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Westpac’s scandal highlights a system failing to deter corporate wrongdoing

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Elise Bant, University of Melbourne and Jeannie Marie Paterson, University of Melbourne

The news that Australia’s anti money-laundering regulator has accused Westpac of breaching the law on 23 million occasions points to the prospect that powerful members of corporate Australia are still behaving badly.

This despite the clear lessons offered by the Banking Royal Commission.

Regulators are still struggling to find the right balance between pursuing wrongdoers through the courts – an admittedly costly, time-consuming and highly risky business – and finding other means to punish and deter misconduct.

Australia’s anti money-laundering regulator, AUSTRAC, is seeking penalties against Westpac in the Federal Court.

Each of the bank’s alleged contraventions attracts a civil penalty of up to A$21 million. In theory, that could equate to a fine in the region of A$391 trillion.
In practice, it is likely to be a mere fraction of that sum. Commonwealth Bank breached anti-money-laundering laws and faced a theoretical maximum fine of nearly A$1 trillion, but settled for A$700 million.

No doubt the reality that companies can minimise penalties is a factor in why breaches continue.

This impression is reinforced by revelations last week that financial services company AMP continued to charge fees to its dead clients despite the shellacking it received at the hands of the royal commission.

Last month a Federal Court judge refused to approve a A$75 million fine agreed between the Australian Competition and Consumer Commission and Volkswagen to settle litigation over the car company’s conduct in cheating emissions tests for diesel vehicles. The judge was reported to be “outraged” by the settlement, which meant Volkswagen did not admit liability for its misconduct.

The A$75 million is a drop in the ocean of the likely profits obtained from this systemic wrongdoing and pales into insignificance next to fines imposed in other countries.

Proposals for law reform

So business as usual, right?

Maybe not for long. The Australian Law Reform Commission has just released a discussion paper on corporate criminal responsibility.

It points out that effective punishment and deterrence of serious criminal and civil misconduct by corporations in Australia is undermined by a combination of factors.

These include a confusing and inconsistent web of laws governing the circumstances in which conduct is “attributed” to the company. Similar problems of inconsistency arguably also undermine other key areas, such as efforts to give courts the power to impose hefty fines based on the profits obtained by the wrongdoing

The repeated attempts to come up with new and more effective attribution rules arise because corporate wrongdoers are “artificial people”. For centuries, courts and parliaments have struggled with how to make them pay for what is done by their human managers, employees and (both human and corporate) agents. All too often a company’s directors disclaim all knowledge of the wrongdoing.

To fix this, the ALRC recommends having one single method to attribute responsibility. It builds on the attribution rule first developed in the Trade Practices Act 1974 (Cth) and now used, in various forms, across various statutes.

The ALRC proposes that the conduct and state of mind of any “associates” (whether natural individuals or other corporations) acting on behalf of the corporation should be attributable to the corporation.

This goes well beyond the traditional focus on directors and senior managers and would provide some welcome consistency in the law.

Importantly, serious criminal and civil breaches that require proof of a dishonest or highly culpable corporate “state of mind” can be satisfied either by proving the state of mind of the “associate” or that the company “authorised or permitted” the conduct.

A “due diligence” defence would protect the corporation from liability where the misconduct was truly attributable to rogue “bad apples” in an otherwise a well-run organisation. There would be no protection in the case of widespread “system errors” and “administrative failures” so pathetically admitted during the royal commission.

The ALRC also proposes that senior officers be liable for the conduct of corporations where they are in “a position to influence the relevant conduct and failed to take reasonable steps to prevent a contravention or offence”.

This would place the onus on those in a position to change egregious corporate practices to show they took reasonable steps to do so.

Removing the penalty ceiling

These recommendations, if adopted could prove a game-changer for regulators asking themselves “why not litigate?” and corporations used to managing the fall-out of their misconduct as simply a “cost of business”.

The ALRC’s recommendations that the criminal and civil penalties should be enough to ensure corporations don’t profit from wrongdoing will be welcomed by many. Some academics have gone further and argued that the law should be changed to make it clear that civil, not just criminal penalties, should be set at a level that is effective to punish serious wrongdoing.

The ALRC also raises the question whether current limits on penalties should be removed. The Westpac scenario might be just the kind of case to make that option attractive.The Conversation

Elise Bant, Professor of Law, University of Melbourne and Jeannie Marie Paterson, Professor of Law, University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Hindu man lynched and set on fire in Bangladesh during anti-India protests

A Hindu man was lynched and set on fire in Bangladesh’s Mymensingh district amid rising anti-India protests after the death of a radical student leader.

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Hindu man set to fire in Bangladesh

A disturbing incident of mob violence against a minority community has been reported from Bangladesh, where a Hindu man was lynched and his body set on fire amid escalating anti-India protests following the death of a radical student leader.

Mob lynching reported from Mymensingh district

A 30-year-old Hindu man, Dipu Chandra Das, was lynched by a mob in Bhaluka Upazila of Mymensingh district after allegations surfaced that he had insulted Islam. According to media reports, the incident took place on Thursday night at an industrial area where Das was employed.

Das was accused of making derogatory remarks about Islam and Prophet Muhammad during an event organised at his workplace to mark World Arabic Language Day. The allegations spread rapidly within the factory premises and nearby areas, leading to heightened tension.

Eyewitness accounts cited in media reports said Das was assaulted by an angry crowd and died on the spot. After his death, the mob allegedly tied his body to a tree, beat it while raising slogans, and later set it on fire.

Body burnt at multiple locations, traffic disrupted

The violence did not stop there. Reports suggest the mob later moved Das’s body to a nearby bus stand area and again set it ablaze. Subsequently, the body was taken to the Dhaka–Mymensingh highway, where it was burned once more, leading to panic among locals and a temporary disruption of traffic on the busy stretch.

Confirming the incident, the local administration said a person was killed following allegations of insulting the Prophet. Officials added that the body has been taken into police custody and the situation is being monitored.

Interim government condemns violence

The lynching took place against the backdrop of widespread protests across Bangladesh following the death of Sharif Osman Hadi, a prominent leader linked to the July Uprising. The Muhammad Yunus-led interim government strongly condemned the killing, stating that there is no place for such violence in the country.

In an official statement, the government appealed to citizens to reject hatred and violence, stressing that those responsible for the crime would not be spared.

Anti-India sentiment intensifies after Hadi’s death

Tensions have been high in Bangladesh since Hadi’s death, with protests, vandalism and arson reported in several cities. Demonstrators targeted prominent media offices and symbolic locations linked to the country’s political history.

Hadi was known for his sharp criticism of India and the former prime minister, whose government was ousted during last year’s uprising. Groups formed after the political upheaval have been actively mobilising street protests and campaigns that fuel anti-India sentiment, particularly after the former premier went into exile in India.

The lynching of Dipu Chandra Das has further raised concerns over the safety of minority communities amid the ongoing unrest in the country.

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Bangladesh rocked by violent protests after student leader Sharif Osman Hadi’s death, anti-India slogans raised

Bangladesh has witnessed widespread violence and protests following the death of student leader Sharif Osman Hadi, with arson, anti-India slogans and a nationwide security clampdown.

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Bangladesh

Violent protests erupted across Bangladesh after the death of student leader and political figure Sharif Osman Hadi, triggering fresh instability in the country and a sharp rise in anti-India sentiment. The situation turned volatile in Dhaka and several other cities as thousands of demonstrators poured onto the streets demanding swift action against those responsible for his killing.

Hadi, 32, was shot in the head by masked assailants while launching his election campaign in Dhaka last Friday. He was later airlifted to Singapore for treatment, where he succumbed to his injuries. Known for his polarising views and strong anti-India rhetoric, Hadi had emerged as a prominent face during the 2024 student uprising that led to the ouster of former prime minister Sheikh Hasina.

Fires, arson and tense streets in Dhaka

Soon after news of Hadi’s death broke, protests intensified in the Bangladeshi capital. Several buildings, including those housing leading media organisations, were set on fire, with authorities confirming that staff members were trapped inside during the blaze. Fire services later said the situation was brought under control, while security forces were deployed in large numbers to prevent further violence.

Demonstrators were seen chanting slogans invoking Hadi’s name, vowing to continue protests until those behind the attack were arrested. Multiple areas in Dhaka remained tense late into the night as police and paramilitary units attempted to restore order.

Protests spread, Indian mission targeted in Chittagong

Violence was not limited to the capital. In the port city of Chittagong, protesters gathered outside the Indian Assistant High Commission, raising anti-India slogans amid heightened anger on the streets. Similar unrest was reported from other parts of the country, signalling the widening scale of the crisis.

In Rajshahi, demonstrators torched Bangabandhu Sheikh Mujibur Rahman’s residence and an Awami League office, causing extensive damage. Authorities have not yet released a detailed assessment of losses, but security has been tightened across sensitive locations.

Anti-India sentiment deepens diplomatic strain

The latest unrest comes amid deteriorating ties between India and Bangladesh following Sheikh Hasina’s flight to Delhi. Earlier in the week, protesters under the banner of “July Oikya” marched towards the Indian High Commission in Dhaka, demanding Hasina’s return and raising hostile slogans against India.

India has formally conveyed its concerns to Dhaka over threats to its diplomatic missions and inflammatory statements by Bangladeshi political figures. New Delhi has rejected allegations linking India to the attack on Hadi, calling such claims false and misleading.

Yunus calls for calm, state mourning announced

In a televised address, interim chief Muhammad Yunus described Hadi’s death as an “irreparable loss” to Bangladesh’s political and democratic space. He urged citizens to exercise restraint, warning that continued violence could derail the country’s path towards a credible election.

The interim administration has announced a day of state mourning in Hadi’s honour, with national flags to fly at half-mast and special prayers planned nationwide. Bangladesh has been under an interim government led by Yunus since August 2024, with national elections scheduled for February 12.

India issues advisory for its nationals

Amid the unrest, the Indian High Commission in Dhaka issued an advisory asking Indian nationals in Bangladesh to avoid non-essential travel and limit movement outside their residences. Emergency contact details of Indian missions have been shared for assistance.

Manhunt launched for attackers

Bangladesh police have launched a manhunt for those behind Hadi’s killing, releasing photographs of two suspects and announcing a reward of five million taka for information leading to their arrest. Yunus has described the attack as a premeditated attempt by a powerful network to sabotage the electoral process.

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India closes two more visa centres in Bangladesh amid worsening security concerns

India has temporarily closed visa application centres in Rajshahi and Khulna, citing security concerns following protests near Indian establishments in Bangladesh.

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India closes two more visa centres in Bangladesh amid worsening security concerns

India has shut two additional Indian Visa Application Centres (IVACs) in Bangladesh — in Rajshahi and Khulna — citing the prevailing security situation in the country. The move comes a day after protests were held near the Indian High Commission in Dhaka by radical groups, raising concerns over safety around Indian establishments.

An official notification issued on the IVAC website said the centres in Rajshahi and Khulna were closed on December 18 due to security reasons. Applicants who had appointments scheduled for the day have been assured fresh slots at a later date.

The decision follows the temporary shutdown of the visa application centre in Dhaka earlier, even as New Delhi flagged a rise in open hostility towards India, particularly targeting the northeastern region, under the interim government led by Muhammad Yunus.

Bangladesh rejects India’s security assessment

Bangladesh’s Foreign Affairs Advisor Touhid Hossain dismissed India’s concerns and denied any deterioration in law and order. He distanced the interim administration from recent inflammatory remarks made by National Citizen Party (NCP) leader Hasnat Abdullah, who had publicly threatened to cut off India’s “seven sisters” and also issued comments against the Indian High Commissioner.

Hossain said the individual was not part of the government and termed his statements irrelevant. He also claimed that security arrangements were in place and that the shutdown of the Dhaka visa centre coincided with a local programme, which raised security-related questions.

Political backdrop and India’s response

The NCP, which emerged from student-led protests that led to the fall of the previous Awami League government, has extended support to the Yunus-led interim setup. Though the party has limited political presence, radical elements associated with it have organised anti-India demonstrations in Dhaka.

India, in an earlier statement, urged the interim government to ensure internal law and order and hold peaceful elections so that Bangladesh can return to an elected administration. However, the interim government appeared dismissive of this advice, with Hossain stating that India need not advise Dhaka on conducting elections.

Observers in Bangladesh have pointed out that delays in elections could benefit the unelected interim government, while radical groups may attempt to create disruptions by projecting India as a hostile actor. New Delhi has so far maintained a measured stance, despite remarks that directly question India’s sovereignty and territorial integrity, particularly in the northeastern region.

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