Government consults on Bribery Act guidance
News
The Government has launched a consultation on anti-bribery guidance for commercial organisations. Section 7 of the Bribery Act 2010 creates a new criminal offence of a commercial organisation failing to prevent bribery. There is no "small business" exception but organisations will have a defence if they have adequate anti-bribery procedures in place judged by reference to the statutory guidance.
Implications
The Bribery Act 2010 is due to come into force in April 2011, however, the statutory guidance on anti-bribery procedures is not expected to be finalised and published until early next year.
Employers and businesses, especially in larger commercial organisations, those who deal regularly with organisations abroad or who are involved in high value projects, should consider preparing their organisation now for the introduction of the Act. The proposed guidance gives an indication of the type of measures employers and businesses will need to put in place to avoid falling foul of the Bribery Act, such as anti-bribery training for staff, creating and implementing anti-bribery policies and procedures, and undertaking a risk assessment of the organisation's exposure to bribery and corruption.
The consultation closes on 8 November 2010 and the consultation document can be found at http://www.justice.gov.uk
Details
The Bribery Act 2010 creates a new offence (in Section 7) whereby a commercial organisation will be liable if they fail to prevent persons associated with them (for example employees) from committing bribery on their behalf. An organisation will have the defence if they can show that they had adequate procedures in place to prevent bribery. Under Section 9 of the Act, the Government has to publish guidance about the procedures organisations can put in place to prevent persons associated with it from committing acts of bribery.
The 'consultation on guidance about commercial organisations preventing bribery' sets out six general principles designed to apply to all sectors and types and size of businesses. However, the guidance is not prescriptive and is instead outcome focused and flexible, so that organisations can have policies and procedures which reflect the nature, scale and complexity of their activities.
Principle 1: Risk Assessment
The commercial organisation regularly and comprehensively assesses the nature and extent of the risks relating to bribery to which it is exposed.
This will vary depending on the size of an organisation, its activities and customers but all organisations should consider who will undertake the assessment and whether they have the necessary skills to do so or whether external professionals should be used.
Principle 2: Top Level Commitment
The top level management of a commercial organisation (be it a Board of Directors, the owners or any other equivalent body or person) are committed to preventing bribery. They establish culture within the organisation in which bribery is never acceptable. They take steps to ensure that the organisation's policies to operate without bribery are clearly communicated to all levels of management, the workforce and any relevant external factors.
The guidance states this could include a top level statement of a commitment to counter bribery in all parts of the organisation as having senior managers involved in developing anti-bribery policies which are then communicated to all employees and business partners.
Principle 3: Due Diligence
The commercial organisation has due diligence policies and procedures which cover all parties to a business relationship, including the organisation supply chain, agents and intermediaries, all forms of joint venture and similar relationships, and all markets in which the commercial organisation does business.
This includes undertaking enquiries into the bribery risks in a particular country in which the organisation is looking for business and finding out where the business partners have internal anti-corruption measures.
Principle 4: Clear, Practical and Accessible Policies and Procedures
The commercial organisation's policies and procedures to prevent bribery being committed on its behalf are clear, practical, accessible and enforceable. Policies and procedures take account of the roles of the whole workforce from the owners or Board of Directors to all employees, and all people and entities over which the commercial organisation has control.
The types of documents organisations should consider developing include a code of conduct which sets out expected standards of behaviour which could form part of their standard employment contracts and policies on gifts and hospitality.
Principle 5: Effective Implementation
The commercial organisation effectively implements its anti-bribery policies and procedures and ensures they are imbedded throughout the organisation. This process ensures that the development of policies and procedures reflects the practical business issues that an organisation's management and workforce face when seeking to conduct business without bribery.
The guidance makes it clear that having anti-bribery procedures is not enough and organisations need to ensure they are implemented. This could be done by having someone responsible for implementation within the organisation, ensuring the policies are communicated to employees and external business providers, and by providing anti-bribery training for relevant staff.
Principle 6: Monitoring and Review
The commercial organisation institutes monitoring and review mechanisms to ensure compliance with relevant policies and procedures and identifies any issues as they arise. The organisation implements improvements where appropriate.
Anti-bribery policies and procedures will need to be kept under review so they can adapt to a change in circumstances or respond to any incidents involving bribery. This could be through auditing procedures which pick irregularities combined with the views and experiences of employees and business partners to ensure existing policies are improved.
If you require further assistance, please contact a member of the team.
Posted by: Howes Percival
