Government consults on anti-bribery guidance

Out-Law News | 16 Sep 2010 | 9:40 am | 3 min. read

The Government has published the six principles that will be used to determine whether or not a company is responsible for bribery offences committed by its employees or agents under new anti-corruption laws.

The recently-passed Bribery Act clarified what had been seen as a difficult and outmoded set of corruption laws, and it made it clear that companies were responsible for their employees' and agents' corruption unless they could show that they operated anti-corruption policies and practices.

Business groups were unhappy with the definition of their responsibility and the last government pledged to change the law to make sure that the Government would have to publish guidance on the scope of companies' responsibility for bribery.

The Government has now published that guidance and is seeking comment and opinion on it in a consultation process.

"The Bribery Act creates a new offence under section 7 which can be committed by commercial organisations which fail to prevent persons associated with them from committing bribery on their behalf," said the consultation document. "It is a defence for an organisation to prove that despite a particular case of bribery it nevertheless had adequate procedures in place to prevent persons associated with it from bribing."

"Section 9 of the Act requires the Secretary of State to publish guidance about procedures which commercial organisations can put in place to prevent persons associated with them from bribing," it said. "This document sets out that guidance."

"This guidance is designed to help commercial organisations of all sizes and sectors understand what sorts of procedures they can put in place to prevent bribery from occurring within them," it said.

The six principles that companies should subscribe to to avoid liability for employees' or agents' bribery are:

  1. risk assessment;
  2. top level commitment;
  3. due diligence;
  4. clear, practical and accessible policies and procedures;
  5. effective implementation; and
  6. monitoring and review.

The guidance says that companies should know and keep up to date with their sector's bribery risks, should ensure that the organisation is committed to anti-corruption from the most senior level down; and that they should know about the companies they deal with as partners or customers.

It says that all company guidance should be clear and realistic; that anti-bribery should form a part of the way the whole company works; and that all these practices should be regularly monitored and reviewed.

"Although the six principles reflect UK and international good practice and ought to be generally applicable, they do not propose any particular procedures in themselves," said the guidance. "They are intended to be used as a flexible guide to deciding what procedures are right for an organisation. If your organisation is small or medium sized the application of the principles is likely to suggest procedures that are different to those that may be right for a large multinational organisation."

"The guidance suggests certain procedures but you may decide that they are not applicable to your circumstances or that there are others that suit your particular circumstances better. Whether procedures are adequate can only ever be determined by the particular circumstances of a case, so there are likely to be procedures which are nevertheless adequate but which have not been described in this guidance," it said.

The guidance suggests that in developing and clarifying anti-corruption policies, companies might consider producing rules on the giving of political or charitable contributions and the provision of hospitality.

"Organisations may also wish to consider issuing a code of conduct, which sets out expected standards of behaviour and which can form part of the employment contract," it says.

"Bribery, if left unchecked, destroys the integrity and ethical foundations of all institutions, public and private," said Ken Clarke, Lord Chancellor and Secretary of State for Justice. "Economic globalisation means that the damaging impact of commercial bribery that seeks to subvert open competition in business transactions, has now moved beyond unilateral national policies and has become a global problem."

"The new law will introduce a clear and robust approach and is intended to encourage commercial organisations to take steps to address the risks of bribery," said Clarke.

Though bribery law is devolved, the Scottish Government has agreed that the Act should extend to Scotland and the Scottish Government participated in the production of the consultation paper, Clarke said.

"I am confident that the proposals we are making ... will produce a practicable but flexible framework for the development of risk-based bribery prevention procedures suitable for commercial organisations of all types and sizes and wherever they do business," said Clarke.