January 13, 2013
THE Australian Federal Police will reopen corruption
inquiries into major Australian companies OZ Minerals and Cochlear,
after searing criticism that it was lax in its investigations.
The OECD reported in October that it was ''seriously
concerned'' about the ''extremely low'' enforcement of
anti-foreign-bribery laws in Australia.
The head of the AFP's special references unit, Commander
Errol Raiser, said last week: ''We are going to review a medical
equipment case and [what the OECD called] the joint-venture-buyout
case.''
Fairfax Media understands Cochlear is the medical equipment
company and has confirmed Australian miner OZ Minerals is the company
referred to by the OECD in the buyout case. OZ Minerals will be targeted
following discussions with the OECD about the AFP's previous
investigation of alleged foreign bribery in OZ Minerals' Cambodian
goldmining operations.
In 2011, The Cambodia Daily newspaper alleged OZ Minerals
paid more than $US1 million to three women on the board of its
joint-venture partner Shin Ha when it bought the company in 2009. The
women were closely related to Cambodian officials, some of whom worked
in the mining ministry, the newspaper alleged.
According to the OECD report, Australian Federal Police
dismissed the allegations before a formal investigation was opened
''because it received information from the AFP's overseas network that
the transaction had been undertaken with due diligence and that all
payments were made at the joint venture partner's request''.
''The AFP did not inquire into key matters that could have
corroborated the allegations, such as whether the board members were
indeed related to foreign public officials; the due diligence conducted
by the company was sound; and the buyout proceeds were channelled to the
board members.''
It said the case ''concretely illustrates'' concerns ''the
AFP may have closed … cases before thoroughly investigating the
allegations''.
Asked about the Cambodia case last week, an OZ Minerals
spokeswoman said: ''I can't comment without knowing why the AFP would
reopen the case … even if it relates to us.''
It is understood police will also probe biomedical giant
Cochlear after allegations were revealed in a Portuguese prosecution
that the Australian company, its Swiss subsidiary and its local
distributor were involved with alleged bribes to influence a public
hospital's medical supplies tender in 2004. The OECD, which did not
mention the case in its report, is understood to be facilitating
high-level information exchange between Portugal and Australia to
kick-start the new inquiries.
According to one of Portugal's leading newspapers, Jornal de Noticias,
seven people were accused of offering or accepting family holidays to
Disneyland and Italy in exchange for influencing the decision to award
the €1.2 million supply contract.
A Cochlear executive was among those charged, the paper reported, along with an employee from the distributor and three doctors.
The allegations were reported to the Australian
Attorney-General's Department by 2011. Most, but not all, of the accused
were reportedly acquitted in May 2011.
A Cochlear spokesman said: ''One ex-Cochlear employee was
convicted and has appealed. We believe Cochlear Ltd would not have a
case to answer as we understand the matter is outside the jurisdiction
of the AFP.''
He said Cochlear had co-operated with all inquiries and kept
the services of the distributor, which he said was Widex Reabilitacao
Auditiva Lda.
Regarding the two reopened inquiries, Commander Raiser did
not name companies but said: ''We could've gone a few extra steps. We
are re-evaluating. That doesn't mean we are going to open a whole new
investigation. [We are ensuring] there is no stone unturned, that
reasonable inquiries have been made.''
The OECD, which said Australian companies were highly
exposed, reported 28 instances of alleged foreign bribery involving
such companies. It criticised the actions taken by federal police and
corporate regulator the Australian Securities and Investments Commission
in many of the cases.
The Reserve Bank note-printing scandal has been the only
criminal prosecution since Australian foreign anti-bribery laws were
introduced in 1999. The OECD did not name any companies but Fairfax
Media's investigations have identified and confirmed most of those
involved.
Among the cases never investigated by the AFP is the case of
two casinos in Macau part-owned by James Packer's Crown Limited, which
were named in criminal proceedings against corrupt official Ao Man Long.
However, the AFP referred the Crown allegations back to Macau
authorities.
Ao, who was secretary for transport and public works in the
former Portuguese colony, is serving a 29-year jail sentence for taking
dozens of bribes totalling more than 830 million patacas (about $A100
million).
The case has made headlines in Macau and Hong Kong since Ao
was charged in 2006, but the OECD report reveals it was never
investigated by federal police despite prosecutors listing the Crown
Macau and City of Dreams casinos among 10 ''suspect sites'' in court
documents in 2009.
Crown owns a third of Melco Crown Entertainment, the operator
of the two casinos, in a joint venture with Hong Kong billionaire
Stanley Ho. Mr Packer and Crown chief executive Rowen Craigie sit on the
MCE board.
A Crown spokeswoman said that ''Crown (including its
directors) has not been contacted by the AFP or any other law
enforcement or regulatory agency'' over the Macau bribery case.
The OECD report also revealed that a new probe had been
launched on the back of a terminated investigation into phosphate mining
company Getax. A previous probe, which the report said was closed for
''lack of jurisdiction'' in September 2011, examined claims that a part
of the company incorporated overseas had bribed MPs in Nauru to obtain
mining permits.
The report said: ''In the course of investigation, a number
of unrelated financial transactions by the company were identified as
suspicious … [which] enabled the AFP to establish a separate evaluation
into other possible foreign bribery offences, which is ongoing.''
Getax declined to comment.
The OECD was evaluating Australia's implementation of the
OECD anti-bribery convention. Corporate regulator ASIC declined to
comment on the organisation's criticism of it.
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