NO.058

COMMONWEALTH DPP TO UNDERTAKE HIH CRIMINAL PROSECUTIONS

The Treasurer, Peter Costello and the Attorney General, Daryl Williams

today announced the Government’s decision that the Commonwealth Director

of Public Prosecutions (CDPP) will undertake criminal prosecutions relating

to the financial collapse of the HIH Insurance Group. This will include

criminal prosecutions under the Corporations Act and the Crimes Act (NSW).

A key task of the HIH Royal Commission was to inquire into the possibility

of breaches of law and whether possible criminal or other legal proceedings

should be referred to the relevant agency. In releasing the Commissioner’s

report on 16 April the Government immediately referred all possible breaches

of the Corporations Act to the Australian Securities and Investment Commission

(ASIC) and breaches of the NSW Crimes Act to the NSW Director of Public

Prosecutions.

The Government sought the advice of the CDPP and ASIC and has accepted

their recommendation that the CDPP is the most appropriate and effective

body to undertake HIH criminal prosecutions. The powers of the CDPP are

extensive and provide the best opportunity for the efficient prosecution

of HIH cases. The CDPP has the power to prosecute offences against the

Corporations Act, to grant indemnities to witnesses, to appeal against

sentences and other matters following completion of the prosecution and,

under arrangements with the States, to prosecute State offences.

A specialised unit will be established within the CDPP and will be staffed

by people experienced in the prosecution of complex commercial cases.

The unit will be dedicated solely to the pursuit of HIH matters. The

specialised unit will be assisted by two Senior Counsel and two Junior

Counsel retained from the bar who will advise on matters referred to

the CDPP by ASIC. A taskforce has already been established within

ASIC to examine prosecutions and prepare briefs for possible proceedings.

The Government expects these two agencies to work closely on investigating

and prosecuting possible breaches arising from the failure of the HIH

Insurance Group.

The Government intends to allocate additional funding of $14 million

over three years to the CDPP to undertake criminal prosecutions. ASIC

has already been provided with additional funding of $17.5 million in

2003-04 and $10.7 million in 2004-05 to undertake this task.

The Government has also ensured that ASIC is able to efficiently and

expeditiously investigate possible breaches of the law by legislating

to transfer the records of the HIH Royal Commission to ASIC.

The legislation maintains key protections that currently attach to the

Royal Commission records, such as the protection of individuals against

self-incrimination and rights to claim legal professional privilege.

CANBERRA

3 July 2003

Contact:

Niki Savva Treasurer’s Office 02 6277 7340

Carina Tan-Van Baren Attorney-General’s Office 02 6277 7300, 0419 423

965