Bribery Act Compliance: Should you delay?

Bribery Act Compliance: Should you delay?


Author: Ron Reid

New legislation described as the toughest anti-corruption measures in the world and due to come into force in April, has been delayed.

Organisations in the property industry must ensure that they are compliant. A conviction for Bribery can, in certain circumstances, trigger an automatic debarring of a company from tendering from public sector contracts.

As well as replacing the existing law on Bribery, the Act includes for the first time a 'corporate offence' - the failure by a commercial organisation to prevent bribery.

This offence is committed when a person associated with the organisation bribes another intending either to obtain or retain business for that organisation or intending to obtain or retain a business advantage for that organisation. The definition of 'associated persons' is wide, and includes anyone performing services for the corporate body, including employees, agents, intermediaries, joint venture partners, and subsidiaries.

It is a strict liability offence and the only defence for a commercial organisation charged with it is to show, on the balance of probabilities that it had in place adequate procedures designed to prevent associated persons from paying bribes.

The Act requires the Secretary of State publish guidance on those procedures. It is a delay in publishing the guidance which has in turn prompted the delay in implementing the Act.

A Ministry of Justice spokesman has indicated that when the new guidance is published there will then be 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 the existing legislation within the UK which the Act replaces.

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) warned in response to the delay, that its patience is running out. He said the OECD will consider taking robust action. 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 the UK construction sector less competitive.

Companies are 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 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.

Whilst the guidance required by the legislation is delayed, it is not expected that this will differ greatly from the draft guidance put out to consultation in September 2010. It is clear that a key part of any compliance programme will be bribery prevention training. Organisations should consider whether to include contractors, agents and joint venture partners in such training.

We are assisting clients with implementing action plans to deal with the new legislation by writing policies and reviewing contractual documentation. We have a compliance plan which can help your business prepare for this new legislation.

Once your policies and procedures are in place we have developed an interactive e-learning course featuring an evaluation programme to enable organisations to both demonstrate that employees are fully aware of the new legislation, and, most importantly, understood the training they received.