The new Bribery Act is now in force, since 1 July, and although it was long trumpeted there still seems to be confusion about what it actually means. Backhanders, cash payments in brown envelopes, bungs etc, we can all easily conclude that they are unlawful. But what else might be?
Just as nobody was quite sure what exactly anti-competitive behaviour included, until the Office of Fair Trading (OFT) surprisingly decided that cover pricing was an important example of it, so what exactly the Bribery Act means is probably not going to become clear until the first prosecutions have cleared the appeals process.
The industry is now very wary of getting involved in anything that looks like cover pricing, even though the level of fines could be lower than the OFT originally wanted, but is there scope for inadvertently falling foul of this new bribery law? It would seem so, and what is needed might be nothing less than a radical change in corporate mind sets allied to the introduction of new risk management and other processes and procedures, allied to a new raft of training and internal communications initiatives.
The new law makes it an offence to give or receive a bribe, to bribe a foreign official even if working in another jurisdiction, and, for companies, failing to prevent bribery by employees or agents. The best advice available seems to be that companies most at risk must put in place fairly rigorous processes that are designed to prevent or to detect any corrupt behaviour; at the least this would provide a defence in the event of prosecution. Leave things as they have always been, and should an employee or an agent engage in bribery then the full force of the new Act may be brought to bear. This could result in unlimited fines, up to ten years in prison and a permanent ban on tendering for public contracts throughout the EU.
A survey from solicitors Russell Jones & Walker suggests that almost a quarter of businesses have no plans to do anything as a result of the Act being introduced. Fewer than one in fi ve were providing appropriate training, although just under a third had specific anti-bribery policies in place.
It seems that about half of construction companies are at least aware that over lavish corporate hospitality could leave them open to suspicion. Some of the high profile criminal prosecutions involving bribes in recent years have involved construction companies, so the Serious Fraud Office (SFO) is likely to be especially on the alert for any whiff of wrongdoing in construction. The risks have always been high for construction companies, especially those operating in overseas markets where local customs and practices can be colourful, agents and other intermediaries have to be paid, joint ventures have to be entered into with people and companies who won’t be winning any corporate responsibility awards anytime soon.
The SFO has warned that it will vigorously enforce the new law, whatever it turns out to be exactly, so no one can complain that they have not been forewarned (see News). Yet the industry generally is clearly not fully up to scratch about what needs to be done to avoid being vigorously prosecuted. Simply not paying bribes is not enough any longer.
Nick Barrett
Editor