Fasten your seat belts

By | 7th July 2011

Is this the correct advice to businesses which are now subject to the Bribery Act 2010?

After the thousands of words written about it over the past 18 months, the Bribery Act has now come into effect. As from July 1st 2011, British business has to face up to the reality of doing business under a statutory anti-bribery regime in much the same way as US business has done for over 30 years with its Foreign Corrupt Practices Act.

What does this mean for business? There are countless commentaries on the subject and, as they are readily accessible on the internet and in legal journals, I hesitate to add to the welter of information on the subject. Temptation gets the better of me in a small way so let me remind you, shortly, that:

  • There are four crimes under the Act, namely paying a bribe, receiving a bribe, bribing a foreign public official and less obviously, failure by a corporate to prevent bribery.   
  • If a corporate is found guilty of one of the crimes it faces an unlimited fine.
  • An individual can face imprisonment for up to 10 years or an unlimited fine or both.
  • There appears to be one defence. The Act refers to “adequate procedures” which must be in place designed to prevent bribery. The guidance published with the Act suggests there are 6 points to consider in this context. These are proportionality, commitment from the top of the business, risk assessment and due diligence, communication (which means the staff must be made aware of the risks facing the business) and monitoring and review.

It seems to me that much of this merely reflects the existing law prior to the Act except for the swingeing penalties to which I have referred. Lest anyone should think, however, that they or their business can safely ignore the Act, the Ministry of Justice has provided guidance in the form of an appendix setting out 11 case studies showing how the six principles may be applied in practice.

Hardly riveting stuff but, given the potential penalties, something which cannot be ignored.

What will be interesting to see in due course is the variety of “procedures” which companies put in place to try and take advantage of the one defence. That information will have to be available widely in the organisation and will undoubtedly need to be recovered electronically in future regulatory proceedings where a company seeks to argue that relevant staff were made aware of the procedures so that it can take advantage of the limited defence available.

We can undoubtedly help here and will be happy to do so when approached.

Which brings me back to the future. Recently I read an article in Oxford Today, the magazine for alumni of the university, by Dr James Martin and entitled Fasten your seatbelts, there’s turbulence ahead.

I must confess I had not heard of Dr Martin before but he is a benefactor of the university, through whose generosity the Oxford Martin School was set up as a unique interdisciplinary research initiative tackling global future challenges.

Dr Martin is also described as a futurologist. He predicts three crunches are coming which, while they may not cause the destruction of mankind, will certainly result in a race for the survival of the fittest. The three disasters are that our global footprint exceeds what the earth can support, that climate destabilisation becomes severe and that fresh water becomes insufficient to feed the Earth’s burgeoning population. As he says dramatically, “By mid-century, the Earth could be like a lifeboat that’s too small to save everyone.”

It is not all gloom and doom, however. Part of humanity will survive (it will be fairly gloomy and doom laden for those who do not) and “it will be a time when conventional work is done by machines, and humans spend their time on things that are uniquely human.”

I find that thought strangely comforting. I do not presume that I will be alive to see that day dawn or that even if I do not die first, I will survive any of the predicted crunches, but, as I have said before, we have to adapt to survive.

A truism perhaps, but it is already clear to me in the world of electronic disclosure that those who will survive and make a difference to or add value for their clients are those who adopt and embrace the new technologies which are designed to make the collection, analysis, process and review of electronic data a quicker and more cost effective process for their clients.

Those who do not embrace the changes will not survive. It is as simple as that.

In an earlier blog, I drew parallels with the fate of Ozymandias [Going the way of Ozymandias, 29th Sept 2009]. It could happen to any of us if we are not vigilant – rather like falling foul of the Bribery Act!!