Enforceable undertakings’ practices across Australian regulators: lessons learned

ABSTRACT

An enforceable undertaking is a regulatory sanction available to a range of Australian Federal and State regulators. This sanction takes the form of a settlement that allows the regulator to remedy alleged breaches of the law. It had been deemed a success in Australia and as such has been introduced in other jurisdictions such as the United Kingdom and New Zealand. However, this sanction has been heavily criticised over the last few years in Australia due to its lack of accountability and opaqueness in certain settings. In view of the fact that enforceable undertakings have been relied on in Australia for over a decade (in certain instances closer to three decades) this article compares 18 Australian Federal and State regulators’ practices, to put forward recommendations on best practices that may be adopted by these and other agencies that have this power at their disposal.

KEYWORDS:

• Enforceable undertaking
• regulation
• accountability
• transparency

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes on contributor

Dr Marina Nehme is an Associate Professor at the University of New South Wales Sydney, Australia. Her research areas are the following: regulation, enforceable undertakings, crowd equity funding and legal education. Email: [email protected]

Notes

1 See, eg, s 87B(1) of the Competition and Consumer Act 2010 (Cth) and ss 93AA(1) and 93A(1) of the Australian Securities and Investments Commission Act 2001 (Cth).

2 Trade Practices Legislation Amendment Act 1992 (Cth) s 13.

3 Financial Sector Reform(Amendments and Transitional Provisions)Act 1998 (Cth), Schedule 1.

4 See, eg, Department for Business, Energy and Industrial Strategy (UK), Code of Practice on Labour Market Enforcement Undertakings and Orders (November 2016); Department for Business, Energy and Industrial Strategy (UK), Office for Product Safety and Standards: Enforcement Policy (May 2019) Annex D; Office of Gas and Electricity Markets (UK), Enforcement Guidelines (10 October 2017) 20–1; Environment Agency (UK), Environment Agency Enforcement and Sanctions Policy (Policy Paper, 10 January 2019) <https://www.gov.uk/government/publications/environment-agency-enforcement-and-sanctions-policy/environment-agency-enforcement-and-sanctions-policy>.

5 See, eg, ‘Enforceable Undertakings’, WorkSafe (NZ) (Web Page) <https://worksafe.govt.nz/laws-and-regulations/enforceable-undertakings/>; ‘Enforceable Undertakings’, Maritime New Zealand (Web Page) <https://www.maritimenz.govt.nz/commercial/safety/health-and-safety/enforceable-undertakings.asp>.

6 A number of these criticisms will be referred to and discussed later on in the paper. See, eg, Australian National Audit Office, Administration of Enforceable Undertakings (Auditor-General Report No. 38, 2 June 2015); Commonwealth of Australia, Royal Commission into Misconduct in the Banking Superannuation and Financial Services Industry, Interim Report (28 September 2018).

7 See, eg, Corporations (Aboriginal and Torres Strait Islander) Amendment (Strengthening Governance and Transparency) Bill 2018 (Cth) cl 212.

8 That section provided that the ACCC could ‘accept a written undertaking … in connection with a matter to which [it had] a power or function under this Act’; and that the ACCC’s consent was required for withdrawal of an undertaking; that if the ACCC considered the terms of the undertaking to have been breached it could apply for a Court order for compliance with that term, repayment of any financial benefit incurred via the breach, compensation, or any other order the Court considered appropriate: Trade Practices Act 1974 (Cth) ss 87B(1)-(4). These powers continue, now expanded to allow consumer data and merger authorisation undertakings, in the Competition and Consumer Act 2010 (Cth) s 87B.

9 See for example, Australian National Audit Office, Administration of Enforceable Undertakings: Australian Securities and Investments Commission (2014–2015) <https://www.anao.gov.au/sites/default/files/ANAO_Report_2014-2015_38.pdf>.

10 Other Federal and state regulators have this sanction at their disposal for a shorter period. See for example: Australian Charities and Not For Profit Commission Act 2012 (Cth), Division 90; Work Health and Safety Act 2011 (NSW) s 230; Work Health and Safety Act 2012 (SA) s 216.

11 Other Federal and State Regulators have had this sanction for a shorter period of time. See for example: Australian Charities and Not For Profit Commission Act 2012 (Cth), Division 90; Work Health and Safety Act 2011 (NSW) s 230; Work Health and Safety Act 2012 (SA) s 216.

12 There are some explireeeeeet5cit exceptions: For example, Comcare cannot accept an EU if the alleged conduct relates to a ‘category 1’ offence: Work Health and Safety Act 2011 (Cth) s 216(2). A similar limitation is in place for other work, health and safety regulators such as Access Canberra (Work Health and Safety Act 2011 (ACT) s 216(2)), WorkCover (Qld) (Work Health and Safety Act 2011 (Qld) s 216(2). An EU also cannot be accepted for a category 2 offence if the breach resulted in the death of a person or for an offence against Part 2A of the Act), and WorkSafe (Tas) (Work Health and Safety Act 2012 (Tas) s 216(2)).

13 Elizabeth Fisher, ‘Transparency and Administrative Law: A Critical Evaluation’ (2010) 63(1) Current Legal Problems 272, 274.

14 Adam Tomkins, ‘Transparency and the Emergence of a European Administrative Law’ (1999) 19(1) Yearbook of European Law 217, 219–20.

15 Fisher (n 13) 276.

16 Ibid 277.

17 Louis D Brandeis, ‘What Publicity Can Do’ (December 20, 1913) Harper’s Weekly 10, 10 <http://3197d6d14b5f19f2f440-5e13d29c4c016cf96cbbfd197c579b45.r81.cf1.rackcdn.com/collection/papers/1910/1913_12_20_What_Publicity_Ca.pdf>.

18 The regulator’s decision to accept or reject entering into an EU can be subject to judicial review, but this has rarely happened and when it has occurred the application was not successful: See, eg, Richard Johnstone and Michelle King, ‘A Responsive Sanction to Promote Systematic Compliance?: Enforceable Undertakings in Occupational Health and Safety Regulation’ (2008) 21(3) Australian Journal of Labour Law 280, 306.

19 Christine Parker, ‘Arm-Twisting, Auditing and Accountability: What Regulators and Compliance Professionals Should Know about the Use of Enforceable Undertakings to Promote Compliance’ (Paper presented to the Australian Compliance Institute, Melbourne, 28 May 2002) 15.

20 See, eg, Australian National Audit Office, Administration of Enforceable Undertakings (n 6).

21 Ibid 24.

22 Ibid 52.

23 Ibid.

24 Ibid 82.

25 Max Weber, Economy and Society: An Outline of Interpretive Sociology (University of California Press 1968) 992.

26 Mark Fenster, ‘The Transparency Fix: Advocating Legal Rights and Their Alternatives in the Pursuit of a Visible State’ (2012) 73 University of Pittsburgh Law Review 443, 446.

27 Karen Yeung, The Public Enforcement of Australian Competition Law (Australian Competition and Consumer Commission 2001) 113.

28 Marina Nehme, ‘Enforceable Undertakings: Are they Procedurally Fair?’ (2010) 32 Sydney Law Review 471, 476.

29 Ibid.

30 Christine Kaufman and Rolf Weber, ‘The Role of Transparency in Financial Regulation’ (2010) 13(3) Journal of International Economic Law 779, 781.

31 ACCC, Section 87B of the Trade Practices Act: A Guideline on the Australian Competition and Consumer Commission’s use of Enforceable Undertakings (August 1999). Now: ACCC, Section 87B of the Competition and Consumer Act: Guidelines on the Use of Enforceable Undertakings by the Australian Competition and Consumer Commission (April 2014) <https://www.accc.gov.au/system/files/Guide%20to%20Section%2087B.pdf> (Section 87B Guidelines).

32 ACCC, Annual Report 1999–2000 (Report 2000) 122, 223, <https://www.accc.gov.au/system/files/ACCC%20Annual%20report%201999-2000.pdf>.

33 Work Health and Safety Act 2011 (ACT) s 230(3b).

34 Work Health and Safety Act 2011 (Qld) s 230(3b).

35 Work Health and Safety Act 2012 (Tas) s 230(3b).

36 Environment Protection Act 1970 (Vic) s 67F(2).

37 Australian Securities and Investments Commission, Enforceable Undertakings (Regulatory Guide No 100, February 2015).

38 Civil Aviation Safety Authority (Cth), Enforcement Manual (December 2018) ch 5.

39 Australian Communications and Media Authority, Enforceable Undertakings (Regulatory Guide No 1, December 2017).

40 Therapeutic Goods Association (Cth), Enforceable Undertaking Guidelines (September 2019) <https://www.tga.gov.au/publication/enforceable-undertaking-guidelines>.

41 Environment Protection Authority (NSW), Guidelines on Enforceable Undertakings (February 2017).

42 OFT Qld, Enforceable Undertaking Policy (19 September 2019) <https://www.publications.qld.gov.au/dataset/oft-corporate-documents/resource/b6b9bbc1-566d-4419-816d-c62571c5ff9e>.

43 ‘Enforcement’, Australian Prudential Regulation Authority (Web Page) <https://www.apra.gov.au/enforcement>.

44 ‘List of Enforcement Actions Taken’, Australian Transaction Reports and Analysis Centre (Web Page, 1 July 2019) <https://www.austrac.gov.au/lists-enforcement-actions-taken>; ‘Consequences of Not Complying’, Australian Transaction Reports and Analysis Centre (Web Page, 7 July 2019) <https://www.austrac.gov.au/business/how-comply-and-report-guidance-and-resources/consequences-not-complying>.

45 ‘Enforceable Undertakings’, Fair Work Ombudsman <https://www.fairwork.gov.au/about-us/our-role/enforcing-the-legislation/enforceable-undertakings>.

46 Australian Charities and Not-for-profits Commission, Commissioner’s Policy Statement: Compliance and Enforcement (Document No. CPS 2013/1 2013) 6 <https://www.acnc.gov.au/sites/default/files/Download%20statement%20on%20Compliance%20and%20enforcement%20%5BPDF%20189KB%5D.pdf>; ‘Enforceable Undertaking’, Australian Charities and Not-for-profits Commission (Web Page) <https://www.acnc.gov.au/tools/topic-guides/enforceable-undertaking>.

47 ‘About Enforceable Undertakings’, Consumer Affairs Victoria (Web Page) <https://www.consumer.vic.gov.au/about-us/regulatory-approach-and-compliance-policy/our-compliance-policy/about-enforceable-undertakings>.

48 ‘Enforceable Undertakings’, Office of Fair Trading NSW (Web Page) <https://www.fairtrading.nsw.gov.au/about-fair-trading/data-and-statistics/compliance-and-enforcement-data/enforceable-undertakings>.

49 Marina Nehme, Jessica Anderson, Olivia Dixon and Dimity Kingsford Smith, The General Deterrence Effects of Enforceable Undertakings on Financial Services and Credit Providers (Report, UNSW Centre for Law, Markets and Regulation 2018) 24 <https://download.asic.gov.au/media/4916053/18-325mr-deterrence-effects-of-enforceable-undertakings-on-financial-services-and-credit-providers.pdf>.

50 Ibid 32.

51 Therapeutic Goods Act 1989 (Cth) s 42YL.

52 This is usually done after deleting any information that may be commercial in confidence, against the public interest to release or that contains the personal details of an individual Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) s 197(5).

53 Civil Aviation Act 1988 (Cth) s 30DK(4).

54 ‘Enforceable Voluntary Undertakings’, Civil Aviation Safety Authority (Web Page) <https://www.casa.gov.au/standard-page/enforceable-voluntary-undertakings>.

55 ‘Compliance Undertaking’, Therapeutic Goods Administration (Web Page) <https://www.tga.gov.au/compliance-undertaking>; ‘List of Enforcement Actions Taken’, AUSTRAC (Web Page) <https://www.austrac.gov.au/lists-enforcement-actions-taken>.

56 ‘Enforceable undertakings register’, ASIC (Web Page) <https://asic.gov.au/online-services/search-asics-registers/additional-searches/enforceable-undertakings-register/>.

57 ‘Enforceable undertaking register’, APRA (Web Page) <https://www.apra.gov.au/enforceable-undertakings-register>.

58 ‘Enforceable undertakings accepted by the ACMA’, ACMA (Web Page) <https://www.acma.gov.au/enforceable-undertakings-accepted-acma>.

59 ‘Enforceable undertakings’, Fair Work Ombudsman (Web Page) <https://www.fairwork.gov.au/about-us/our-role/enforcing-the-legislation/enforceable-undertakings>.

60 ‘Enforceable Undertakings’, EPA NSW (Web Page) <https://apps.epa.nsw.gov.au/prpoeoapp/SearchEnforceableUndertaking.aspx>.

61 ‘Enforceable undertakings’, EPA Victoria (Web Page) <https://www.epa.vic.gov.au/our-work/compliance-and-enforcement/enforceable-undertakings>.

62 ‘Approved enforceable undertakings’, Access Canberra (Web Page) <https://www.accesscanberra.act.gov.au/app/answers/detail/a_id/3044/~/act-work-health-and-safety-regulator-enforceable-undertakings#!tabs-6>.

63 ‘Enforceable undertakings list’, WorkCover Queensland (Web Page) <https://www.worksafe.qld.gov.au/laws-and-compliance/enforceable-undertakings/enforceable-undertakings-list>.

64 While WorkSafe Tas has not accepted any EUs as of yet, their policy indicate that they will be following some of the ACCC’s practices: WorkSafe Tas, ‘WHS Undertakings: An Overview’ 8, <https://worksafe.tas.gov.au/__data/assets/pdf_file/0004/545782/WHS-Undertaking-Overview.pdf>.

65 ‘Prosecution Result Summaries and Enforceable Undertakings’, WorkSafe Victoria (Web Page) <https://www.worksafe.vic.gov.au/prosecution-result-summaries-enforceable-undertakings>.

66 NSW Fair Trading, Register of Enforceable Undertakings (8 August 2019) <https://www.fairtrading.nsw.gov.au/__data/assets/pdf_file/0008/371798/Enforceable-Undertakings-Register-2019-08-15.pdf>.

67 ‘Enforceable undertakings register’, Queensland Government (Web Page) <https://www.qld.gov.au/law/laws-regulated-industries-and-accountability/queensland-laws-and-regulations/check-a-licence-association-charity-or-register/enforceable-undertakings-register>.

68 ‘Latest News: Enforceable Undertakings’, Consumer Affairs Victoria (Web Page) <https://www.consumer.vic.gov.au/latest-news?Category={534A069C-6B50-4C62-8CD9-2E5BF6633919}>; ‘Enforceable undertakings list’, WorkCover Queensland (Web Page) <https://www.worksafe.qld.gov.au/laws-and-compliance/enforceable-undertakings/enforceable-undertakings-list>.

69 Each EU summary includes the name of promisor, date, duration, provision/s in relation to which undertaking was made, summary of undertakings given: NSW Fair Trading, Register of Enforceable Undertakings (8 August 2019) <https://www.fairtrading.nsw.gov.au/__data/assets/pdf_file/0008/371798/Enforceable-Undertakings-Register-2019-08-15.pdf>.

70 ‘Enforceable undertakings register’, Queensland Government (Web Page) <https://www.qld.gov.au/law/laws-regulated-industries-and-accountability/queensland-laws-and-regulations/check-a-licence-association-charity-or-register/enforceable-undertakings-register>.

71 See, eg, the EUs on ACMA’s website: ‘Enforceable undertakings accepted by the ACMA’, ACMA (Web Page) <https://www.acma.gov.au/enforceable-undertakings-accepted-acma>.

72 Frederick Schauer, ‘Transparency in Three Dimensions’ (2011) 2011 University of Illinois Law Review 1339, 1344.

73 Ibid 1345.

74 See for example, Nehme et al., The General Deterrence Effects (n 50) 38.

75 Access Canberra, Enforceable Undertakings General Guidelines (Guidelines 2018) <https://www.accesscanberra.act.gov.au/ci/fattach/get/199764/1520221400/redirect/1/filename/Enforceable+undertakings+-+Overview.pdf>.

76 Access Canberra, Enforceable Undertakings - Information for Injured Persons, Next of Kin or Guardians (Guidance Note 125) <https://www.accesscanberra.act.gov.au/ci/fattach/get/104023/1474326058/redirect/1/filename/Enforceable+undertakings+-+Information+for+injured+persons%2C+next+of+kin+or+guardians.pdf>.

77 Access Canberra, Enforceable Undertakings - Information for Auditors (Guidance Note 124) <https://www.accesscanberra.act.gov.au/ci/fattach/get/104027/1474326212/redirect/1/filename/Enforceable+undertakings+-+Information+for+auditors.pdf>.

78 Nehme et al., The General Deterrence Effects (n 50) 37.

79 Ibid.

80 Work Health and Safety Act 2011 (Cth) s 217(2).

81 Work Health and Safety Act 2011 (ACT) s 230(3b).

82 Work Health and Safety Act 2011 (NSW) s 230(4).

83 Work Health and Safety Act 2011 (Qld) s 230(3b).

84 Work Health and Safety Act 2012 (SA) s 230(3b).

85 Work Health and Safety Act 2012 (Tas) s 230(3b).

86 SafeWork NSW’s website, for example, contains an ‘Enforceable undertakings’ page, which includes an explanation of the purposes of EUs, examples of EU terms, and summaries of EU procedures; a link to the EU guidelines; and links to all accepted EUs and their notices, organised by year: Safework NSW, ‘Enforceable undertakings’ <https://www.safework.nsw.gov.au/compliance-and-prosecutions/enforceable-undertakings>. Its EU notices are written in plain English (albeit with some references to relevant legislative provisions) and contain links to the undertakings in full: see, eg, Safework NSW, ‘Enforceable undertakings: Holcim (Australia) Pty Ltd’ (13 November 2019) <https://www.safework.nsw.gov.au/compliance-and-prosecutions/enforceable-undertakings/2019-eu-accordion/holcim-australia-pty-ltd>.

87 Nehme et al., The General Deterrence Effects (n 50) 20–1; also see Marina Nehme, ‘Enforceable Undertaking and its Impact on Private Lawsuit’ (2008) 11 Australian Journal of Corporate Law 275.

88 This review has been conducted by analysing all the EUs that have been accepted by the 18 regulators that are the focus of this study: Marina Nehme, Comparative Research into the Use of Enforceable Undertakings (ASIC report 2018).

89 See, eg, Consumer Affairs Victoria’s December 2017 EU with MRK Distributor Pty Ltd requiring, among other penalties, that it initiate voluntary product recalls and provide refunds for sales of prohibited novelty cigarette lighters: Consumer Affairs Victoria, MRK Distributor Pty Ltd and Mounir Kassabian - Enforceable undertaking (15 December 2017) <https://www.consumer.vic.gov.au/latest-news/mrk-distributors-pty-ltd-and-mounir-kassabian-enforceable-undertaking>.

90 See, eg, ACMA’s April 2019 EU with Brand Link Media Pty Ltd, requiring that it appoint an independent consultant to review internal policies, procedures and systems, among other things: ACMA, Brand Link Media Pty Ltd Enforceable Undertakings (April 2019) 3 <https://www.acma.gov.au/sites/default/files/2019-11/Brand%20Link%20Media%20Pty%20Ltd%20enforceable%20undertaking%20-%20April%202019%20pdf.pdf>.

91 Haig Patapan, ‘Separation of Powers in Australia’ (1999) 34(3) Australian Journal of Political Science 391, 391.

92 R v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254, 274–5 (Dixon CJ, McTiernan, Fullagar and Kitto JJ). For a discussion on this, see for example J M Finnis, ‘Separation of Powers in the Australian Constitution – Some Preliminary Considerations’ (1967) 3 Adelaide Law Review 159.

93 Waterside Workers Federation of Australia v JW Alexander Ltd (1918) 25 CLR 434, 442 (Griffith CJ).

94 See, eg, ibid 444–5 (Griffith CJ).

95 For more discussion on the nuances attached to this, see for example: Chu Kheng Lim v Minister for Immigration (1992) 176 CLR 1, 28 (Brennan, Deane and Dawson JJ), cited by North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 256 CLR 569, 592–3 [37] (French CJ, Kiefel and Bell JJ); Kamm v State of New South Wales [No 4] (2017) 95 NSWLR 179, 189–90 [46]–[54] (Beazley P).

96 Australian Law Reform Commission, Compliance with the Trade Practices Act 1974 (Report No 68. 1994) 38.

97 Commonwealth of Australia, Royal Commission into Misconduct in the Banking Superannuation and Financial Services Industry Final Report (Commonwealth 2018) 452. Comonwealth of Australian, (n 6) 296.

98 Deborah Murphy, Ronald Shrives and Samuel Tibbs, ‘Understanding the Penalties Associated with Corporate Misconduct: An Empirical Examination of Earnings and Risks’ (2009) 44(1) The Journal of Financial and Quantitative Analysis 55.

99 Nehme et al., The General Deterrence Effects (n 50) 21.

100 Ibid.

101 Ibid 24.

102 See City of Collingwood v Victoria [No 2] [1994] 1 VR 652, 663 (Brooking J) 671 (Southwell and Teague JJ agreeing); Building & Construction Employees & Builders Labourers’ Federation (NSW) v Minister for Industrial Relations (1986) 7 NSWLR 372, 419 (Priestley JA).

103 Ibid.

104 SafeWork SA, Guidelines for the Acceptance of Enforceable Undertakings (June 2018) 4 <https://www.safework.sa.gov.au/sites/default/files/guidelines_for_acceptance_enforceable_undertaking.pdf?v=1529460278>.

105 Nehme et al., The General Deterrence Effects (n 50) 30.

106 Ibid.

107 See discussion in Part IIIA.

108 See for example, ASIC, Regulatory Guide 100 (n 99) [100.26]; ACCC, Section 87B Guidelines (n 32) 4; ‘WHS Undertakings’, ComCare (Web Page) <https://www.comcare.gov.au/the_scheme/regulatory_guides/whs_undertakings>; ‘Enforceable Undertakings’, Fair Work Ombudsman (Web Page) <https://www.fairwork.gov.au/about-us/our-role/enforcing-the-legislation/enforceable-undertakings>; ‘ Enforceable Undertakings’, Fair Trading NSW (Web Page) <https://www.fairtrading.nsw.gov.au/about-fair-trading/data-and-statistics/compliance-and-enforcement-data/enforceable-undertakings>; ‘About Fair Trading Enforcement and Processes’, Queensland Government (Web Page) <https://www.qld.gov.au/law/laws-regulated-industries-and-accountability/queensland-laws-and-regulations/regulated-industries-and-licensing/fair-trading-enforcement/about-fair-trading-enforcement-and-processes>.

109 This provision deals with product safety standards and unsafe products.

110 Australian Competition and Consumer Commission v Apollo Optical (Aust) Pty Ltd [2001] FCA 1456 (Unreported, Carr J, 17 October 2001), at [3].

111 Ibid [3], [7]-[8].

112 Ibidt[8]; Apollo Optical Pty Ltd, Enforceable Undertaking (Document no. 97/13P, 18 March 1997).

113 Eugene Bardach and Robert Kagan, Going by the Book: The Problem of Regulatory Unreasonableness (Temple University Press 1982) ix, 6.

114 Nehme et al., The General Deterrence Effects (n 50) 18–9.

115 Owen Fiss, ‘Against Settlement’ (1983–84) 93 Yale Law Journal 1073, 1076.

116 Gerard Nierenberg, The Art of Negotiating (Barnes Noble 1981) 29–30.

117 Bardach and Kagan (n 131) 105.

118 Ibid; Christine Parker, ‘The “Compliance” Trap: The Moral Message in Responsive Regulatory Enforcement’ (2006) 40 Law and Society Review 591, 592.

119 Kelli D Tomlinson, ‘An Examination of Deterrence Theory: Where Do We Stand?’ (2016) 80(3) Federal Probation 33, 33–8.

120 Ibid.

121 As the EUs of OFT NSW and OFT Qld are not available online, it cannot be determined whether those regulators have also adopted a consistent and similar structure of EU. Further, since CASA has only one EU on its website, it is not yet possible to conclude a particular practice of the regulator.

122 This observation is made from a review of the available EUs accepted by the 18 regulators who are part of this study.

123 Nehme et al., The General Deterrence Effects (n 50) 37.

124 Ibid.

125 Robert Gregory, crediting Frederick C Mosher, Democracy and the Public Service (OUP 1968) with the phrase, describes ‘subjective responsibility’ as ‘the stuff of moral dilemmas’: a ‘felt [and informal] sense of obligation’ – as opposed to formal, external obligations of ‘objective accountability’: Robert Gregory, ‘Accountability, Responsibility and Corruption: Managing the ‘Public Production Process’’ in Jonathan Boston (ed), The State Under Contract (Bridget Williams Books 1995) 60.

126 For a discussion of the range of understandings of ‘accountability’ see Peter Walker, ‘Understanding Accountability: Theoretical Models and their Implications for Social Service Organizations’ (2002) 36(1) Social Policy and Administration 62, 63.

127 Gary Becker, ‘Crime and Punishment: An Economic Approach’ (1974) 76 Journal of Political Economy 169.

128 Tom Tyler, Why People Obey the Law (2nd edn, Princeton University Press 2006) 19.

129 ANAO, (n 6), Chapter 4.

130 Australian Government, Fit for the Future: A Capability Review of the Australian Securities and Investments Commission: A Report to Government (December 2015) 119.

131 If breaches remain undetected, the undertaking will not be enforced in court: see also Tim Boreham, ‘Rivkin won’t be Misunderstood’, The Australian (18 October 2000) 42.

132 Tom Tyler, ‘Procedural Fairness and Compliance with the Law’ (1997) 133(2) Swiss Journal of Economic and Statistics 219, 220–1.

133 See for example, ACCC, Enforceable Undertaking Inghams Enterprises Pty Ltd (Reference No D99/11641) (28 December 1995).

134 See for example, ACCC, Enforceable Undertaking Kenco Car Care Pty Ltd (Reference No D 96/56P) (18 December 2006).

135 Christine Parker, ‘Regulator-Required Corporate Compliance Program Audits’ (2003) 25(3) Law and Policy 221, 224. However, Parker noted that ‘[I]n practice, […], compliance programme audits focus more on reviewing (and recommending improvements to) the systems elements of the compliance programme, rather than its compliance performance’.

136 ACCC, Small Business Guide to Trade Practices Compliance Programs (April 2006) 9 <https://www.mintz.com/sites/default/files/viewpoints/orig/35/2014/01/Small-business-TPA-compliance-guide.pdf>.

137 ACCC, Trade Practices Compliance Program Template Undertakings (2008). Nowadays see ‘Implementing a Compliance Program’, ACCC (Web Page) <https://www.accc.gov.au/business/business-rights-protections/implementing-a-compliance-program>.

138 See, eg, Marina Nehme, ‘Monitoring Compliance with Enforceable Undertakings’ (2009) 23 Australian Journal of Corporate Law 76.

139 ASIC, Enforceable Undertakings Templates (Document No. IR 07-23, 14 June 2007). The templates are currently being updated: ‘About the enforceable undertakings register’, ASIC (Web Page) <https://asic.gov.au/about-asic/asic-investigations-and-enforcement/about-the-enforceable-undertakings-register/>.

140 Parker, ‘Regulator-Required Corporate Compliance Program Audits’ (n 153) 225.

141 ASIC, Enforceable Undertaking, Avco Access Pty Ltd, GE Automotive Financial Services, GE Capital Finance Australia, GE Personal Finance Pty Ltd and GE Finance Australasia Pty Ltd (Document No 017029220, 22 May 2008).

142 This information has been compiled from data available from the EUs and the regulators’ websites.

143 ASIC, Regulatory Guide 100 (n 99) [100.78].

144 Nehme et al., The General Deterrence Effects (n 50) 38.

145 Ibid.

146 See discussion in Part III on the aims of EUs.

147 John Kotter and James Heskett, Corporate Culture and Performance (Simon and Schuster 1992) 15.

148 SAI Global White Paper, Leading Contemporary Compliance - Control Cooperation or Collaboration (2007) <http://compliance.saiglobal.com/knowledge_center/index.php?section=knowledge_center&sub=whitepapers&id=3> at 3 July 2009.

149 Australian Securities and Investments Commission v Chemeq Ltd (2006) 234 ALR 511.

150 Ibid 533.

151 Kotter and Heskett (n 165) 15, 94.

152 Australian Consumer Law and Fair Trading Act 2012 (Vic) s 198(7).

153 ACCC, Annual Report 1998–99 (Report 1999) 7.

154 House of Representatives Committee on Legal and Constitutional Affairs, Mergers, Takeovers and Monopolies: Profiting from Competition (May 1989), recommendation 9.

155 House of Representatives Committee on Legal and Constitutional Affairs, Mergers, Monopolies and Acquisitions – Adequacy of Existing Legislative Controls (December 1991), recommendation 19.

156 John Braithwaite, To Punish or Persuade: Enforcement of Coal Mine Safety (State University of New York Press 1985) 109.

157 ASIC, Regulatory Guide 100 (n 99) [100.6]. See also Brent Fiss and John Braithwaite, Corporations, Crime and Accountability (State University of New York Press 1993) 92.

158 ASIC Act 2001 (Cth) ss 93AA(3) and 93A(3).

159 Braithwaite (n 174) 118.

160 Access Canberra, under the Work Health and Safety Act 2011 (ACT), may impose maximum penalties of $50,000 for individuals’ breaches of undertakings and $250,000 for corporations’ breaches: s 219. Worksafe (Tas) has an identical power under s 219 of the Work Health and Safety Act 2012 (Tas). Workcover (Qld) may impose maximum penalties of 500 units for any entity under the Work Health and Safety Act 2011 (Qld). From July 2019, one penalty unit is $133.45 Penalties and Sentences (Penalty Unit Value) Amendment Regulation 2019 (Qld)) making $66,725 the maximum penalty.

161 See Table 6.

162 A range of EUs have been varied due to non-compliance, as is apparent from the EU registers of the different regulators. Additionally, a number of regulators have decided to take legal action regarding the original alleged wrongdoing rather than for the breach of the EU.

163 For a detailed discussion of this, please see: Marina Nehme, ‘Enforceable Undertakings and the Court System’ (2008) 26 Company and Securities Law Journal 147.

164 Australian Competition and Consumer Commission v Woolworths (South Australia) Pty Ltd and Others (2003) 198 ALR 417, [43]. Although this case is in relation to noting rather than enforcing an undertaking, the quote is still relevant. Mansfield J stated that when noting an undertaking the court will not necessarily look in detail about the circumstances that led to the undertaking due to the concern that such a finding may ‘expose the risk of inconsistent findings upon the question, if a later application for order under s 87B(4) was made’. This suggests that when deciding whether or not to enforce an undertaking, the court may take into consideration the fact that an undertaking has (or has not) been entered into properly.

165 Australian Securities Investments Commission v Sharetrend Software Pty Ltd [2000] VSC 472 (Unreported, Mandie J, 3 November 2000).

166 Australian Competition and Consumer Commission v Signature Security Group Pty Ltd [2003] FCA 375, (2003) ATPR ¶41-942, [41].

167 See for example, ACCC v Roberson [2008] FCA 1735, [42].

168 See for example, ACCC v Woolworths Limited [2014] FCA 364.

169 ASIC v Empower Invest Pty Ltd [2010] NSWSC 1025.

170 Ibid [42].

171 See for example, Australian Competition and Consumer Commission v TPG Internet Pty Ltd (No 2) [2012] FCA 629, [110]-[111]; Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; Australian Competition & Consumer Commission v Australian Power and Gas Company Limited [2013] FCA 1358, [14]-[15]; Australian Communications and Media Authority v Radio 2UE Sydney Pty Ltd (No 2) (2009) 178 FCR 199, [85], [98], [116], [159], [163]; ACCC v Optus Mobile Pty Ltd [2019] FCA 106 [73]-[74].

172 See for example, TPG Internet Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 190, [159].

Additional information

Funding

This work was supported by Australian Securities and Investments Commission.