The Bribery Act 2010
The Bribery Act 2010 creates the most stringent anti-bribery legal framework in the world, with a strict liability regime, extra-territorial effects and severe penalties.
Under the Act's "corporate offence", a commercial organisation will be criminally liable if a person "associated" with it (e.g. an employee, subsidiary, sub-contractor, agent or representative) bribes another person in order to obtain or retain business for the organisation. However, it is a defence for the organisation to show that it had in place "adequate procedures" designed to prevent such activity.
The Sweett Group case
Sweett Group plc is the first company to be convicted of the "corporate offence". Sweett pleaded guilty to not having adequate procedures, and was ordered to pay a fine of £1.4 million, £851,152 by way of profit confiscation and £95,000 in prosecution costs.
Sweett’s guilty plea followed its UAE-based subsidiary, Cyril Sweett International Limited (CSIL), paying bribes to a Mr Khaled Al Badie, a senior Emirati and Chairman of AAAI in order to secure a contract for the management of the Rotana Hotel project in Abu Dhabi. The payments were made via a sham "hospitality services" company, NPM Ltd, which was beneficially owned by Mr Al Badie.
It is important to stress that Sweett was not aware that CSIL had paid the bribes to Mr Al Badie. Nevertheless, because Sweett was a "commercial organisation" and CSIL its "associated person" for the purposes of the Act, and because Sweett was unable to demonstrate that it had put "adequate procedures" in place in order to prevent bribery, it was convicted.
Businesses in the construction sector must put in place adequate procedures to prevent bribery. The Ministry of Justice has issued guidance on doing so. We recommend considering the following:
- Co-ordination: Appoint a person to be responsible for leading efforts to ensure that you have proportionate and adequate procedures in place. This person should report directly to senior management.
- Engagement from the top: Draft and issue an all-staff memorandum from senior management reminding staff of the business’s zero tolerance approach to corruption.
- Risk assessment: Carry out a documented risk assessment programme in order to identify key areas of vulnerability and high-risk practices.
- Policies and procedures: Draft and disseminate a clear, overarching bribery policy document. Such a policy may refer to existing procedures and policies.
- Due diligence: Conduct due diligence of any potential "associated persons", especially if they may be considered to pose a higher risk of corruption (e.g. agents located in higher-risk jurisdictions).
- Contract review: Review existing and proposed contractual arrangements and amend where necessary to specifically prohibit bribery and include bribery as a ground for termination (e.g. sub-contractor contracts).
- Training and awareness: Develop a training and awareness programme to be delivered to relevant staff.
- Whistleblowing and investigation: Develop whistle blowing and investigation mechanisms to ensure that corrupt activities can be safely and confidentially reported to a nominated individual.