On 30 March 2011, the Ministry of Justice published its long-awaited guidance on the Bribery Act 2010, which deals with the procedures that an employer can put in place to prevent bribery.
One of the offences introduced by the Bribery Act is an offence under which a commercial organisation is guilty if a person “associated” with it pays a bribe to win or retain business for the organisation.
The Act also provides that an employer has a defence if it can show that it has in place “adequate procedures” designed to prevent bribery. The Bribery Act itself does not include a definition or specific explanation as to what constitutes adequate procedures, which is where the guidelines come in.
Draft guidelines were first published in September 2010, and were initially subject to a two month consultation period, with the aim that the Bribery Act would come into force in April. However, there was widespread criticism of the draft guidance, with the CBI calling it “not fit for purpose”, and of the Act itself. Businesses felt that the Government was not being realistic about the issues they face in this area. As a result, the consultation period was extended and the implementation of the Act delayed.
The revised guidance does not change any of the wording of the Act. However, the Government has clearly tried hard to dispel the idea that it is anti-business and divorced from reality. In the introduction to the guidance, Kenneth Clarke states:
“I have listened carefully to business representatives to ensure the Act is implemented in a workable way – especially for small firms that have limited resources. And, as I hope this guidance shows, combating the risks of bribery is largely about common sense, not burdensome procedures. The core principle it sets out is proportionality.”
This guidance again sets out six key principles for businesses to consider, but now includes more practical guidance and case studies. For example, it explains that normal methods of entertaining clients will not be unlawful, using the specific example of taking clients to Wimbledon or the Grand Prix. This guidance also reduces the number of parties on whom businesses will be expected to conduct due diligence, and arguably is more realistic about the limits of control in joint ventures, and of business conducted in some parts of the world. It explains that small businesses can potentially avoid the costs and management time of implementing unnecessary controls in certain circumstances.
It is worth analysing the guidance for factors that the SFO will take into account when assessing whether to prosecute. The joint Prosecutors’ guidance published on the same day by the Director of Public Prosecutions and the Director of the SFO, makes it clear that facilitation payments are not only illegal but may indicate pre-meditation, potentially inviting criminal prosecution.
What should employers be doing now to ensure compliance?
Employers should use the next two months before the Act comes into force to ensure that all their policies (such as whistleblowing and harassment policies), as well as internal practices, interact and comply with their anti-bribery and corruption codes. Amendments to existing policies and related training are likely to prove a cost effective way of demonstrating how anti-bribery measures are in place throughout all levels of the organisation.When reviewing policies, it is a good time to ensure that contracts of employment contain a specific clause obliging all employees (including those based abroad) to comply with anti-bribery policies and practices.