Bribery Act 2010: Honesty the Best Policy

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It’s just 19 months since Jack Straw, the former justice secretary, introduced the Bribery Bill into Parliament and the Bribery Act came into force across the UK on 1st July. All employers should be preparing themselves to ensure they comply with the legislation as having adequate procedures in place can provide them with a defence should the worst happen. If convicted, those involved in bribery, backhanders or kickbacks could find themselves in jail. The Serious Fraud Office carried out a lengthy investigation in February 2011 resulting in two former directors of the engineering company, Mabey & Johnson, being sent to jail for paying kickbacks to the Iraqi Government of Saddam Hussein. This followed the same company’s previous conviction in September 2009 for breaching UN sanctions on Iraq and bribing officials in Jamaica and Ghana. The Company was fined £3.5 million and ordered to make reparations payments of more than £1.4 million to Jamaica, Ghana and Iraq. The act introduces a new criminal offence for bribery for both individuals and companies. Adequate procedures defence Companies will not be liable for offences where they can demonstrate the “adequate procedures” defence. Rather unhelpfully, the Act does not define “adequate procedures” but the Government’s guidance sets out six key principles that should be followed when devising bribery prevention procedures, including having anti-bribery policies, staff training and a rigorous management process to deal with instances of bribery. The six principles are as follows:
  • Proportionate procedures – proportionality will depend on the risks faced by employers, as well as their size and resources. It may be necessary to do more to prevent bribery if you are a large employer, or if you are operating in an overseas market where bribery is known to be commonplace, compared to what you might be required to do if your organisation is small or is operating in markets where bribery is not prevalent.

  • Top level commitment – management should be committed to preventing bribery and should foster a culture in which bribery will not be tolerated.

  • Risk assessment – an assessment should be made as to the nature and extent of exposure to potential external and internal risks of bribery which should be documented

  • Due diligence – in relation to third parties who will perform services on behalf of the Company

  • Communication – of bribery prevention policies and procedures, including training staff

  • Monitoring and review – procedures should be monitored, reviewed and, where necessary, improved on a regular basis.
What are the Main pitfalls? The four biggest pitfalls facing companies are:
  • failing to carry out a risk assessment;

  • failing to put in place an anti-bribery and corruption policy;

  • failing to train those that are most likely to encounter bribery; and

  • failing to carry out due diligence on those you do business with.
As a minimum, employers should review their disciplinary, grievance and whistleblowing policies, their company handbooks and any ethics/conduct codes.

Employers need to remember that they will be responsible for bribery committed on their behalf, anywhere in the world, even if they are not aware of it or have done nothing to encourage it.

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