You might think that the introduction of the Bribery Act in 2011 addressed the issues first identified by the Chartered Institute of Building (CIOB) in its 2006 report into bribery and corruption in the construction industry.
http://www.giaccentre.org/documents/CIOB.CORRUPTIONSURVEY.2006.pdf
But has much changed?
The 2006 report suggested bribery and corruption in the industry was common place. The CIOB’s latest report, published in September 2013, suggests that little has changed.
Of those surveyed, 49% of respondents believed that corruption remained common place in the industry, only a two per cent decrease since the 2006 survey. This is despite the introduction of the Bribery Act.
This report is not the only research suggesting a rather laissez-faire attitude towards bribery and corruption.
Research undertaken by Ernst & Young in 2012 suggested that a lack of prosecutions had led to questions over the Serious Fraud Office’s (SFO) willingness to enforce the Act. According to the research, only 26% of executives believed there was a willingness to prosecute cases of bribery and corruption.
A lack of high-profile action may have led to complacency: 37% of respondents in the CIOB report did not know whether their company had procedures or training in place to prevent bribery and corruption.
Does this mean that bribery and corruption are rife and the legislation a damp squib? Perhaps. However, since the CIOB report was carried out, the SFO has made it clear that it is ‘a prosecuting authority not an advisor’ and has mounted its first prosecution under the Bribery Act.
So do employers really need to be concerned about the Bribery Act? The answer is YES, despite the findings reported by the COIB.
Background
The Bribery Act 2010, introduced in July 2011, makes it an offence to bribe another person, receive a bribe or to bribe a foreign public official.
An offence is committed if it occurs in the UK or would constitute an offence had it been carried out in the UK and the person has a close connection with the UK. A person has a close connection with the UK if they are a British citizen or passport holder, resident of the UK, a body corporate under the law of the UK or a Scottish partnership.
The Bribery Act also states that it is an offence for a commercial organisation not to prevent bribery. An offence occurs if the person associated with the organisation bribes another person with the intention of obtaining or retaining business or business advantage for the organisation. That offence can be committed in the UK and overseas.
Individuals face up to ten years in prison and companies risk unlimited fines if they are convicted of breaching the Act.
There is a defence available to an organisation if the organisation has adequate procedures in place designed to prevent bribery. Guidance issued by the Ministry of Justice suggests that adequate procedures include the provision of appropriate policies and procedures (which are implemented), leadership from the top and regular risk assessments.
Why should you be concerned?
Criminal prosecution
It appears we are now entering a new era of enforcement. With the establishment of the National Crime Agency (NCA), the Home Office has gone on record to confirm that “we intend to produce new systems for reporting corruption and the NCA will lead and co-ordinate work to investigate corruption in the UK”.
Can we expect to see more prosecutions? Probably.
This summer the Serious Fraud Office (SFO) brought its first charges against individuals accused of violating the UK Bribery Act. While there is still an absence of any corporate prosecutions under the Bribery Act, the SFO has indicated that it has two live investigations of companies suspected to have breached the Act.
Criminal prosecution is not the only concern. Leaving aside the reputational damage, where does this leave you when dealing with your employees?
Bribery and corruption: complacency is not an option – key actions
• What should businesses be doing to protect themselves and their staff?
• Introduce or refresh existing anti-corruption, bribery and whistleblowing policies.
• Publicise both the content of those policies and where they can be found.
• Carry out regular risk assessments.
• Provide training and cascade down from board level to all employees.
• Ensure that the policies are observed and people understand their role and responsibilities.
• Introduce a confidential whistleblowing hotline.
Other stories
http://www.theconstructionindex.co.uk/news/view/professionals-admit-construction-is-rife-with-corruption
http://www.politics.co.uk/opinion-formers/ciob-chartered-institute-of-building/article/ciob-no-decrease-in-corruption-as-survey-claims-bribery-act
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