The consultation covers all of the UK, other than Northern Ireland where there is to be a separate, parallel consultation, and closes at 5pm on 8 November 2010.
Draft guidance on "adequate procedures"
The Act, which is due to be implemented in April 2011, contains a new offence which can be committed by a UK body corporate or partnership, or any entity which carries on business or "part of a business" in the UK, where a person performing services on its behalf, bribes a person, anywhere in the world. The only defence to that offence is where the corporate has in place "adequate procedures" designed to prevent bribery occurring on its behalf. Under section 9 of the Act, the Government is to publish guidance on "adequate procedures", the objective of which is to support businesses to determine the sorts of bribery prevention measures they may consider putting in place. For a more detailed explanation of the Act and its background, visit our Anti-Corruption Zone by clicking here.
As part of the consultation process, the MoJ has now published and invited comments on draft section 9 guidance which is "designed to help commercial organisations of all sizes and sectors understand what sorts of procedures they can put in place to prevent bribery from occurring within them. It is designed to be of general applicationis not prescriptive and is not a one-size-fits-all document...[it] ." To this end, the draft guidance sets out "Six Principles for Bribery Prevention", together with commentary on each. In summary:
- Top level commitment - "...the theme is making the message clear, unambiguous and regularly made to all staff and business partners";
- Risk Assessment - "this is about knowing and keeping up to date with bribery risks you face in your sector and market";
- Due diligence - "this is about knowing who you do business with; knowing why and to whom you are releasing funds and seeking reciprocal anti-bribery agreements...";
- Clear, Practical and Accessible Policies and Procedures - "this concerns applying them to everyone you employ and business partners under your effective control and covering all relevant risks...";
- Effective implementation - "this is about going beyond 'paper compliance' to embedding anti-bribery in your organisation's internal controls, recruitment and remuneration policies, operations, communications and training on practical business issues";
- Monitoring and review - "this relates to auditing and financial controls that are sensitive to bribery and are transparent, considering how regularly you need to review your policies and procedures and whether external verification would help."
The Government's stated aim is that these six principles are "outcome-focussed and flexibleare not intended to provide an exhaustive or prescriptive list of the factors that organisations might consider if faced with similar circumstances but rather as illustrative context to the six principles", leaving the bespoke tailoring of policies and procedures to individual organisations themselves according to their size and particular risk profile. That the Government has adopted a broad, principles-based approach in the guidance comes as little surprise. However, it is interesting that the MoJ has published with the draft guidance a series of "illustrative scenarios" covering key areas of concern to businesses, including intermediaries and agents, joint ventures and corporate hospitality. Under each scenario, the MoJ has included a series of questions which "." While these scenarios will certainly help to focus minds on the areas where businesses may be exposed to bribery risk (and, in particular under the new corporate offence), it is disappointing (and somewhat surprising) that these scenarios will apparently not form part of the guidance itself.
The publication of draft guidance at the consultation stage is to be welcomed, providing businesses with greater clarity as to the form and content of the final guidance and the opportunity to consider now what steps they may need to take to ensure that they are compliant when the Act comes into force in April next year. Given that the form and content of the guidance is known (albeit in draft form), businesses should now (if they have not already done so) be taking active steps to ensure that their procedures are "adequate"; there can be no excuse for delaying this exercise.
The issue now is whether, in this short period of time during the consultation process, businesses will take the opportunity to reflect on whether their own procedures accord with the Government's draft guidance and to comment on the draft guidance. The real question will then be whether business feedback will really influence the form and content of the final guidance.