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The long awaited guidance on the Bribery Act was published by the Ministry of Justice on 30 March 2011. It was also announced that the Act, which was given royal assent last year, will now come into force on 1 July 2011. Companies now have a few months to ensure that bribery prevention procedures are in place.
Section nine of the Act requires the government to provide guidance for companies on the procedures commercial organisations can put in place to prevent associated persons from committing acts of bribery.
Under section seven of the Act it is an offence for companies to fail to prevent the illegal act of bribery. However, if an individual or a group of individuals associated with the company (i.e. an employee, agent or subsidiary or a person who performs services on behalf of the company) is found to have been involved in bribery, it is a defence for a company to show that they had adequate procedures in place.
It is important to note that the guidance specifically relates to the offence in section seven. Individuals in companies found guilty of the offences in sections one, two and six of the Act have no defence. Sections one and two relate to offering, promising or giving a bribe and the requesting, agreeing to receive or the actual receiving of a bribe. Section six addresses the offence of bribery by a foreign public official in the context of business activity.
The guidance comes in two documents one which is targeted at larger companies and the other in the form of a quick start guide for SMEs who may be operating in an industry or in a country which is considered high risk when it comes to bribery and corruption. The guidance states six principles that companies both large and small should consider when putting in procedures to prevent bribery within their organisation.
These are:
Proportionate procedures: the procedures a company puts in place should be proportionate with regard to the risk of bribery it faces. Companies should ensure that they do what is practically possible; acts of bribery cannot be eradicated, but companies should ensure they have the procedures and related audits in place and ensure that not only are such procedures in place but they are clear to all working on behalf of the company, adhered to and can be enforced when required.
Top–level commitment: it is essential that top-level management are committed to, and lead by example in, preventing bribery within their organisations.
Risk assessment: this is probably the most important principle. Companies must carry out risk assessments to determine exposure and the extent of potential bribery activity within its organisation and also outside the company. For instance, companies will need to know the level of risk with regard to the markets it operates in, or how it carries out its business - especially if there is reliance on agents or joint ventures.
Due diligence: when putting procedures in place it is important for companies to carry out due diligence exercises. This is related to the risk assessment principle.
Communication: bribery prevention procedures must be understood throughout the organisation. Procedures must be clear as well as the consequences for not following the procedures. Companies may want to consider training for staff, although it may be difficult to ensure that agents or companies part of a joint venture adhere to bribery prevention policies.
Monitoring and review: the guidance states that it is not sufficient just to put procedures in place. There needs to be constant reviewing and monitoring, and if necessary amendments made from time to time.
The guidance states that the above principles are not prescriptive and are intended to be flexible. They should be considered with regard to the nature of the business and the challenges faced by companies. Although not prevalent, acts of bribery do take place in the UK and some legal commentators suspect that the Serious Fraud Office (SFO), in charge of enforcing the Act, may already have some evidence of bribery activities being carried out in the UK. The Act applies to the UK and abroad, so companies who solely operate in the UK should consider whether bribery prevention procedures should be implemented within their own organisations.
What the guidance tells us is that risk assessment and related due diligence is essential. Companies must look at existing and future business activities with ‘open eyes’, especially when operating in industries and countries prone to corruption. Carrying out the necessary risk assessment and due diligence should assist in preventing the offences under sections one, two and six where there is no defence and which could prove to be more damaging for a company than section 7.
For further information on the guidance please email Sharon Akumiah at sakumiah@acenet.co.uk. ACE would like to hear from members on how they are preparing for the 1 July deadline for putting sufficient procedures in place. Please send any comments to the above email address.
For detailed commentary on the Bribery Act guidance or for assistance on how member firms can put procedures in place please visit the websites of ACE legal affiliates Beale and Co Solicitors, Berryman Lace Mawer and Brodies.
DfT consults on aviation policy
The Department for Transport has launched a consultation on how to ensure Britain’s aviation industry can grow and prosper while reflecting public and environmental concerns.
The government has published a scoping document setting out the key principles and challenges of a new greener aviation policy. Comments are being invited on the scoping document until the end of September. A draft aviation policy framework will then be published for consultation in March 2012, with a view to formal adoption by March 2013.
Transport Secretary Philip Hammond launched the consultation following decisions not to support new runways at Heathrow, Gatwick and Stansted. The government is seeking views on the shape of its future aviation policy, the central theme of which will be how aviation can support economic growth while addressing its environmental impacts such as carbon emissions noise pollution and air quality issues.
Mr Hammond said: “Aviation is a crucial part of this country’s transport infrastructure, it should be able to grow, prosper and support wider economic growth. But we are not prepared to support this growth at any price - the environmental impacts of flying - both local and global - must be addressed.”
ACE is interested to hear from members to help inform its response to this consultation. To offer your views please contact Michael Hall at mhall@acenet.co.uk or by calling 0207 202 0256.
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