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Use of LPP must be reviewed, argues Greens
In addition to calling for PwC to be restricted from tendering for government work for five years, the Australian Greens is pushing the federal government to review the use, misuse, and overuse of legal professional privilege.
Jerome Doraisamy and Miranda Brownlee
On Wednesday (12 June), the Senate finance and public administration references committee handed down its final report for the Inquiry into Management and Assurance of Integrity by Consulting Services, in which the Australian Greens made several of its own recommendations, including a temporary ban restricting PwC from winning government contracts.
The party said it should also be restricted from contracts for government work until it has provided the Linklaters report to the Australian Senate.
That Linklaters report, as detailed by the Senate inquiry, was commissioned by PwC International to identify any overseas firm partners involved in the breach of confidential government information. It supposedly names six individuals who “ought to have [questioned] the information, the origin, and potential confidentiality of the information they received”.
The report has been sought on numerous occasions “by numerous entities”, the committee noted, but “so far, PwC has declined to provide a copy” to the committee.
The committee’s views and recommendations, included in the Senate report, noted that the failure to release the “now infamous” Linklaters advice leaves it with “little option but to conclude that the failure to release this material is to protect the organisation from further scrutiny and consequences of their actions”.
The Greens added that “in view of its misdemeanours in the misuse of confidential information, PwC should be excluded from government contracting for five years”.
Australia’s third-largest political party also made two recommendations pertaining to legal professional privilege.
Firstly, it suggested that the federal government make all consultancy and accounting firms abide by the same corporate whistleblower obligations prescribed under the Corporations Act.
“PwC consistently hid behind the incorrect application of thousands of legal professional privilege claims to prevent the ATO from accessing potentially incriminating evidence. This has raised serious concerns in organisations like the Law Council about such overuse bringing the legal profession into ‘disrepute and diminishing public confidence in the administration of justice’,” the Greens said.
“Noting that there is a review currently underway by the Attorney-General’s Department and the Department of Finance, we recommend that the government consider ways to reduce the overuse of legal professional privilege.”
Its second recommendation was that attempts to combat legitimate investigations of consultancy malpractice, through the use and misuse of legal professional privilege, be reviewed and that stricter rules and protocols be developed to limit said misuse.
“PwC was fined $1.4 million in relation to its misuse of legal professional privilege. ATO’s confidential settlement with PwC shaved $785,400 off the original penalty of $1.4 million according to the copy of this settlement deed provided to the inquiry,” the party said.
“This effectively means that in negotiation, in the face of possible ‘deep-pocketed’ legal action, the ATO halved the fine for false legal professional privilege claims.”
The full committee, for its part, made 12 recommendations, including that PwC “be open and honest with the Australian Parliament and people, and with the international community”, by promptly publishing accurate and detailed information about the involvement of PwC partners and personnel (including names and positions) in the breach of confidential government information.
It further recommended that the Department of Finance require government contractors to have a duty to act in the public interest when acting for the government and that it establish a central register for conflicts of interest breaches, and that the Australian Law Reform Commission review the legislative frameworks and structures of partnerships in Australia, with a particular focus on partnerships with more than 100 partners.
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