Without a clear definition of corruption to work with, government and business will be wary of implementing the new legislation
The CBI has condemned the 2010 Bribery Act as not fit for purpose. What is it that makes reforming bribery law so difficult that it has taken 104 years do? And why is the government still hesitant about implementing legislation that was passed as a bipartisan measure in the dying days of the last parliament?
The answer may lie in the sheer difficulty of getting the government and business to agree on a workable definition of corruption. The UN had to draft a complete convention in 2002 without having an agreed definition. While we outlaw small facilitation payments, the US and the OECD tolerate them. One view of corporate hospitality is that it is a provision of what is expected and is designed to preserve goodwill rather than influence any particular commercial decision. Another sees it as an improper attempt to corrupt, similar to promoting products and services to public procurement officials.
The whole issue of using lobbyists, sometimes called consultants or agents, is open to different interpretations and, most importantly, varying regulation. For example, while the US regulates political lobbying, albeit rather unsatisfactorily, the country's bribery legislation is unclear on domestic lobbying with a view to obtaining or sustaining business and this remains a grey area.
Where there are no agreed definitions there can be no level playing fields. It follows that a government threatened with zero growth will be susceptible to persuasion from business, which fears that the UK's habit of gold-plating international norms will put it at a considerable disadvantage.
It is inconceivable that HMG intends to kick the Bribery Act into the long grass. We have an obligation to our OECD partners and both major political parties signed up for law reform. In its anxiety to appease any opposition to a measure introduced so late in parliament, the government was unwisely persuaded to undertake to issue guidance as to what was and was not meant by adequate procedures as a defence to an offence of strict liability created by the proposed Bribery Act. The concept of absolute liability for a company was understandably alarming, but the decision to try to define adequate procedures, however generically, was a mistake because they would have to be generic. They would be open to interpretation by business in the first instance and, in the worst-case scenario, by a prosecution agency. Unless business was prepared to put its trust in prosecutorial discretion, this was always going to generate anxiety.
No one really believes that British businesses are going to be prosecuted because they are forced to make small facilitation payments to foreign officials in order to get those officials to carry out their normal duties, nor can anyone really be concerned that the Serious Fraud Office or its successor will examine a company's hospitality bills or the marketing bills with a fine-tooth comb. There is a consensus of understanding about what is so excessive as to amount to an attempt to corrupt. Now that the government has found itself in this bind, however, the only way out is to officially reassure business that routine facilitation payments, although remaining unlawful, will not result in prosecution any more than will the provision of the second glass of Chablis or two mousemats rather than one. This is a world away from the jets, lavish holidays and excessive payments to so-called consultants that have characterised those few cases the SFO has so far brought to the public's attention.
British business does not wish to bribe, nor does it wish to believe that it is the government's criminal justice policy to put it at an unfair commercial disadvantage to competitors from less scrupulous jurisdictions. Nothing in the prosecution history of the SFO suggests that this will be the case.
One huge remaining fear is that the EU requirement that companies convicted of corruption be debarred from public works contracts would mean businesses being effectively destroyed with considerable collateral damage to shareholder value, employee pensions, supplier failures and social upheaval. The answer, while we wait for the EU to make its rules less draconian, is for HMG and the SFO to spell out a coherent sanctioning policy which will inform a corporation which discovers bribery in its system of the probable consequences of collaborating with the authorities, saving them money and bringing commercial and financial closure to the business.
There has clearly been a failure on the part of the government and the business community to understand the implications of reforming the law. The author, calling on his four decades of experience, thinks it is most unlikely we shall see a huge increase in company prosecutions let alone convictions, or that we shall witness the Anglo-Saxon version of perp walks for UK company executives.
Monty Raphael is special counsel at Peters and Peters. He gave evidence on the draft bribery bill to the House of Commons joint committee and is editor of Blackstone's Guide to the Bribery Act 2010. He is a director of the Fraud Advisory Panel, a director of Transparency International (UK), visiting professor of law at Kingston University and founder of the business crime committee of the International Bar Association
Source: http://www.guardian.co.uk/law/2011/feb/02/bribery-act-monty-raphael
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