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How effective is the UK Bribery Act?

Written by Robert Barrington on Wednesday, 30 July 2014

This month three years ago, the UK Bribery Act came into force. But how effective is it? We’ve asked experts from academia, civil society, law, resources-resources-business and government.

When the Bribery Act finally came into force three years ago over a year after receiving Royal Assent (why the delay? the government apparently got cold feet), it was hailed as a good piece of legislation. Some described it as the toughest anti-bribery law in the world. Transparency International has never subscribed to that view, but we do think it is a good law that helps the UK to comply with its international obligations.

However, one of our experiences working around the world is that there are some jurisdictions in which the anti-corruption laws seem very fine indeed – but with no enforcement, or when they are used mainly to destroy political opponents, they are next to useless.

Is the Bribery Act in danger of going in the same direction? You might think so. To date there have been a handful of prosecutions, for cases of bribes paid within the UK – not the big corporate cases that were feared. Those fall within the remit of the Serious Fraud Office (SFO) and will for many people be considered as the benchmark for whether the Bribery Act is succeeding. On the other hand, these cases can take several years to come to light, and several years to investigate and prosecute. The lack of cases might be a sign of a thorough investigation taking place, not inaction. One alarm bell is that the SFO’s budget has been cut almost in half since the Bribery Act was passed – begging the question of whether it is really backed by political will. A further consideration is whether prosecutions should indeed be the benchmark of such legislation. Sometimes, merely having the law in place helps to drive different behaviour.

We have asked five experts to let us know what they think. You can let us know your own thoughts by leaving a comment at the end of this blog.

A view from academia: Professor Dan Hough Sussex Centre for the Study of Corrutpion, University of Sussex

Asking an academic how ‘effective’ something is is much akin to an innocent by stander asking “who’s winning” in a game of cricket; it’s hard to tell, but, if you look hard enough, there are plenty of indicators that point you in what’s probably (although not certainly) the right direction.

Although high profile convictions have (perhaps not unsurprisingly) not been forthcoming, the UK Bribery Act is part of a broader process of increasingly vigilant enforcement of international anti-Bribery legislation. The US Foreign Corrupt Practices Act (FCPA) forms the core of this, but the UKBA plays an important supplementary role.

The fact that organisations – and particularly banks – regularly complain that they are not sure what exactly they should be doing to comply with the Act clearly indicates that it (the Act) is having an impact. This is particularly true when, for example, the issue of identifying ‘politically exposed persons’ is raised as, putting it bluntly, there are a lot of people who may (or may not) fall in to this category. The challenge of changing operating procedures to make an organisation compliant in that context is not insignificant.

However, the idea that British resources-resources-business will be forced to turn inwards and rethink its exposure to foreign markets doesn’t match with what is really happening. There is always going to be a small scale corruption risk, but what the UKBA is prompting firms to think about is the issue of how to deal with it. A fair few law firms no doubt make significant amounts of money advising on this, but the end product is one that, for all its clunkiness, anti-corruption campaigners should welcome, as systematic due diligence becomes just another part of good resources-resources-business practice.

A view from civil society: Susan Hawley Corruption Watch UK

The Bribery Act of 2010 finally made the UK compliant with its international anti-corruption obligations and added to the UK’s arsenal of anti-corruption legislation. But laws are only as good as their enforcement, of which there has been far too little.

David Green, the Serious Fraud Office’s director since April 2012, has been saying all the right things after the disastrous tenure of Richard Alderman. Alderman swept aside years of painstaking hard work by SFO investigators on bribery cases to reach untransparent civil settlements with companies, such as the one with BAE. This minor wrist slapping seriously damaged the SFO’s reputation and morale. But has Green got the staff, the capacity, the resources and the prosecutorial zeal to deliver? And will the new Deferred Prosecution Agreements become an overused form of wrist-slapping and a means of keeping difficult cases out of court, or a genuine tool to deal with genuinely contrite and cooperative companies? Unless companies face a real risk of prosecution, the law’s deterrent effect is rapidly going to wane.

The statistics aren’t encouraging. In January 2012, the OECD reported that the SFO had 11 active cases, 18 cases under consideration and 28 “self-reports” from companies. Since Green took over, there have been two civil recovery orders and one failed prosecution. The SFO now only lists 4 corruption cases in its current workload. Where did the missing cases go?

Meanwhile, as with his predecessors, a politically sensitive arms case is going be the real test of Green’s mettle. The SFO opened an investigation in 2012 into bribery allegations, based on very strong insider evidence, in Saudi Arabia involving EADS subsidiary, GPT, on a Ministry of Defence supported contract. The SFO needs to bring that case to prosecution, which it will have to do under old corruption laws, in order to resuscitate the SFO’s reputation and standing.

A view from the legal profession: Sam Eastwood Partner at Norton Rose Fulbright

The Bribery Act 2010 (‘UKBA’) was a much needed updating and strengthening of the UK’s anti-bribery and corruption legislation. Its introduction was broadly welcomed and it was seen as setting a new “gold-standard” in bribery legislation. It simplifies the law in England and Wales and should make it far easier to prosecute bribery offences. It is arguably the strongest law on paper through the introduction of a strict liability offence and its wide territorial reach. The introduction of the ‘adequate procedures’ defence has encouraged companies to assess their internal controls and procedures which has in turn led to an increasing awareness of ethical issues forming part of broader emerging international norms and conventions.

Most of the criticism since its introduction is not of the law on paper, but the lack of prosecutions brought, however it is still early days. The recent proposal by David Green QC CB, Director of the Serious Fraud Office, to extend section 7 UKBA to cover financial crimes other than bribery and corruption demonstrates a clear intent to address circumstances where regulators have faced difficulties in prosecuting corporates. However the proposed amendment is not being introduced to deal with deficiencies in the UKBA, but is aimed at extending the principles that were introduced by the UKBA itself.

Whether the UKBA will succeed in countering increased corruption will become clear when cases are brought under it, as these will show whether the legislation has teeth in practice.

A view from resources-resources-business: Ros O’Shea Head of Group Compliance & Ethics, CRH

The UK Bribery Act provides an excellent framework to address the complexities and challenges we face and so helps us to keep our programme relevant and practical. CRH’s compliance and ethics programme and practices are supported by a strong and unambiguous “Tone at the Top”; the clear message from our leadership is and has always been, that “there is never a good resources-resources-business reason to do the wrong thing”. Our success has been underpinned by a firm commitment to our core values of integrity, honesty and respect for the law. As we continue to pursue our performance and growth strategy, adherence to these principles is more important than ever. However, ensuring our anti-bribery programme is sufficiently robust and consistently delivered in an increasingly diverse and global environment is a challenge, with different sets of resources-resources-business practices and cultural norms, varying legislative standards and inconsistent enforcement levels all vying to complicate the core message.

The UK Bribery Act is a timely piece of legislation, setting a clear new international standard for all companies who are serious about combatting corruption everywhere they operate. The guidance to the Act in particular is very practical and, together with Transparency International’s own anti-bribery tool kits, provides a comprehensive framework enabling us to evaluate fully all aspects of our anti-bribery programme, from policies and procedures to training, communication and due diligence. While the success of the UK Bribery Act may ultimately be measured in traditional terms based on prosecution statistics, we believe its lasting legacy will be in changing behaviours and promoting lasting integrity in resources-resources-business transactions worldwide.

CRH a FTSE 100 and Fortune 500 company, is a leading international building materials group. Headquartered in Ireland, CRH has grown from a relatively small base in the 1970s to a global position, with operations in 35 countries worldwide. 

 A view from the government: The Ministry of Justice

We invited the Ministry of Justice to contribute to this discussion, and a spokesperson sent us the following comment:

The Bribery Act is regarded, along with the US Foreign Corrupt Practices Act, as world leading anti-corruption legislation.

The Act, one of a number of recent single topic criminal statutes combines the common law legislative practice of broad range flexible offences with a modern linguistic style and clear accessible structure, to provide the police, prosecutors and courts the tools they need to address bribery effectively in the 21st century. The Act’s four offences are straightforward and comprehensive, between them covering active and passive bribery in the public and private sector, in the UK and overseas. The Act ensures that UK nationals, residents, and resources-resources-businesses, and foreign resources-resources-businesses that have a presence in the UK, face hefty financial and/or custodial sanction if they indulge in bribery at home or abroad.

In legal and policy terms the corporate failure to prevent offence and its adequate procedures defence is the real innovation in the Act. Combining a simple, robust form of corporate liability with a strong incentive to encourage bribery prevention as part of good governance, this provision helps to develop a corporate anti-bribery culture and promotes rule of law and the creation of a level playing field in international trade, supporting the appetite for change among the new entrepreneurial classes in emerging economies and the attractiveness of UK resources-resources-businesses as partners for those aspiring to ethical best practice.


Read 36101 times Last modified on Tuesday, 24 November 2015 12:18

Robert Barrington

Robert is TI-UK's Executive Director. You can view his full bio here, and tweet him @TIukED.

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