Further to our last blog relating to the liabilities and indemnities clause in Oil and Gas contracts, Brodies have recently launched the Contracting Compass initiative, which provides insight on issues of English law relevant to oil and gas contracts.

The initiative comprises a series of seminars, with each accompanied by a dedicated white paper.

Recognising that the landscape of the contract is sometimes difficult to navigate, each seminar and paper highlights a key clause from the contract, focuses on particular points of English law and commercial practice most relevant to the clause concerned, and heightens awareness of the landscape as a whole.

In the seventh of the topics covered in the Contracting Compass series, we have focussed on the Anti-Bribery & Corruption clause (“ABC Clause”).

The white paper centres on the new, modern, consolidated and fit for purpose anti-bribery and corruption legal framework set forth in the 2010 Bribery Act.

Under the spotlight is the introduction of the corporate criminal offence of “failure to prevent bribery” and the defence available to organisations who can show they had in place “adequate procedures” to prevent bribery.

The legislation requires an organisation’s procedures to be “adequate”, not perfect – the object of the Bribery Act is not to penalise well-run organisations which experience an isolated incident of bribery on their behalf.

Putting in place “adequate” procedures

The white paper analyses the UK Ministry of Justice guidance on the Bribery Act which provides organisations with a framework to implement policies and processes that will satisfy the adequate procedures defence.

The guidance suggests a risk-based approach, following six key principles; Proportionality, Top- level commitment, Risk assessment, Due diligence, Communication and Monitoring and review.

In the second part, the white paper provides a practical guide for putting in place an effective and robust ABC provision informed by best practice that will (i) meet the requirements of relevant legislation and (ii) reflect reasonable standards for corporate governance.

Overall, the continued focus on failure to prevent offences across economic and financial crime makes the contract a crucial tool in protecting against criminal liability and protecting reputation in the market.