– 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 Mineral’s Cambodian gold-mining 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.
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 bio-medical 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 on 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 cooperated 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 have gone a few extra steps. We are reevaluating. 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 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 totaling more than 830 million patacas (about $A100 million).
The case has made headline 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 – Maris Beck & Ben Butler