The Bribery Act 2010 has had a troubled first few months of existence. The Act, which received Royal assent on the 8th April 2010, has yet to come into force after it was heavily criticised by the business community and the Ministry of Justice was ordered by Downing Street to review its provisions.
The Act is intended to clean up the outdated and complex old anti-bribery measures, and allow the courts and prosecutors to respond more effectively to acts of bribery at home and abroad.
It was originally due to come into force in April this year. However, that is now looking increasingly unlikely, with the date for implementation more likely to be sometime in May 2011.
The Bribery Act essentially creates three new bribery offences. The first is a general offence that can be committed by an individual offering or accepting a bribe. A bribe is described as an advantage, financial or otherwise, that is given with the intention of inducing a person to perform a relevant function or activity improperly, or reward them for doing so. The ‘intention’ to bribe is key, as is the test of ‘improper performance’; that is, behaviour which would not normally be expected by a person in the UK.
The second offence is the bribery of a foreign public official. This offence is committed when a person bribes a foreign public official with the intention of influencing them and obtaining or retaining business.
John Cridland, the head of business group CBI, said the legislation was “not fit for purpose” and that “exporters won’t be able to hoover up the demand in developing countries such as Asia if the Bribery Act prevents them from knowing on which side of the law they stand.”
The third offence created by the Bribery Act is the failure of a commercial organisation to prevent bribery. This offence will have a big impact on employers as they will be guilty of an offence if their employees have offered or accepted a bribe on their behalf.
However, there is a defence to this offence. If a commercial organisation can show that it had proper procedures in place to prevent bribery, it will not be guilty of the offence. This means there is significant pressure on employers to ensure they have anti-bribery and corruption procedures in place before the Act comes into force.
Guidance from the government sets out six principles that will help a company to establish the ‘proper procedures’ defence. These are an initial risk assessment, top level commitment from the senior members of the organisation to ensure a culture of compliance, due diligence, clear and accessible policies and procedures, effective implementation, and constant monitoring and review.
Practical steps a company can take include extra training for staff, updating the whistle blowing policy, and tightening the financial controls. In addition, employers may want to include bribery and corruption as gross misconduct in employees’ contracts.
Many employers are also concerned about how the new Act will affect their ability to entertain corporate clients. The effect of the Act on corporate hospitality is still unclear. A letter was attached to the Bill as it went through Parliament saying that it was not the intention of the Government to penalise corporate hospitality for genuine commercial purposes. However, “lavish” hospitality may be seen as a bribe used to secure advantages. For example, paying for a five star hotel room for a client when there is no discernible business advantage.
No further guidance appears in the Act and therefore it will be up to prosecutors to decide if and when to prosecute individual cases of corporate hospitality.
Despite the criticism of the Act, there are those who support it and say it is necessary in order to fight corruption both in the UK and abroad.
The Justice Secretary Kenneth Clarke has reassured his colleagues in the US that the Act, which aims to bring UK law into line with US foreign corruption practices, will come into force, and that Britain is dedicated to fighting corporate corruption.
For more information on the Bribery Act and how it can affect your business, contact Job Justice today. We can put you in touch with specialist employment solicitors who can explain and manage its impact.
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