Bribery Act 2010 update 2
Our last update advised on what to expect from the Act and what employers need to be aware of. This update includes information regarding possible defences that may be considered by organisations.
If the corporate offence does result in an organisation receiving sanction as a result of the activities of an individual (or individuals), there is a potential defence that the organisation can use. The defence would require an organisation to demonstrate that it had adequate procedures in place to stop any bribery from occurring. So how do you do this?
‘Adequate procedures’ are not defined in any detail in the Act. Clause 9 of the Act requires the government to give guidance ‘about procedures that relevant commercial organisations can put in place to prevent persons associated with them from bribing’. In September 2010 the government announced the start of an eight week consultation period on the guidance that is to be given. The consultation document can found on the Ministry of Justice website.
Whilst waiting for the guidance, now expected in January 2011, organisations might find it useful to refer to the points about ‘adequate procedures’ set out in December 2009 by Lord Bach (who was then the Parliamentary Under Secretary of State). They were as follows:
• There should be an anti-corruption culture in the organisation, led by its directors.
• There should be a named senior individual responsible for anti-corruption procedures in the organisation.
• Risk assessments should be in place to determine the potential risk of bribery occurring.
• Organisations should have a clear code of conduct that addresses anti-corruption issues.
• Penalties for participating in corrupt activities should be clearly spelt out in employees’ contracts of employment.
• Organisations should have a gifts and hospitality procedure that sets out what is and what is not acceptable and ensures that corruption does not occur.
• Employees should be given training in anti-corruption matters.
• Such financial controls should be in place that the possibility of corruption occuring is made unlikely.
• Such whistleblowing procedures should be in place that employees could report any matters relating to corruption without fear of retaliation.
It is important to note that the guidelines to be issued by the government will be just that – guidelines. It will be for the courts to make the ultimate judgment as to whether an organisation did or did not have ‘adequate procedures’ in place. It is likely that the courts will pay regard to the size and complexity of the organisation in determining what is ‘adequate’, with the controls and checks required in a large organisation likely to be more thorough and detailed than those in a small organisation.
Organisations need to start a plan of action now to protect their interests. Doing nothing isn't an option.
If you are considering updating policies and procedures, this may well be the time to be proactive and do so. Fairways can help you through this. For more information on available services look at our website http://www.fairways-uk.com/.
If the corporate offence does result in an organisation receiving sanction as a result of the activities of an individual (or individuals), there is a potential defence that the organisation can use. The defence would require an organisation to demonstrate that it had adequate procedures in place to stop any bribery from occurring. So how do you do this?
‘Adequate procedures’ are not defined in any detail in the Act. Clause 9 of the Act requires the government to give guidance ‘about procedures that relevant commercial organisations can put in place to prevent persons associated with them from bribing’. In September 2010 the government announced the start of an eight week consultation period on the guidance that is to be given. The consultation document can found on the Ministry of Justice website.
Whilst waiting for the guidance, now expected in January 2011, organisations might find it useful to refer to the points about ‘adequate procedures’ set out in December 2009 by Lord Bach (who was then the Parliamentary Under Secretary of State). They were as follows:
• There should be an anti-corruption culture in the organisation, led by its directors.
• There should be a named senior individual responsible for anti-corruption procedures in the organisation.
• Risk assessments should be in place to determine the potential risk of bribery occurring.
• Organisations should have a clear code of conduct that addresses anti-corruption issues.
• Penalties for participating in corrupt activities should be clearly spelt out in employees’ contracts of employment.
• Organisations should have a gifts and hospitality procedure that sets out what is and what is not acceptable and ensures that corruption does not occur.
• Employees should be given training in anti-corruption matters.
• Such financial controls should be in place that the possibility of corruption occuring is made unlikely.
• Such whistleblowing procedures should be in place that employees could report any matters relating to corruption without fear of retaliation.
It is important to note that the guidelines to be issued by the government will be just that – guidelines. It will be for the courts to make the ultimate judgment as to whether an organisation did or did not have ‘adequate procedures’ in place. It is likely that the courts will pay regard to the size and complexity of the organisation in determining what is ‘adequate’, with the controls and checks required in a large organisation likely to be more thorough and detailed than those in a small organisation.
Organisations need to start a plan of action now to protect their interests. Doing nothing isn't an option.
If you are considering updating policies and procedures, this may well be the time to be proactive and do so. Fairways can help you through this. For more information on available services look at our website http://www.fairways-uk.com/.
posted by Liz @ Fairways at
10:12
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