'Onerous and draconian' - business boos Bribery Act

New anti-corruption legislation has had the thumbs-down from businesses. But what can they do to avoid falling foul of its strictures?

by Emma Haslett
Last Updated: 06 Nov 2012
It’s fair to say the new Bribery Act hasn't gone down well with UK plc: already slammed as ‘not fit for purpose’ by the CBI, it was described yesterday as ‘onerous’, ‘draconian’ and ‘completely unworkable’ at a gathering of business leaders yesterday at the House of Lords. At the event, which was hosted by CSR consultants Good Corporation on Wednesday, the consensus was that the Act has been compiled too hastily and worded too vaguely. But new guidance is due out this week - and three months later, the new rules will become law. So, like it or not, businesses are going to have to find a way to comply...

According to those present, corporate hospitality is one of the biggest issues. The wording of the act itself is worryingly ambiguous, saying that while it is ‘not seeking to penalise expenditure on corporate hospitality for legitimate commercial purposes... lavish corporate hospitality can be used as a bribe to secure advantages’. That’s led to plenty of speculation. As one person at the lunch put it: ‘It has been implied that if [companies] hand out so much as a key-ring, they would be in trouble’. In fact, as an indication of just how worried these corporate types were, a sponsor of one of the UK’s favourite sporting events questioned whether there was any point continuing.

In many ways, there’s a sense that this legislation may turn out to be something of an own goal for the Government. On Tuesday, the Guardian reported that companies listed on the London Stock Exchange but with ‘no other presence in the UK’ (again - pretty vague) won’t be liable under the Act - which means that while UK plc spends hours scrutinising its behaviour, foreign competitors are free to merrily splash the cash at prospective clients, without fear of prosecution.

And there are cultural issues, too: at a time when the Government is keen for businesses to establish relationships with developing economies, it’s interesting that it should choose to bring in legislation that effectively outlaws facilitation payments - a practice that remains extremely prevalent in places like China, Russia and Africa. (You only need to read the latest from our blogger in Malawi to realise that.)

The conclusion on Wednesday was that it’s now more important than ever to put a strict policy in place in order to comply with the legislation. On corporate hospitality, businesses need to replace wishy-washy terms like ‘proportionate’, with clear recommendations for their employees, such as a monetary limit. Once businesses have done as much as they can to mitigate, as one attendee pointed out, it’s in the hands of the ‘judges, prosecutors and juries’ to determine whether it’s enough. Which doesn't sound particularly reassuring...

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