Author: Mike Tremeer
In November 2011 an administration clerk at Redbridge Magistrates’ Court in Essex, became the first individual to be convicted of a personal offence under the Bribery Act 2010 (the Act) when he was sentenced to three years’ imprisonment for bribery.
However, of greater concern to companies may be the corporate offence of failing to prevent bribery by a person associated with their organisation, which carries an unlimited fine for the company, as a penalty. Below, employment solicitor Mike Tremeer of Fladgate LLP sets out 10 points for organisations to consider which will limit this risk.
1. Adequate Procedures
Section 7 (2) of the Act provides a defence against the corporate offence where companies have in place “adequate procedures” to prevent bribery. Employers should act now to put these procedures in place to give themselves the best opportunity to rely on the defence if necessary.
2. Government Guidance
In March 2011, the Ministry of Justice produced guidance to assist companies in understanding what “adequate procedures” are. The guidance confirms that there is no “one size fits all” policy that can be applied. A number of principles are set out and these, together with the size and resources of the company concerned, will be considered when determining if adequate procedures are in place and, thus, if the defence may be relied upon.
3. Broad Principles
The guidance refers to six broad principles that should be considered by a company seeking to rely on the defence which are discussed below.
4. Proportionate Procedures
The guidance confirms that “adequate procedures” involve not only having written anti-bribery policies and communicating these to employees, but also having effective procedures in place to enforce these policies. The policies and procedures implemented are only expected to be proportionate to the bribery risk faced – SMEs will not be expected to have the same level of documentation and protections as may be necessary for large multinational organisations.
5. Top Level Commitment
A general culture that bribery is not acceptable in any circumstances should be promoted from the top of the organisation downwards. Senior employees or directors are expected to be committed to the anti-bribery policies that are put in place and should take an active part in communicating, developing and enforcing them.
6. Risk Assessment
Organisations are expected to carry out a risk assessment to establish their potential exposure to bribery. This assessment should be completed on a periodic basis and be well documented.
7. Due Diligence
Companies will be expected to carry out a review of existing and new associations or relationships with organisations, agents or partners to ensure that they do not pose any increased risk to bribery taking place.
Anti-bribery policies and culture should be well communicated to all employees and associates of the company and consideration should be given to providing training to help identify and prevent bribery issues.
9. Monitoring and Review
Once policies and procedures are in place they must be kept up to date and be enforced effectively. Any bribery issues that do arise should be proactively and swiftly addressed.
10. Hope for the best!
It seems inevitable that a company will be prosecuted under the corporate offence sooner or later. It would not be surprising to see prosecuting authorities attempt to make an example of a high profile organisation and so companies would be well advised to take action now to avoid falling victim.
Mike Tremeer, Solicitor, Fladgate LLP (firstname.lastname@example.org)