TI-UK Corruption Bill

Wednesday, 24 May 2006

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On 23 May, 2006, Hugh Bayley MP won the support of the House of Commons to introduce a Corruption Bill under the 10Minute Rule. The Bill is sponsored by a highpowered cross party group of MPs including the Chairmen of the Home Affairs, Foreign Affairs and International Development Select Committees.

Full text of the bill here.

BRIEFING FOR JOURNALISTS, MPs AND PEERS
10.00am, Wednesday 24 May 2006
Committee Room 18, Upper Committee Corridor, House of Commons

Prepared by Transparency International (UK), the Bill aims to reform the law of bribery in a way that will be understood by police, prosecutors, jurors, the private sector and the general public. The Bill will assist the UK to develop a clear anticorruption strategy, which will strengthen our contribution to the global effort to combat corruption. Corruption is not a victimless crime. It matters because it undermines essential services and jobs for poor people in developing countries, and it fuels terrorism and organised crime.

The Bill responds to the public concern that the UK’s anticorruption legislation is outof date, obscure and inadequately enforced. While successive Home Secretaries have promised new anticorruption legislation, the draft bill, which was presented in 2003, was roundly criticised by an all party committee of both Houses. The current law of corruption rests on a confused mix of common law and statutes, principally those enacted in 1889, 1906 and 1916.

Hugh Bayley MP says:

“As a member of the International Development Committee and Chair of the Africa All Party Parliamentary Group, which has just published a report on the UK and Corruption in Africa, I see at first hand the devastating consequences of corruption on poor countries. It is very much in the national interest for the UK to assume a lead role in fighting corruption worldwide by enacting and enforcing this Bill. ”

The Bill defines bribery by reference to the improper conduct that is intended to result from a bribe. It includes a number of new features in anticorruption law, including:

an offence of bribery of foreign public officials that corresponds precisely with the requirements of the OECD and UN Conventions.· an offence of foreign bidrigging in competitive tendering.
an offence designed to safeguard the integrity of sporting events by penalising cheating by “fixing”, an activity that is frequently rooted in betting and is linked to organised crime.
a requirement for UK companies to take all such steps as are reasonably open to them to ensure that their overseas subsidiary companies do not commit corruption offences.
a requirement for those exercising public functions to report the receipt of offers for bribes and reasonable suspicion of corruption offences.

Graham Rodmell, Director for Corporate and Regulatory Affairs in TI(UK), who led the project to draft the Bill, says:

“If it is adopted, the Bill will reform the law of bribery in a way that will be readily intelligible, responsive to contemporary concerns and fully compliant with the UK’s international obligations. It will improve the prospects of successful prosecutions, particularly of foreign bribery by UK nationals and companies.”

Notes to Editor:

Transparency International (TI) has been at the forefront of the anticorruption movement since it was formed in 1993. TI is a nonprofit making, independent, non governmental organisation, dedicated to increasing government accountability and curbing both international and national corruption. TI (UK) is part of a network of 90 national chapters carrying out the TI mission around the world. TI works in a non confrontational way with governments, companies, development agencies, NGOs and international organisations to seek a consensus to combat corruption. For more information please see www.transparency.org and www.transparency.org.uk
Attached is a description of the scope and purpose of the Bill
The sponsors of the Bill are:

Hugh Bayley
John Denham (Chair Home Affairs Committee)
Mike Gapes (Chair Foreign Affairs Committee)
Malcolm Bruce (Chair International Development Committee)
Chris Mullin (Former Minister for Africa)
Sally Keeble (Former International Development Minister)
Tom Clarke (Sponsor of the International Development (Reporting and Transparency)
Bill John Bercow
Gary Streeter
Tony Baldry
James Dudderidge
Norman Lamb

ENDS

TRANSPARENCY INTERNATIONAL (UK)
NOTES TO ACCOMPANY
DRAFT CORRUPTION BILL

Objectives

Transparency International (UK) (TI(UK)) joins the widespread concern of both the public and government that the United Kingdom's anticorruption legislation is outofdate, obscure and inadequately enforced. Successive Home Secretaries have promised new anticorruption legislation; but the only Bill, that presented in 2003, was roundly criticised by an all party committee of both houses; an alternative responsive to those criticisms seems no nearer. Accordingly, TI(UK), in the light of wide concern and debate, has commissioned a new draft Bill.

The key objective of producing this draft Bill is to reform the law of bribery in a way that will be readily understood by police, prosecutors, jurors and the public including – especially – the business and public sector communities and their advisers, both here and abroad. This Bill will be fully compliant with the UK’s international obligations.

The second main objective is to assist the United Kingdom to develop a clear antcorruption strategy, which can contribute effectively to the wide international concern that corruption is undermining achievement of a host of vital interests not least the attainment of the Millennium Development Goals and the creation of a more secure world in which terrorism and other pervasive crimes can be eradicated. TI(UK) acknowledges the allparty support that continues to be readily given to anticorruption measures.

Background

The current law of corruption rests on a mix of common law and statutes, principally those enacted in 1889, 1906 and 1916. The Law Commission published a consultation paper in January 1997 and published its proposals in March 1998. The draft legislation proposed by the Commission was adapted in a Draft Bill published by the Government in 2003 and referred for scrutiny to an allparty Joint Parliamentary Committee (JPC). The JPC’s report was very critical of the fundamental approach to defining bribery, which was based on an artificially extended concept of agency. It concluded that the Bill was unclear and suggested an alternative way of defining bribery. This was initially rejected by the Government, although in December 2005 it commenced a consultation process to see if an agreed way forward could be found.

The government’s proposals are still narrowly focused on reform of the law of bribery in isolation from the remainder of the law of corruption. TI(UK) urged that there should be more comprehensive and comprehensible legislation that would improve the prospects of successful prosecutions, particularly of foreign bribery by UK nationals and companies. It wishes to see flagship legislation reflecting

the importance of the role of the City of London as a conduit for world trade and investment;
The UK’s participation in international bodies and fora engaged in combating corruption
the UK’s leading role in the international war against terrorism;
the UK’s role in combating international organised crime;· the need for high standards of business integrity in order to maintain confidence in the UK’s equities and securities markets;
the UK’s role in supporting developing countries through the provision of international development aid, the promotion of transparent global markets, support for democratic government and the equitable use of world resources.

Content and Scope

In its formal content, this Bill follows the Government’s 2003 Bill. It however adopts a very different approach to specifying the principal offences – (Clause 1).

This Bill focuses on the real mischief, which is the improper conduct that is intended to result from a bribe.

There is a separate offence to cover bribery in the context of normal agency relationships (Clause2).

There is a further separate offence of bribery in the context of foreign public officials This will place beyond doubt that the UK will be compliant with both the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and the UN Convention Against Corruption (Clause 3).

A new offence of foreign bidrigging addresses a problem identified by the JPC that was not covered by the Government Bill and is not covered by the Enterprise Act 2002 which applies only in the UK (Clause 4).

A further new offence is designed to safeguard the integrity of sporting events by penalising cheating by “fixing” – major fixing in terms of the outcome of a match, game or contest (eg procuring a loss), or microfixing in terms of discrete parts of a match, game or contest (Clause 5). The activity is frequently rooted in betting and is linked to organised crime. It does not fit well into normal concepts of bribery. With London hosting the 2012 Olympics, it will send out an important message. The Gaming Act 2005 contains provisions against cheating in betting that will come into force in September 2007. Encouraged by the Sports Minister, a number of sporting bodies have signed up to a voluntary code against fixing. But, to be taken really seriously, there should be a specific criminal offence.

In dealing with the public function, TI(UK) considers it helpful, with an offence as covert as bribery, to retain the existing presumption in section 2 of the 1916 Act that a gift or payment is made corruptly unless it can be reasonably explained. A modern version of this section is included in the Bill and has been drafted so as to meet hypothetical human rights concerns (Clause 6).

A further distinction applies in relation to the public function, in that for the first time there is a duty to report actual or suspected bribery. Failure to report constitutes an offence. This is both to protect public officials who blow the whistle and to improve the obtaining of information on which to base investigations and prosecutions. A defence and safeguards are built into the relevant clauses (Clauses 8, 9 and 10).

In the corporate sector, there is a new duty on a UK company to take such steps as are reasonably open to it to secure that overseas subsidiaries and other foreign parties with which it enters into contractual arrangements do not engage in bribery. Breach of the duty is an offence. (Clauses 11 and 12). Under present law it is very simple for UK companies to be aware of (or wilfully blind to) bribing overseas that will help it to win business and yet not commit an offence in the UK. This is not provided for in the OECD Convention, but a country that is serious about eliminating foreign bribery would be expected to deal with thissituation. Companies that take normally prudent steps in relation to their foreign subsidiaries and other parties, would be unlikely to commit an offence under these clauses.

There is a long overdue widening of the express jurisdiction of the Serious Fraud Office to deal with cases of serious and complex corruption (Clause 15). Although the SFO is the lead agency in dealing with foreign bribery, it always has to find an element of fraud, before it has jurisdiction to investigate and prosecute. The Government has proposed another increase in the powers of the SFO (Consultation Paper – December 2005) and TI(UK) would support its inclusion in a corruption law reform Bill.

Comparison with Government Bill

TI(UK) in its Bill has omitted from its draft the following:

Proceedings in Parliament – abolition of the ancient rule that protects proceedings in Parliament from being referred to in legal proceedings for a corruption offence. TI(UK) sees no need for special provisions for parliamentarians, and recognises that this remains controversial.

Authorisations for intelligence agencies to commit what would otherwise amount to bribery. TI(UK) considers that, if needed at all, these provisions would be better in a Security Service Bill.

Consent to prosecution – the requirement for a separate consent of the Attorney General to prosecute a corruption offence. This very outofdate provision is regarded by TI(UK) as merit less in modern conditions.

Abolition of common law offence(s). Whilst this is superficially attractive, the retention of the better elements of the preexisting law can coexist with the new offences, and be properly reviewed in the light of experience of the newly worded offences.

Matters for inclusion in a New Government Bill

In the event that new Government legislation should come forward dealing with corruption, consideration could be given to including, in addition to clauses in the TI(UK) Bill, some others that TI(UK) has recommended for consideration: HM Revenue and Customs – mandatory disclosure of information to support criminal proceedings.

Criminal liability of corporations, unless this is to be dealt with more generally in other legislation.

A “books and records” offence similar to that which applies in the USA under the Foreign Corrupt Practices Act.

Trading in influence – to comply fully with Council of Europe and UN conventions against corruption.

Abuse/misuse of public office – a very useful offence to be able to prosecute where a full bribery offence may be impossible to prosecute.

Acknowledgements

TI(UK) wishes to acknowledge the generous financial contribution made by the Joseph Rowntree Charitable Trust to the project of producing this Draft Corruption Bill and the professional skills and patience of parliamentary agents, Bircham Dyson Bell, in working with TI(UK) in this endeavour.