When Lord Goldsmith, then attorney general, decided to close an investigation into BAE Systems in 2006, UK laws faced widespread international criticism. BAE Systems has since paid fines of 400 million for “defrauding the US” and reached a settlement of £30 million with the Serious Fraud Office for “breaching its duty to keep accounting records” in Tanzania. The Prevention of Corruption Acts 1889–1916 in place before the new Bribery Act 2010 left the UK open to condemnation from such international organisations as the Organisation for Economic Co-operation and Development (OECD).
The new Bribery Act, however, has met with approval from commentators. Transparency International, an NGO, observed “This Act sends out a strong message to UK plc and the rest of world – the UK will not tolerate bribery.” So what is it about this act which inspires confidence from leading anti-corruption bodies?
Apart from its clarifying influence on previous legislation, which encompassed three separate acts, the Bribery Act also introduces new measures. These legislate against the “bribery of foreign public officials” and the “failure of commercial organisations to prevent bribery.” The only defence open to organisations will be to have provided “adequate measures” to prevent corruption. But what will this entail?
Draft guidance from the Ministry of Justice specifies six key principles for bribery prevention: risk assessment, top level commitment, due diligence, clear, practical and accessible policies and procedures, effective implementation, and monitoring and review. If companies’ policies are lacking in these areas it is possible that directors could be prosecuted for a subsidiary agent’s actions abroad. In the most recent BAE ruling Transparency International expressed concern that “the company has not admitted bribery and no individuals have been punished.” Hopefully the new act should rectify such discrepancies.
Small-scale corruption is a large-scale problem in many developing countries. If one police officer is bribed with ten pounds to let a driver off of a traffic offence, it is difficult for the government to prosecute him, especially if every police officer is guilty of similar crimes. There have been examples in Kenya of police officers setting up road blocks and demanding payment without even any pretext of a misdemeanour on the motorist’s part. This extortion is even rumoured to be linked to political campaigns running low on donations. Bureaucracy and traffic jams delineate the slow decline towards a gross undermining of governance.
Under this new act, the UK would be one of a minority of countries who prosecute foreign bribery. This is a responsible approach to combating corruption, but only workable for international trade if multinational companies take a united approach. It is also complicated by the use of agents. The act specifies any person acting on behalf of the company, and that would include any agent hired abroad. This might make organisations far less willing to sub-contract local businesses to implement their intentions, which could have a potentially damaging effect on the economies of developing countries and trade relations.
Surely foreign countries want business and employment for their citizens not a detachment of British counterparts. According to the draft guidelines, adequate training and regulation would have to be applied to the agent by the company to avoid corruption and subsequent prosecution. This could prove to be a costly and unpopular exercise. It is often the opinion of those living and working in a country plagued with corruption that greasing palms is just a necessary part of life. It is just “getting things done”. I’m afraid that combating this attitude and the higher corruption of political process which allows it to thrive by paying and educating public officials poorly will not be achieved wholly by the Bribery Act 2010.
Kenneth Clarke, the Lord Chancellor, sets out at the beginning of the draft guidance that “there is an important role to be played by business itself in ensuring that commerce is undertaken in an open and transparent manner”. This is true and well intentioned and Britain should be a leading country in combating foreign corruption, as the Bribery Act 2010 sets out.