After much controversy, you will probably have seen that last week the Ministry of Justice brought out the long-awaited Guidance in relation to the Bribery Act 2010. With confirmation that the Act will now come into full force on 1 July 2011 there is a short window for all organisations, large and small, to carry out the necessary steps to ensure they are compliant with the Act and have the procedures in place to protect them from future exposure.
If you've been following the ongoing commentary around this controversial Act you'll know that the stick was always focused on the new so-called 'corporate offence' which is committed by a commercial organisation failing to prevent bribery taking place by a person associated with it. However, the carrot to this is the defence available if that commercial organisation can demonstrate it had 'adequate procedures' in place designed to prevent the bribery taking place.
The Guidance was required to give us all a better steer on what those 'adequate procedures' should look like. And, in fact, one of the more useful points from the Guidance is a little more clarity on what is a ‘relevant commercial organisation’ and does this reference mean public sector bodies need not be worried about this particular offence? It’s now clear that however a body is incorporated (so not just limited liability companies) or if it is a partnership, then even if it has primarily charitable or educational aims or has a purely public function, it will still be a ‘relevant commercial organisation’ if it engages in commercial activities. So lots of public sector bodies will also need to be thinking about their ‘adequate procedures’ too.
Given the potential wide range of organisations exposed to this particular offence it's hardly a surprise that there is no one-size-fits-all answer and, predictably, the Guidance can only go so far. The positives, at first sight, seem to be some extra sections on corporate hospitality and more detail on the six key principles with added cases studies. However, on greater examination, these elements tend to provide only greater scope for uncertainty given the lack of black-and-white to be found in any of the added commentary. Unfortunately, it would seem that those of us who always had pretty low expectations of how much the Guidance could fill in the blanks haven't been disappointed!
Another significant aspect which will affect the public sector and those contracting with the public sector was not contained in the Guidance itself, but kept to Mr’s Clarke’s statement to Parliament. This involves the possibility of permanent debarment from public tendering processes which was a potential repercussion of a conviction under the Act. In fact, Mr Clarke has now confirmed that a conviction of a commercial organisation for the offence of a failure to prevent bribery will attract discretionary rather than mandatory exclusion from public procurement.
Despite a bit of re-ordering, the Guidance continues to focus on six key principles which should form the basis of approach of any organisation, large or small, to applying its own 'adequate procedures'. Although moved to principle 3 from its original number 1 slot, the sensible start point for any organisation must still be the conduct of a documented and informed risk assessment exercise. This seems the only sensible route to considering how much action is required for a proportionate response to the issue of bribery in light of factors such as the industry sector and areas of interaction with foreign markets.
We're already been helping our clients with this type of risk assessment as the start of a three stage approach to the issue of Bribery Act compliance. The second stage being the resulting documentation, whether that is simply a case of updating existing policies and procedures or adding new contract terms to employment contracts and third party arrangements, followed by a third stage of training.
Given the emphasis in the revised Guidance on 'proportionality' our tailored approach and outcome is far more likely to constitute 'adequate procedures' than simply using the standard 'vanilla' precedents being handed out by other organisations or made available on websites which haven't taken into account the specifics of your business or the areas in which you operate.