Government bows to business concerns over Bribery Act

Cheers all round as the Government amends the Act to make it more palatable to business. But will it still have sufficient teeth?

by Hannah Prevett
Last Updated: 19 Aug 2013
It’s fair to say that the original draft of the Bribery Act didn’t go down too well with UK plc: business leaders described it as ‘onerous and draconian’, the general consensus being that it had been cobbled together too hastily and was too vague as a result. Well, it seems the Whitehall legal eagles have put their heads together and come up with a more workable version: the new draft removes lots of the ambiguity around corporate hospitality, supply chain and due diligence. What’s more, businesses get an extra three months to prepare: the Act will now come into force on 1 July, rather than next week (as originally proposed). What’s not to like?

Unsurprisingly, the general reaction to the revised act has been largely positive. Businesses (not to mention jolly-loving journos) will breathe a sigh of relief to hear that confusion around corporate hospitality has been cleared up: it will no longer be banned altogether, and for any prosecution case to succeed in court, they’d have to prove that the hospitality was intended to ‘induce improper conduct’. Another amendment means companies won’t be held accountable for the actions of their suppliers. Even the CBI - which just weeks ago slammed the Act as ‘not fit for purpose’ – seems happy with the changes.

But Justice Secretary Ken Clarke hasn’t been able to please everyone. There’s been some criticism of the fact that foreign companies listed in London may be exempt from the new anti-corruption laws; he said that a London listing didn’t mean a company would necessarily have to abide by the new Bribery Act. You can see why not: if London is to remain competitive, we need to keep attracting as many good companies as possible to come and do business here. But investors are enraged, arguing that we need to protect the integrity of the London market. Which is an excellent point too.

What’s more, Liz David-Barrett, a research fellow at the Oxford University Centre for Corporate Reputation, warned that the Bribery Act fails to take cultural differences into account when businesses are trading internationally. One man’s slap-up meal/ visit to a gentleman’s club is another man’s bribe, she says. And who wants to be at the centre of a corruption trial? As she rightly points out, whether found guilty or not, this kind of thing can be hugely damaging to a company’s reputation.

There are also still question marks over the actual implementation of the Act. Clarke said it would be done in a ‘workable, common sense way’, but firm details were fairly thin on the ground. Campaigners will just have to hope the new legislation has sufficient teeth. At a time when the Serious Fraud Office (the subject of a big feature in next month’s MT, incidentally) is being subject to some fairly savage budget cuts, is it going to have the time and the money to pursue those who fail to comply with the new laws?
 

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