"I have heard that the Serious Fraud Office is tightening up on enforcement of the Bribery Act and that, as part of it, they are going to focus on the construction industry. Is there anything I need to do?"

It is true that the SFO is tightening up on bribery. It has issued revised guidance on the Bribery Act which is notably tougher than the original: in most cases, the decision whether to prosecute will now be driven solely by the strength of the case, with far less room for latitude. The SFO has launched a high profile investigation into alleged corruption at Rolls Royce in connection with aero-engine sales, there have been a number of arrests, and the first major trial under the act is due in the autumn.

A Chartered Institute of Building survey showed that nearly 50% of respondents considered bribery to be common or fairly common in the construction industry, and that 20% considered that it had got worse in the last five years. Transparency International, a global NGO dedicated to combating corruption, has consistently identified the construction industry as one of the most prone to bribery.

Against this background, it is not surprising that when the director of the SFO, David Green, indicated in October 2013 that he favoured a "sector sweep" approach to enforcement, he identified the construction industry as a prime target, along with public procurement, oil and gas, and the extractive industries.

What do you need to do in response to this? The short answer is not to break the law, and to ensure that you have proper anti-bribery procedures in place.

The Bribery Act creates four serious offences, punishable by unlimited fines and up to ten years imprisonment. Two general offences cover offering, promising or giving a bribe; and requesting, agreeing to receive or accepting a bribe. There is a third specific offence of bribing a foreign public official, aimed at companies that operate internationally.

A bribe is a financial or other advantage which is given or received in return for the improper performance of a public or business function. This is a wide definition which covers all the obvious cases, such as bribery to secure a contract, to submit an inflated tender, to wrongly increase a valuation, or to wrongly issue or withhold a certificate or decision under a contract.

A fourth offence can only be committed by a commercial organisation, such as a company or partnership. Where any employee, agent, contractor or sub-contractor (described as "associated persons") to that organisation gives or offers a bribe with a view to obtaining or retaining business or a business advantage, an offence is committed by the commercial organisation. The only defence is to show that the organisation had adequate procedures in place to prevent its associated persons from committing bribery. This involves having a proper anti-bribery policy, with detailed guidelines and procedures. In turn, this is likely to require staff training, imposing appropriate contract terms, carrying out risk assessments, and carrying out due diligence on all "associated persons".

Corporate hospitality and gifts are a problem area. The guidance suggests that reasonable and proportionate corporate hospitality, aimed at maintaining good relations, will not be treated as bribery. So taking a client or business contact out to lunch or to a sporting event as a way of keeping in touch and developing a good working relationship will be unobjectionable. On the other hand, lavish hospitality - such as an all expenses paid luxury trip to a world cup game in Brazil - in return for the award of a contract will clearly fall foul of the act.

This article by David Johnson originally appeared in Professional House Builder and Property Developer in February 2014.