Thames Valley HR forum

Bribery Act 2010

Nicola DiggleBlake Lapthorn

How Corrupt is UK PLC?

Transparency International Corruption Perception Index

180 Countries Ranked – low score is good

UK ranked 11th 2005 (better)

UK ranked 20th 2010 (worse)

What does the Bribery Act cover?

Prevents the giving or receiving of a financial or other advantage to encourage or reward the improper performance of functions or activitiesThe Act prohibits:– Bribing – Being bribed – Bribing a foreign public official; and – The "commercial organisation offence" of failure to

prevent briberyIn force with effect from 1 July 2011

Penalties for breach of the Act

Individuals face up to ten years' imprisonmentCommercial organisations (including partnerships) risk:– an unlimited fine– ban on tendering for public contracts– directors, managers and company secretaries can also

face individual liability (for consent or connivance)

Main Features of the Bribery Act 2010 General Offences - Bribing or Receiving a Bribe

Paying or offering to pay a bribe

Requesting or receiving a bribe

Main Features of the Bribery Act 2010 Examples

Bribing a planning officer to grant you planning permission

Planning officer asking you for a reward for granting permission

Sometimes making the offer itself is enough

Corporate hospitality is ok provided it is reasonable and proportionate

Main Features of the Bribery Act 2010 Bribing of Foreign Public Officials (FPO)

Cannot bribe overseas officials

Local written laws that permit investment in the local economy or paying for training is acceptable

Facilitation payments are prohibited unless permitted by local law

SFO will prosecute if payments are routinely made

Main Features of the Bribery Act 2010 Territorial Jurisdiction

Rules relating to the two general offences and bribing a Foreign Public OfficialOffence committed if any act or omission takes place in the UKOffence committed if the person has a “close connection” with the UKDefined as a UK citizen, resident, company or Scottish Partnership

Main Features of the Bribery Act 2010 Corporate Offence of Failing to Prevent Bribery

A relevant commercial organisation (C) is guilty of an offence if a person (A) associated with C bribes another person intending to obtain or retain:business for Can advantage in the conduct of business for C Relevant commercial organisation :UK company or partnership doing business here or elsewhereOverseas company/partnership carrying on business or part of business here

Main Features of the Bribery Act 2010 Corporate Offence of Failing to Prevent Bribery

A relevant commercial organisation (C) is guilty of an offence if a person (A) associated with C bribes another person….A person is associated with C (disregarding any bribe under consideration) if A performs servicesfor or on behalf of CCan be an agent, subsidiary or parent company but will depend on all the relevant circumstancesAn employee of C is presumed to be providing services for C

Main Features of the Bribery Act 2010 Corporate Offence – Adequate Procedures Defence

C has a defence that it had in place adequate procedures designed to prevent persons associated with C from undertaking such conductAdequate procedures not defined in the Act but Guidance now published to assist companiesObjective is to support businesses in determining the sorts of bribery measures they can put in placeCBI has lobbied hard to get better clarification from Government on the Act

Main Features of the Bribery Act 2010 Guidance on Adequate Procedures

Six principles which underpin Bribery Prevention:Risk Assessment is first then

Top Level Commitment )Due Diligence )Proportionate Procedures ) Risk MitigationCommunication and training )Monitoring and Review )

Six principles First – Undertake a Risk Assessment

You must regularly and comprehensively assess the nature and extent of risks relating to bribery which you are exposedNo “one size fits all”Skills of persons performing risk assessmentInternal risks - unawareness of staff of risksExternal risks – Country, Transaction, Partner, Sector

Six principles Top Level Commitment

The Board of Directors are committed to preventing briberyPublish statements of commitment to counter bribery for internal and external communication Appoint a senior person to oversee implementation of anti bribery programme

Six principles Due Diligence

You have due diligence policies and procedures in place which cover:– all parties to a business relationship– agents and intermediaries– all forms of joint ventures– all markets in which you operate

Six principles Proportionate Procedures

Procedures and therefore resources expended need to be proportionate to risks you faceProcedures should ensure that there is a practical and realistic means of achieving your anti-bribery policy

Six Principles Communication and Training

Anti-bribery policies and procedures are embedded and understood throughout the organisationAppoint someone senior to oversee the implementation– Internal and external communication– Method and timescale of training

Various methods of trainingArrangements for MonitoringPenalties for breaching policy

Six principles Monitoring and Review

Monitoring and review mechanisms to ensure complianceInternal monitoringTransparency is importantExternal auditors

Miscellaneous Matters

The Likelihood of a Prosecution– Resources– Evidential Test– Public Interest Test– Must have regard to Guidance

Sentence– 10 years imprisonment for an individual convicted of an

offence (nb senior officer liability where corporate offence committed)

– Unlimited fine for company

What should organisations be doing about the Act?

– Anti-bribery/ethical conduct policy with zero tolerance– Any breach of policy deemed gross misconduct– Gifts/hospitality policy - reasonable and proportionate – Check political and charitable donations– No policies which reward excessive risk – No incentives for employee to commit bribery offence– Vetting policy/additional recruitment checks– No discrimination against nationals of other countries

What should organisations be doing about the Act?

Consider amending:– Contracts of employment– Director service agreements– Non-employee contracts– Disciplinary policy – Whistleblowing policy– Expenses policy– Bonus/commission schemes

Any questions?

Nicola DiggleSenior solicitor

Commercial Dispute Resolution Tel: 01865 254285

Email: nicola.diggle@bllaw.co.uk