The Bribery Act
Legal Eagle / 29 July 2011
Organisations are rethinking policies with the new Bribery Act coming into effect
Everything you need to know about employment law. This month… New bribery law challenges line managers
Bribery and corruption is back on the leadership agenda with the implementation of the Bribery Act 2010. The Act, which finally came into force in July, sees the introduction of a ‘corporate offence’, which applies to commercial organisations that fail to prevent the payment of bribes by their employees. With the consequences of involvement in bribery ranging from investigation, prosecution and unlimited fines for companies to possible imprisonment for individuals, the new legal framework poses particular challenges for managers tasked with developing appropriate policies to safeguard compliance.
In practice, there is no ‘one size fits all’ approach. While guidance has been issued by the Ministry of Justice, each organisation will still have to decide on the most effective bribery prevention measures for their particular sector.
A zero-tolerance approach towards bribery and corruption must be supported from the top down. The consequences of engaging in bribery or corruption should be clearly communicated, both internally and externally, with appropriate action if policies are breached.
Amanda Jones, Partner and head of the employment department, Maclay Murray & Spens LLP
A risk-based approach, underpinned by an initial assessment and ongoing review, is essential. The nature and extent of an organisation's exposure to potential external and internal risks of bribery should be assessed and documented periodically. Particular attention should be paid to remuneration and compensation structures which may encourage risk-taking, as well as the general level of understanding among employees of the bribery and corruption risks.
It is essential to develop clear, practical and accessible procedures. To tackle this challenge, organisations should put in place policies on a wide range of areas, including payments, corporate hospitality, gifts, travel expenses, political and charitable contributions, alongside the updating of existing whistleblowing and disciplinary policies.
For organisations reliant on third party representatives or business partners, a risk-based due diligence process should be carried out before engaging any potential partners. They should also be fully briefed and committed to any anti-bribery policies.
A zero-tolerance approach towards bribery and corruption must be supported from the top down. The consequences of engaging in bribery or corruption should be clearly communicated, both internally and externally, with appropriate action if policies are breached.
Where a case of bribery is uncovered, the defence to the new corporate offence is only available where an organisation can demonstrate it has considered the risks of bribery occurring in its market sector and established appropriate procedures to address those risks. The ongoing involvement of line management will therefore be a key factor in demonstrating a clear commitment to tackling bribery and corruption.
Source: Amanda Jones is a partner and head of the employment department at Maclay Murray & Spens LLP