To ensure your business avoids liability under The Bribery Act 2010, it’s important that you and your management team carefully consider whether the current measures you have in place have you covered. Failure to create and maintain sufficient policies and procedures can result in large penalties for businesses, and the potential for civil and criminal charges against those involved too. So, putting together carefully considered policies will help you ensure you comply with the Bribery Act and successfully protect your business. Read on to find out more about the details of The Act and some steps you can take to ensure compliance.
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When did The Bribery Act come into force?
The Bribery Act 2010 (the Act) came into force on 1 July 2010 with the aim of promoting anti-bribery practices amongst businesses by introducing a corporate offence of failure to prevent bribery by anyone working on behalf of a business.
What does the Bribery Act cover?
There are two general criminal offences under the Act:
- The first covers the offering, promising, or giving of a bribe (active bribery).
- The second might be requesting, agreeing to receive, or the accepting of a bribe (passive bribery). These offences apply either in the UK or abroad.
What are the penalties for breaching the bribery act?
The Act increased the maximum penalty for bribery from seven to ten years imprisonment, with an unlimited fine. Therefore, you need to ensure that your business avoids committing a criminal offence by demonstrating that you have clear and adequate procedures in place to prevent bribery intended to get or keep business or an advantage in business, for you.
Genuine promotional and other business expenditure such as tickets for sporting events, promotional gifts or taking clients to dinner would not qualify as bribery under the Act, but it is prudent to question more substantial gifts and show that you have made a genuine effort to deter bribery in your business.
What are the key principles of the Bribery Act 2010?
To comply with the Act and demonstrate that you are doing what you can to prevent bribery in your business, there are six principles set out by the Ministry of Justice about how the Act will apply to businesses. These are:
- Proportionality - Action taken by your business should be proportionate to the risk of bribery in the specific sector it operates in, how it operates, the people it deals with and influence it might have, amongst other things. The size and resources of your business will also be considered when looking at what you have done to prevent bribery.
- Top level commitment – Directors and senior management are best able to ensure business is conducted without bribery and so should be involved in instigating, drafting, and implementing any policies your business must prevent bribery.
- Risk Assessment – It may be that you believe your business has little or no risk of bribery, but carrying out a risk assessment will demonstrate that you have at least considered this and the nature or extent of exposure to bribery, if any.
- Due Diligence – You must be able to demonstrate that you have a risk-based approach to your business relationships and are aware of what the risks are, whether this is relating to those who supply goods or services or have any other dealings with your business.
- Communication – Your business needs to clearly communicate policies and procedures to staff and others who have dealings with your business. You might advise people where to find these on your business’ website, for example, and you may consider offering additional training to raise awareness about bribery.
- Monitoring and Review – Regular reviews of your risk and policies should be carried out, as risks to your business may change.
How to ensure your business complies with the Bribery Act 2010
Recruitment
You might want to consider if additional background checks on employees such as criminal record checks, references and bankruptcy checks are required before hiring staff to work in your business. If there is a personal relationship between a staff member or another business that your organisation deals with, you should ensure that you document this and that dealings are as transparent as possible.
Training
It is advisable that you include anti-corruption an anti-bribery training and policies to all staff that work with and for your business, whether they’re employees, workers, agency staff, contractors or even volunteers right at the beginning of the working relationship. This makes clear from the outset that your business has taken action to make staff aware of your business’ stance on bribery and highlights the policies and procedures to them. You should also ensure that regular refresher training is provided where there are changes to your business’ anti-corruption or anti-bribery policies or if risks change for your business.
Discrimination
You must be careful not to discriminate when assessing risk and avoid racial stereotyping when dealing with different nationalities. You will need to look at factual, objective evidence when performing your risk assessment and base your business’ risk on that. If you would like more assistance with this, please contact our expert employment solicitors.
Expenses
You need to ensure that you have a clear idea of what types of expenses your staff have when working for your business. You should ensure that there is a clear and comprehensive expenses policy, which is regularly reviewed and updated and is accessible to staff, and preferably only makes payments of expenses upon an audit of receipts provided by staff after the expenditure has been made.
Gifts and hospitality
This is perhaps the most obvious area where you will need to ensure that you keep a close eye on where money is being spent, how much and on whom.
You should have a clear, written policy setting out your approach to hospitality, including clear guidance on both the giving and receiving of gifts. This must be appropriate to your size and sector of business and your business’ custom and practice. You may decide that staff are prohibited from accepting any business gifts. Alternatively, you could allow staff to accept business gifts if certain requirements are met, such as if they fall below a maximum value your business sets and written records are kept. In terms of gifts or entertainment you allow staff to provide to others, you may require prior approval to be granted by a senior manager and written records to be kept of what has been approved, when and the reason for the gift.
Political or charitable donations and sponsorships should also be reviewed regularly by your business and a clear stance on this recorded in your business’ policy documents.
Contracts with employees and other workers
You may consider that the importance of compliance with your business’ anti-corruption and anti-bribery policies is such that a specific contractual requirement is made part of an employee’s or other workers’ contract. This could state that they must comply with those policies and procedures and failure to do so would lead to disciplinary actionunder your disciplinary procedure. This might be particularly important if your business is likely to have high risk factors in respect of corruption and/or bribery.
Whistleblowing policy
Your business should have a comprehensive and up-to-date whistleblowing policy and ensure that all workers who are expected to comply, are aware that it exists, where they can access it and that they understand how it applies. If you believe your business is particularly at risk of exposure to bribery and/or corruption, it may be helpful to have a whistleblowing policy that encourages workers to come forward voluntarily. It’s also important that the policy provides support and reassurance of protection, if workers report suspicion or evidence of failure to comply with the Act.
Bonuses and commissions
If bonuses or commissions make up a large part of an employee's income, or if targets are high and hard to achieve, there is more of a potential risk that employees ignore, or pay less attention to, bribery and corruption issues in order to reach those targets. You may want to review employee incentives if you are unsure if you are unintentionally incentivising workers to turn a blind eye where corruption or bribery is concerned.
Investigations relating to breaches of the Act
Whether there is a suspected or actual breach of the Act, it is critical that you fully investigate and document everything. Workers must be thoroughly questioned but also treated with respect in order that full cooperation is achieved. Any investigation must be fair, confidential and reassure workers that they will not suffer any adverse repercussions or detriment as a result of honestly assisting you with your investigations.
To ensure a consistent process, it is advisable to have a written policy stating:
- Who will carry out an investigation, as this will need to be someone independent with the training and skills to fully investigate?
- Whether workers should be suspended until an investigation is completed.
- How confidentiality will be maintained internally and externally while the investigation is ongoing.
- Whether you have an obligation to report the concerns raised to your external regulator or governing body.
Don’t be afraid to get an outside perspective on whether your current policies are sufficient to avoid liability under The Bribery Act – preventing the potential for claims being brought against you is certainly better than asking for forgiveness after the fact, so make sure you have expert advice to guide you. Our employment lawyers can assist with updating or drafting policies and procedures relevant to compliance with the Act to help you protect your business.
