The Bribery Act 2012
The Bribery Act 2010 has now been in force for over 12 months. Recent research by GoodCorporation (a business ethics consultancy) suggests that only 2 out of 3 major logistics companies have publicly set out their approach to fighting bribery. The research suggests that half of the world’s biggest logistics companies are putting themselves and their customers at risk of prosecution by their failure to implement adequate anti-bribery policies and procedures.
The Act provides for the following offences: (1) the offence of giving a bribe; (2) the offence of receiving a bribe; (3) the offence of bribing a foreign public official and (4) the offence of a commercial organisation failing to prevent bribery.
The new corporate failure to prevent offence means that organisations can face criminal charges for the acts of their employees, agents, joint venture companies or subsidiaries in any country, even if they knew nothing about the corruption or bribery taking place. The only defence to this charge is for companies to show that they have adequate procedures in place to prevent bribery.
The Ministry of Justice published guidance early in 2011 setting out what steps an organisation should take to ensure they have adequate anti-bribery procedures in place. This guidance suggests that adequate procedures should be built around 6 principles:
- Proportionality - Organisations should take action appropriate to the risks they face and the size of the business.
- Top level commitment to bribery prevention - Senior management must take personal responsibility for the organisation’s anti-corruption programme, maintaining oversight of its progress and implementation and the board should regularly consider anti-corruption issues.
- Risk assessment - Organisations should review and monitor the bribery risks they face in their market, sector and location. Large, high risk operations should consider using external professionals to assist the risk assessment.
- Due diligence - Companies need to carry out adequate due diligence on agents, intermediaries, joint venture partners and other third parties as they will now be liable for the corrupt acts of these entities if they carry out bribery on the company’s behalf.
- Communication - Anti-bribery policies and procedures need to be integrated and visible throughout organisations. They need to be imbedded in the organisation and understood by employees, intermediaries and agents. Many companies will need to roll out new training on anti-bribery and it is likely that on-line training tools will become common place for larger organisations.
- Monitoring and review - An organisation must be able to prove that it regularly monitors and reviews the adequacy and suitability of policies and procedures and adapts them to reflect any changes in the organisation.
The research by GoodCorporation suggested that many large logistics companies have failed to take the above steps. For example, nearly half of all companies have no statement addressing “facilitation payments”. Facilitation payments remain illegal under the Bribery Act and are a clear risk area for logistics companies whose employees are likely to face requests for such payments in certain countries to ensure the speedier delivery of packages through customs. This could lead to criminal liability for the company.
Logistics companies should remember that the larger the institution, and the further its global reach, the higher the risk and the greater the need for integrated procedures and policies. However, it also needs to be remembered that the Bribery Act is tempered by proportionality. Proper risk assessment from the outset will help to identify what is proportionate (or not) for your institution. Failure to take such steps could lead to criminal prosecution, imprisonment for individuals and significant fines for companies.