The UK Bribery Act 2010 (Act), came into force on 01 July 2011, following the issue of guidance by the Ministry of Justice (MOJ). The Act modernises the law on bribery, increases the penalty for such crimes and the more significantly creates two new offences of bribery of foreign public officials and failure by commercial organisations to prevent bribes being paid.
The latter is more pertinent to the operations of DUDLEY LODGE as it provides for the strict liability corporate offence of failing to prevent bribery as this is deemed to be easier to prosecute as no intent is required on the Company’s behalf to bribe. As an organisation which is incorporated in the UK, we would be guilty of this offence if a “person associated” with the Company bribes another person.
The maximum penalty for failing to prevent bribery is an unlimited fine and the Company may be restricted in tendering for local government work. Any individual committing any of the offences faces up to ten years imprisonment, an unlimited fine, or both. Director/Trustees may also face action to debar them from being Directors.
Under the Act there are four types of offence:
Offences of bribing another person – The intention of the briber must be that the person being bribed will improperly perform his or, her duties. This relates to an expectation that the person being bribed will act in good faith, impartially, or in accordance with a position of trust;
Offences relating to being bribed – Where a person anticipates to, or requests, agrees to receive or accepts a financial or other advantage as a reward for improper performance of a relevant function or activity;
Bribery of foreign public officials – This offence is separate from offences of bribing another person. There is no separate offence of accepting a bribe from a foreign public official; and
Failure of commercial organisations to prevent bribery – Corporate offences are defined as commercial organisations failing to prevent bribery by an associated person, i.e. employee, agent or supplier, who performs services on behalf of the company. The term ‘associated person’ could include others over who we have no control and therefore, DUDLEY LODGE could be convicted of this offence even if we did not know a third party agent had bribed others.
The MOJ have published a framework, which provides an effective compliance program, but which is not designed to be an exhaustive or explicit checklist. The guidance provides general best practice examples of what will be considered a compliant and ethical culture.
The guidance clearly states that if there is very little risk of bribery being committed on behalf of the organisation, then there is no need for extensive and explicit written documentation, or policies. The guidance also states that organisations may already have proportionate procedures through existing controls over Company expenditure, accounting and commercial contracts.
However, it is important that in determining the need for explicit policies, or procedures, organisations will need to fully assess their position in respect of risk exposure to bribery. As a key defence if charged with a corporate bribery offence will be to show that organisations have taken sufficient measures to prevent bribery occurring and any reliance on this defence should ensure that policies and procedures that adopted should match the level of risk.
The guidance explicitly places responsibility for preventing bribery within an organisation with Directors and Senior Managers and as such it is important for the Board and Executive Team to take a pro-active stance in respect of bribery that can clearly be evidenced. The Bribery Act 2010 – Guide for Directors make the following statement:
“The only defence to this strict liability is that there were ‘adequate procedures’ in place to prevent bribery. For a director who has both personal and corporate liability to contend with, knowledge and understanding of the new Act is essential.”
It is considered essential that senior management take responsibility for the anti-bribery and anti-corruption agenda in order to ensure that any bribery related issues, if identified, can be escalated to the Board.
In response to the Bribery Act 2010 the Executive Team has:
A statement, is issued to all members of staff and published on our website which sets out the Boards Zero Tolerance Approach to bribery.
Following the assessment undertaken by the Executive Team into the level of risk we face the procedures to prevent bribery are proportionate to the low risk assessment. As such the Bribery Act 2010, does not have a major impact on us in real terms and staff have been made aware of possible pitfalls related to bribery.
Although it is not entirely possible to prevent bribery from occurring we would have no way of knowing unless either the staff member or the person offering the bribe were to make the facts public.
However, we believe that in the event that such an incident did occur and based upon advice provided in the Guidance on the Bribery Act 2010 and our own assessment, there is no need for extensive written documentation or polices specifically in relation to bribery within our organisation and that we do have in place proportionate controls to prevent bribery.
We are currently only accepting closed referrals. We hope to take direct referrals soon. Please contact us if you would like more information.