Bribery Act delay could cause more problems than it solves

Bribery Act delay could cause more problems than it solves

Published:

Author: Ron Reid

It is being widely reported today that implementation of the Bribery Act 2010 will be delayed, though there has been no official announcement by the Government or the Ministry of Justice.

The new Act was due to come into force in April 2011. Under it, the Secretary of State must publish guidance about procedures that relevant commercial organisations can put in place to prevent persons associated with them from bribing on behalf of that organisation.

Failure to prevent bribery is an offence under Section 7 of the Act. It is a strict liability offence and the only defence for a commercial organisation charged with that offence is to show that it had adequate procedures in place.

It is a delay in publishing the guidance on adequate procedures which has in turn prompted the delay in implementing the Act.

A Ministry of Justice spokesman has apparently indicated that when the new guidance is published there will then be at least three months between publication and implementation of the Act. It is important to remember that the guidance only relates to the defence for the corporate offence and nothing else.

The delay is not being viewed favourably in the wider world. The Act originates because of widespread criticism of existing legislation within the UK

Companies would be ill advised to delay bringing in policies and procedures to comply with the main thrust of the Act. The chairman of the Organisation for Economic Cooperation and Development (OECD) has today warned that its patience is running out. He said the OECD will consider taking robust action with regard to the delay. The OECD has the power to blacklist UK exporters, and has taken similar action in the past against Russia, Israel and Nigeria.

Were it to make such a move, British companies could find themselves in considerable difficulties when trying to secure international contracts simply because those placing them will require more due diligence with regard to the anti-corruption policies of UK suppliers. That in turn could make UK Plc less competitive.

Companies are already used to providing details of ethical and corporate social responsibility matters when tendering for contracts. Questions are frequently asked about health and safety, environmental issues and the like. There will be a need, therefore, for anti-corruption policies and procedures to be in place - whether or not the Act is delayed - if UK companies do not wish to be uncompetitive.

We have discovered whilst advising clients and prospective clients on the implementation of this Act that a number of them have no such policies in place. Allowing the delay in the publication of detailed guidance on relatively narrow issues to stop plans to implement such policies may not be in their best interests.

There is no suggestion from the Government that the main offences under the Act will be changed in any way. The culture of a company with regard to corruption will become all important going forward.

As anyone who has tried to implement programmes to change corporate culture will know, it takes a very long time to achieve.