Since the Bribery Act 2010 came into force on 1st July this year, there has been a great deal of speculation as to whether its implementation will be an effective method of clamping down on corruption and corporate wrongdoing. The new legislation makes it a criminal offence for commercial organisations not simply to commit bribery but to fail to prevent bribery. There is, however, a full defence if the organisation has in place ‘adequate procedures’ to mitigate the risks facing the company.
It seems that the attention which originally surrounded the issue has dissipated in the light of that fact that, to date, there has only been one conviction under the Act. Last month, a court clerk was found guilty of accepting a Â£500 bribe in exchange for omitting to enter the details of a traffic summons on a court database. Clearly, this is not enough to act as a real deterrent to any corporate organisation acting on the wrong side of the law. Indeed, with the lack of prosecutions since the Act came into force, many businesses remain unaware of the content and risks associated with the Act – only last month we were asked to deliver a seminar to local businesses on the topic following feedback that they had little or no knowledge of the new laws.
Last month, Olympus, the Japanese electronics giant, became the front runner to put the Act on the map as a result of the current investigation by the Serious Fraud Office over allegedly questionable payments made to advisors during its acquisition of the UK listed company, Gyrus, in 2008. The group have admitted that they paid $687m (Â£434m) in ‘advisory fees’, equal to a third of the total acquisition cost.
Only four months since the Act came into force, it is perhaps unfair to say that Parliament’s intentions to help ensure that ethical businesses do not lose out has not materialised. Undoubtedly these sorts of investigations are time consuming and to be approached with the utmost care. Reputations are at stake, as Olympus knows only too well – the bribery accusations have already seen more than Â£2bn wiped off their market value.
Whether or not the Act has fulfilled its purpose as a deterrent to businesses that use bribery and corruption to win contracts, it is difficult to say. It will be interesting to see whether the promised ‘tough penalties’ , the only true deterrent, will be handed down to those found guilty under the new offences as more investigations and prosecutions come to the fore over the coming months.
If you require any advice in relation to implementing anti-bribery and corruption procedures in your business, or face investigation under the Bribery Act, our team of specialists will be happy to assist you.