High Court to hear appeal on calculation of foreign bribery penalties

Posted on December 18, 2022

The High Court of Australia has agreed to hear an appeal by the Crown about how penalties for foreign bribery are calculated. In particular, the appeal will consider how the ‘value of the benefit’ of foreign bribery under the federal Criminal Code is measured – is the maximum penalty to be measured by the gross benefit (for example, the contract price) or the net benefit (the contract price less the costs of performing it).   

The appeal relates to foreign bribery convictions for conduct which Sinclair Knight Merz, later acquired by Jacobs Group, committed in Vietnam and the Philippines from 2000 to 2012 to secure public infrastructure contracts. The company pleaded guilty to three offences and, at sentencing, the Court considered the ‘value of the benefit’ received from the offending to be the company’s opportunity for monetary gain from performance of the relevant contracts. By extension, there would be no ‘benefit’ to an offender who broke even or made a loss from performance of improperly awarded contracts.

In July this year, the NSW Court of Criminal Appeal dismissed an appeal from the Crown asserting that the sentencing judge erred in the construction of the ‘value of the benefit’. The Crown’s position on appeal was that the ‘value of the benefit’ should be measured by reference to the gross benefit received (the contract price) regardless of whether a profit was actually made.  

On 10 November 2022, the High Court granted special leave to hear the matter. The Court’s decision will likely provide certainty on this point and affect the way penalties are calculated for a variety of bribery offences going forward. The appeal is The King v Jacobs Group (Australia) Pty Ltd formerly known as Sinclair Knight Merz (S148/2022).

The BPN has prepared a case study of an organisation engaging in foreign bribery while operating in a high-risk jurisdiction, including best practice principles and questions to consider. Find it here