The Bribery Act

We take a look at anti-bribery practises and how to implement them.

In April 2011, the new Bribery Act will come into force. The new Act is being brought in with the aim of providing a more effective legal framework to combat bribery in the public or private sectors. The law covering bribery was previously fragmented and complex, arising from case law and from the Prevention of Corruption Acts 1889 to 1916.
The new Act will provide for 4 bribery offences as follows:

• the offering, promising or giving of an advantage
• requesting, agreeing to receive or accepting of an advantage
• a discrete offence of bribery of a foreign public official
• a new offence of failure by a commercial organisation to prevent a bribe being paid for or on its behalf (it will be a defence if the organisation has adequate procedures in place to prevent bribery)

It will help to tackle the threat that bribery poses to economic progress and development. It requires the Secretary of State to publish guidance about procedures that relevant commercial organisations can put in place to prevent bribery on their behalf.

The Law and Employers

The key section of the new legislation for most employers comes under section 7 of the Act which creates a new corporate offence.  A company will be guilty of this offence if a person who performs services on behalf of the organisation (an employee, worker or consultant) bribes another person, intending either to obtain or retain business for the company, or to obtain or retain an advantage in the conduct of the company's business. The offence can be committed in the UK or overseas.

Implications

If a company is found guilty of corporate bribery, both the company and its directors could be subject to criminal sanctions, including fines.

Defence

The Act provides employers with a defence to such an allegation which is to prove they had put in place "adequate procedures" designed to prevent bribery.

How to Implement the ‘Adequate Procedures’

Employers will no doubt be asking, ‘what constitutes adequate procedures’? Under clause 9 of the Act, the government is obliged to issue guidance "about procedures that relevant commercial organisations can put in place to prevent persons associated with them from bribing" (section 9(1)). Although no firm date has yet been produced, Mr Clarke has said the guidance on what those policies should look like would be published in the New Year, after a consultation beginning this September.

The guidance will be designed to be flexible, to ensure companies can adopt the compliance approach best suited to their business. The following suggestions on what adequate procedures would involve have been raised, and are as follows:

• A company's board of directors (or similar body) should take responsibility for establishing an anti-corruption culture and programme.
• A senior officer should be responsible for overseeing the anti-corruption programme.
• There should be a clear and unambiguous code of conduct including an anti-corruption element, and procedures should be established to assess the likely risks of corruption arising in a company's business.
• Employment contracts should expressly state penalties relating to corruption.
• There should be a gifts and hospitality policy to monitor receipt of gifts and entertainment.
• Anti-corruption training should be provided.
• There should be financial controls to minimise the scope for corrupt acts to be committed.
• There should be appropriate whistle blowing procedures to enable employees to report corruption in a safe and confidential manner.

What can Employers do now?

Employers are advised to consider the implications this legislation may have on their business carefully, taking advice if necessary. Steps can then be taken to prepare for the Act coming into force. Employers can review their existing procedures, decision-making processes and financial controls. If these are not already in place, they should ensure they are brought in. Any areas for improvement should be identified, and training given where necessary.

Should any alleged act of corruption occur, the disciplinary process remains the same as for all other misconduct allegations.