate matters to clear the air, even if there does not appear to be a significant prospect of a finding of corrupt conduct. Mr Brereton has also said the NACC would be more likely to pursue current rather than historic matters.

Australia has been recently stirred up by various big stories involving procurement and the use of consultants. The NACC received more than 40 referrals about possible corrupt conduct on its first day of operation. Speculation is rife on what matters will be investigated by the NACC.

The NACC can investigate the conduct of any person (whether or not a public official), so long as the conduct being investigated adversely affects, or could adversely affect, a public official carrying out their official role in a dishonest or biased manner. “Public official” is defined broadly in the NACC Act and includes contracted Commonwealth service providers, and their officers or employees. Meaning private sector companies, their directors, officers, and employees come within the NACC’s investigative purview.

Proactive steps to take if you are a private sector company engaging with government include – understanding the NACC Act, reviewing your anti-bribery and corruption policies, ensuring their proper implementation so that your employees and third party business partners are aware of your organisation’s approach toward combatting bribery and corruption, and understand that they need to comply with these policies, considering whether current public reporting and any procurement concerns including those raised by internal audits concern your company and developing an NACC investigation response plan for your company and its people.

Also, be alert to the fact that legal professional privilege and privilege against self incriminationself-incrimination cannot be used to avoid compliance with NACC notices.

If you would like to seek our advice on training, risks and a NACC investigation response plan please contact Gowri Kangeson, Natalie Caton or John Fogarty. Our team has deep experience in advising on corruption investigations in Australia and as necessary, linking in our global colleagues if there are FCPA or other implications.