The Bribery Act 2010 introduces new criminal offences in connection with offering or receiving bribes. It also abolishes the old common law offences of “bribery and embracery”. The main new offences are those of offering a bribe, accepting a bribe, bribing a foreign public official and (importantly for this employment law newsletter) a new corporate offence of failing to prevent bribery. The Act also provides for senior officers to be guilty of an offence committed by a body corporate if it was committed with their consent or connivance – turning a blind eye may have been possible for Lord Nelson two centuries ago but it is unlikely to wash under the Bribery Act 2010.
According to an article in the Guardian shortly before the new Act received Royal Assent (the Guardian, 25th March 2009 “Bribery Bill finally reaches parliament”) only one UK company was prosecuted for foreign bribery during Labour’s 12 years in power.
The Bribery Act 2010 is not yet in force. It was originally expected that it would come into force on 1st October 2010 but commencement has been postponed until, probably, April 2011. Penalties for breach are severe – companies and individuals can face an unlimited fine. Individuals can also be sentenced to up to 10 years’ in prison and be disqualified from holding directorships for up to 15 years.
Under section 7 of the 2010 Act “A relevant commercial organisation (“C”) is guilty of an offence … if a person (“A”) associated with C bribes another person intending (a) to obtain or retain business for C, or (b) to obtain or retain an advantage in the conduct of business for C”.
Importantly, it is a defence for C to prove that “adequate procedures” were in place designed to prevent persons associated with C from undertaking such conduct (there are also defences if the accused can prove that the otherwise forbidden conduct was necessary for the proper exercise of any function of an intelligence service, or the proper exercise of any function of the armed forces when engaged on active service). In September 2010 the Ministry of Justice launched a public consultation on proposed formal “guidance on preventing bribery” to be followed in the New Year with publication of formal guidance as to what will be “adequate procedures”. The consultation closes on 8th November.
The consultation document explains that “The guidance sets out six principles, each followed by commentary and explanation. The guidance is not prescriptive and is not a one-size-fits-all document. The question of whether an organisation had adequate procedures in place to prevent bribery in the context of a particular prosecution is a matter that can only be resolved by the courts taking into account the particular facts and circumstances of the case”.
The six principles are listed as:
- Risk assessment (keeping up to date with bribery risks in “your sector and market”);
- Top level commitment (establishing a culture in which bribery is unacceptable);
- Due diligence (knowing your business partners);
- Clear, practical and accessible policies and procedures (including encouragement of “whistleblowing” where appropriate);
- Effective implementation (practising what you preach);
- Monitoring and Review (including consideration of whether external review is appropriate).