The Bribery Act 2010 This was passed on 8 April 2010 and, as noted above, whilst it was due to come into force in April 2011, that has now been delayed until at least October 2011. The Act is very widely drawn, and is not just restricted to the UK or UK companies. It seems that the UK courts will have jurisdiction if an offence is committed by someone with a close connection with the UK, or by a corporation that does business in the UK, regardless of where the alleged offence was carried out. The new Act covers the following offences: n Section 1: Bribery – the offering, promising or giving of an advantage;
n Section 2: Being bribed – requesting, receiving or agreeing to receive an advantage;
n Section 6: Bribery of foreign officials; and n Sections 7-9: Corporate offence of failing to prevent bribery.
Potential penalties range from unlimited fines for companies
to 10 years’ imprisonment and unlimited fines for individuals. For companies, there is another potential penalty. Regulation 23(1)(c) of the Public Contracts Regulations 2006 in the UK states that a public authority shall treat as ineligible and shall not select a contractor if that public authority has actual knowledge that the contractor or any of its directors or any other person who could be said to represent the contractor has been convicted of bribery. That said, it is the new offence of failing to prevent bribery that has attracted the most comment, mostly along the lines of ‘what does it actually mean?’.
determines that the Contractor has engaged in corrupt, fraudulent, collusive or coercive practices, in competing for or in executing the Contract, then the Employer may, after giving 14 days’ notice to the Contractor, terminate the Contractor’s employment under the Contract and expel him from the Site, and the provisions of Clause 15 shall apply as if such expulsion had been made under Sub-Clause 15.2 [Termination by Employer]. ‘Should any employee of the Contractor be determined
to have engaged in corrupt, fraudulent or coercive practice during the execution of the work then that employee shall be removed in accordance with Sub-Clause 6.9 [Contractor’s Personnel].’ Note that this sub-clause is widely drawn, as it refers
Anyone concerned about the impact of the Act would be well advised to consider what the government’s current position is
52 ECA Today March 2011
to both ‘competing for’ and ‘executing’ the works. The Multilateral Development Bank (MDB) FIDIC contract is particularly pertinent, as during 2010, the World Bank revised its guidelines for the ‘Selection and Employment of Consultants’ to reflect an agreement amongst the MDBs to cross-debar firms and individuals found to have violated the fraud and corruption provisions of their respective procurement guidelines. Paragraph 1.11(e) states that: ‘A firm or an individual sanctioned by the Bank in accordance with subparagraph (d) of paragraph 1.22 of these Guidelines or in accordance with the World Bank Group anticorruption policies and sanction procedures shall be ineligible to be awarded a Bank-financed contract, or to benefit from a Bank-financed contract, financially or otherwise, during such period of time as the Bank shall determine’. The World Bank duly keeps an open register of debarred firms on its website.
What does this mean? On 14 September 2010, the Ministry of Justice launched a consultation on the make-up of the proposed guidance about procedures that commercial organisations can put in place to prevent bribery. It is intended that this guidance will assist companies with putting proper bribery prevention procedures into place; in other words, providing a defence to the section 7 offence of failing to prevent bribery. The government will then publish the guidance as section 9 of the Bribery Act 2010 before the Act comes into force. The Consultation Paper confirms how seriously the government takes the new legislation, noting that the new criminal offence of a failure to prevent bribery under section 7 of the Act ‘reflects a general recognition that there is an important role to be played by business itself in ensuring that commerce is undertaken in an open and transparent manner. The new law will introduce a clear and robust approach and is intended to encourage commercial organizations to take steps to address the risks of bribery’. Unfortunately the guidance, in its current form, is pitched
at quite a high level. And such has been the criticism that the government has delayed the introduction of the Act, in order that it can issue further guidance. For example, one problem with the guidance is that the use of ‘may’ rather than ‘should’ suggests that it is not intended to provide an exhaustive prescriptive set of rules. The reason given for this is the wide variety of type and size of organisations which the guidance needs to address. In particular, the guidance provides no answer to the question of when, under section 7, a person will be considered to be ‘performing services on behalf of the organisation’. In other words, it does not explicitly
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