Speech to the World Bribery and Corruption Compliance Forum
Speech by the Attorney General, Dominic Grieve QC MP
Introduction
“It is a great pleasure to have the opportunity of addressing you this morning. Tackling bribery requires first of all an effective law of bribery and I firmly believe the Bribery Act 2010 now achieves that for the United Kingdom. The Bribery Bill enjoyed broad cross-party support during its passage through Parliament, and its enactment shows the UK continues to take combating bribery very seriously indeed.
“Although it is important that the Act should come into force as soon as practicable, it is also extremely important for all concerned to be as well prepared as possible for when that happens - that is why the Lord Chancellor and Secretary of State for Justice has today made a statement launching a public consultation on guidance, about which I will say more later, ahead of the Act coming into force in spring 2011.
“I am sure that this conference will also help prepare for the effective implementation of the Act. As Attorney General I am very pleased to be able to support the rule of law in this important area.
“The Justice Secretary, Ken Clarke, on his appointment as the UK’s new International Anti-Corruption Champion on 15th June 2010 - succeeding former incumbent Jack Straw - emphasised that the government will not tolerate bribery. I echo those sentiments and I should like to just briefly look at why it is so important to tackle bribery. Clearly this needs to be viewed in the international context, and particularly so since I am today speaking at a ‘world bribery and corruption forum’ with delegates from a number of different countries. It is important that bribery is tackled for a variety of very good reasons.”
Why bribery needs to be tackled
“The starting point is that bribery is quite simply wrong: it is morally repugnant. International corruption, and national corruption, is a matter of serious concern to us all. We know the World Bank estimates that the sums involved run at $1 trillion annually and we should all be troubled by that. As a general statement, I cannot really put it better than Kofi Annan, the (then) Secretary General to the United Nations, as he observed in his foreword to the 2004 UN Convention Against Corruption. He said:
Corruption is an insidious plague that has a wide range of corrosive effects on society. It undermines democracy and the rule of law, leads to violations of human rights, distorts markets, erodes the quality of life and allows organised crime, terrorism and other threats to human security to flourish. This evil phenomenon is found in all countries - big and small, rich and poor… corruption hurts the poor disproportionately by diverting funds intended for development, undermining a government’s ability to provide basic services, feeding inequality and injustice and discouraging foreign aid and investment. Corruption is a key element in economic under-performance and a major obstacle to poverty alleviation and development.
“Bribery is therefore not a victimless crime and we must all do what we can to fight corruption, both nationally and internationally, since the issue of tackling bribery is undoubtedly global. The OECD and a number of respected NGOs, among others, have all been instrumental in securing an international consensus on the need to address bribery which can be harmful in so many ways. In the UK, the Bribery Act 2010 signals our continued commitment to fight bribery. The somewhat antiquated law, based on the common law and Prevention of Corruption Acts 1889-1916, has now been rationalised and extended in a modern statute.”
The need for law reform in the UK
“While it has been plain for some time that the criminal law on bribery needed reform in the UK, that should not be understood as meaning the UK was not compliant with its international obligations. Nonetheless, it has been accepted for some time that there is scope for rationalising the existing law and creating a new legal landscape. Indeed, the existing law has not prevented some strong enforcement action being taken in the UK. It is pleasing that the improving UK enforcement position is recognised in the 2010 Transparency International Report.
“I recall welcoming the Bribery Bill in the House of Commons last year, but it is fair to say that I indicated it had taken too long in coming. To look at some of the history, in 1998 the Law Commission published a report and draft Bill on Corruption. That resulted in a draft Corruption Bill being considered by a Joint Committee in 2003, which heavily criticised the Bill and recommended that the scheme of offences be restructured. The government then undertook a consultation exercise in 2005, which revealed that there was broad support for reform of the existing law but no consensus as to how that could be achieved.
“As a result, in March 2007 the government asked the Law Commission to consider the options for reform further and the Law Commission issued a consultation paper on 29 November 2007 inviting comments on its proposals to make the law of bribery simpler and more appropriate to modern times. That resulted in the 2008 Law Commission Report (Reforming Bribery, Law Comm No 313) which provided the foundation upon which the Bribery Bill was based.
“The Bill was then carefully analysed by the Joint Committee on the draft Bribery Bill, debated in Parliament and received Royal Assent on 8 April 2010. So, as I mentioned in the House of Commons, it has been a long process, but I am delighted the opportunity was seized in the end.”
The Bribery Act 2010
“The drafting of the Bribery Act 2010 can appear daunting at first sight, because it is very different to the existing law. Indeed, I have some sympathy with the comment of Lord Mayhew (a distinguished former Attorney General) in the House of Lord’s debate on the Bill when he described it as ‘a real candidate for a cold towel around the head.’ But the legislation has to be comprehensive as bribery can take many different forms. I am confident that once prosecutors and the courts get used to the new legislation they will find it effective.
“The Act provides a modern and comprehensive scheme of bribery offences, in order to allow investigators, prosecutors and the courts to tackle bribery effectively whether committed at home or overseas. The Act will help to enhance our country’s international reputation for the highest ethical standards.
“In summary, the Act creates four offences:
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two general offences of bribery covering the offering, promising or giving of a financial or other advantage (section 1), and the requesting, agreeing to receive or accepting of a financial or other advantage (section 2);
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a third specific offence of bribing a foreign public official (section 6);
and fourthly a new offence of failure by a commercial organisation to prevent bribery (section 7), although it is a defence, under section 7(2), if a commercial organisation can prove - on the balance of probabilities - that it had ‘adequate procedures’ in place to prevent persons associated with it from bribing.
“The general offences focus on either the conduct of the person bribing another, or the person being bribed and identify 6 cases, each involving the improper performance of a function, where one or the other of these general offences would be committed. These general offences apply to functions of a public nature as well as in a business or employment context.
“The offences of bribery of a foreign public official (section 6) and failure to prevent bribery (section 7) are specifically aimed at the use of bribery in commercial transactions and should help create a level playing field for business. The bribery of a foreign public official offence focuses on the use of bribery to influence the recipient in his or her official capacity and is closely modelled on the OECD convention against foreign bribery.
“Other key provisions of the Act include:
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an increase in the maximum penalty for bribery from 7 to 10 years imprisonment, with an unlimited fine (section 11)
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prosecutions for any of the new offences in England and Wales and Northern Ireland will be subject to the personal consent of the Director of the relevant prosecution authority (section 10)
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extra-territorial jurisdiction (section 12) will enable the prosecution in the UK of bribery committed abroad by persons ordinarily resident in the UK as well as British nationals, and UK corporate bodies
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the Secretary of State (ie Lord Chancellor and Secretary of State for Justice) is required under section 9 of the Act to publish guidance about procedures commercial organisations can put in place to prevent bribery
The consultation announced today by the Lord Chancellor and Secretary of State for Justice relates to this guidance.
“I do not intend to go into the detail of these offences, which I am sure will be covered by others today and elsewhere, but any perusal of the Act will reveal that the offences are widely drawn. That should not be regarded as a bad thing. Bribery can take many different forms and the legislation needs to take account of that. I am aware there has been some concern expressed about hospitality or promotional expenditure of commercial organisations. The starting point is that these activities are not illegal per se and the Act is not intended to clamp down on legitimate expenditure of this type.
“It is clear, however, that lavish hospitality and similar expenditure can be used as a bribe intended to induce a public official to award business. The Act must be capable of penalising such conduct. It will all depend on the particular circumstances. In practice, I do not believe it will be too difficult to distinguish what is bribery and what is not, but ultimately of course it will be a matter for the jury to decide. It should also be noted that the Bribery Act 2010 does not provide any exemption for so called ‘facilitation payments’ (unlike US foreign bribery law) so if small bribes are paid to facilitate certain business transactions there is clearly a risk of prosecution. But it is important to note this is not a change. The law has never exempted such payments.
“Establishing the right culture within commercial organisations is clearly of paramount importance in order to prevent bribery occurring in the first place. That is part of the operational good practice of businesses in any event, although the way in which that is disseminated will clearly depend upon the size and nature of the particular business. For any commercial organisation that needs a bit of encouragement, however, there is now the failure to prevent bribery offence in section 7, which is subject to a penalty of an unlimited fine. As I mentioned earlier though, it is a defence if the company can prove that it had “adequate procedures” in place. It may simply be a ‘rogue employee’ that is committing bribery.”
The consultation paper
“The government has previously announced - in a Written Ministerial Statement from the Lord Chancellor and Secretary of State for Justice, Ken Clarke, on 20 July 2010 - that it would be conducting a public consultation exercise on the form and content of the guidance to be issued under section 9 of the Act, about procedures which commercial organisations can put in place to prevent bribery.
“In a superb piece of timing for today’s conference organisers, that consultation paper has been published today (14th September 2010) and is available on the Ministry of Justice website. The announcement about the commencement of the consultation was made this morning, by the Lord Chancellor and Secretary of State for Justice, by means of a Written Ministerial Statement. The consultation will run for 8 weeks until 8 November. I encourage you to respond to the questions posed in that paper. It is anticipated that final guidance will be published early in the New Year, to allow an adequate period for familiarisation before the Act is commenced in the spring of 2011.
“The consultation paper seeks to ensure that the section 9 guidance finally published takes account of the views and considerable expertise in the business community and non-governmental organisations. Our objective is to ensure that the guidance supports businesses in determining the sorts of bribery prevention measures they can put in place, if they choose to do so.
“The guidance is formulated around 6 general principles designed to be of general applicability across all sectors and sizes of business. It is not intended to be prescriptive or standard setting. Instead the principles are outcome focused and flexible. It is for each commercial organisation to determine its policies and procedures so that they are proportionate to the nature, scale and complexity of its activities. Small- and medium-sized organisations will face very different challenges compared to a multinational company, but the principles will assist commercial organisations to apply robust and effective measures, should they decide that is necessary, to prevent bribery whatever their circumstances.
“A series of illustrative case scenarios have been provided in addition to the guidance. These scenarios focus on the relationship between the 6 anti-bribery principles set out in the guidance and a number of areas which can present real risks of bribery for many commercial organisations in foreign markets; namely the use of intermediaries and agents, corporate hospitality and promotional expenditure, charitable donations, facilitation payments and dealing with business partners.
“Through a series of questions that are indicative of questions that organisations may wish to ask themselves when applying the guiding principles to their individual circumstances, we are confident that the scenarios will help demonstrate how to match a risk based assessment of bribery prevention needs with various options for preventative measures.”
Prosecution guidance
“Prosecutors and the police are currently gearing up, ready to enforce the Bribery Act 2010 as soon as it commences next year. In England and Wales, the Director of Public Prosecutions and the Director of the Serious Fraud Office are already drawing up joint legal guidance for prosecutors. This will foster a consistency of approach among the police, CPS and SFO. Scotland and Northern Ireland will also be taking similar steps. Prosecutors are already engaging with each other to discuss matters of mutual interest.
“I hope that the joint legal guidance will be published early in 2011. The purpose of this guidance will be to ensure that prosecutors have a clear, comprehensive and consistent guide to the law and relevant public interest considerations. The guidance for prosecutors will be publicly available - published on the CPS and SFO websites as usual - and may therefore also help others understand how prosecutors will approach the new offences in the Act.
“The Serious Fraud Office has built up considerable expertise in dealing with overseas corruption and is working closely with its international partners in combating it. You will be hearing from Robert Amaee, Head of the Anti-Corruption Domain at the SFO, later today. The Crown Prosecution Service has also developed expertise in prosecuting cases of both overseas corruption (in cases that do not fall within the remit of the SFO) and domestic corruption.
“I have told you that the joint legal guidance for prosecutors is being developed. Let me make some general comments - as the Minister responsible for superintending those prosecutors - about what the legal guidance can and cannot do.
“First of all, the guidance cannot as a matter of law - and therefore will not - provide any kind of immunity from prosecution, by stating in advance what activities would or would not be prosecuted under the Bribery Act. As with other criminal offences, prosecutors will make their decisions in accordance with the Code for Crown Prosecutors (“the Code”), which will continue to apply in full in all cases. Other guidance may be taken account of as well, such as the corporate prosecutions guidance, but nothing comes above or before what is set out in the Code.
“Each case will inevitably have to be rigorously considered on its own facts and merits. You will therefore appreciate that there can be no guarantee to anyone in advance about how a particular case will be viewed. Prosecutors - as they are required to do by the Code - will apply a 2-stage test when deciding whether to proceed: firstly, whether there is sufficient evidence to provide a realistic prospect of conviction; and secondly, if there is sufficient evidence, whether a prosecution is in the public interest. It is only if the evidential test has been met that prosecutors will then go on to consider the general public interest. Clearly the more serious the offence, the more likely it is that a prosecution will be required in the public interest.
“It is important to emphasise that before the prosecutor even comes to consider the public interest, there is an evidential decision to be made as to whether there is a realistic prospect of conviction of any bribery offence having been committed in the first place. That will require a careful consideration of the elements of any particular bribery offence alleged and an application of the law to the particular facts. Where the evidence does provide a realistic prospect of conviction, however, the prosecutor will then go on to consider whether the prosecution is in the public interest in accordance with the Code.
“In terms of the public interest, again each case will inevitably have to be determined on its own merits. Matters that weigh in favour of prosecution will be considered as well as any factors against. However, as a general starting point, the public interest in bringing a prosecution for bribery is clearly considerable. As I indicated at the outset of my speech - when I spoke about why bribery needs to be tackled - prosecutors will be acutely aware of the harm bribery can cause.”
Conclusion
“The Bribery Act 2010 provides prosecutors with the tools needed to prosecute bribery effectively. Be assured, prosecutors will use those tools - but only where the evidence permits and the public interest requires. The Act will help the UK to be at the forefront of the international fight against corruption.
“Those commercial organisations who already have adequate procedures in place to prevent bribery occurring have nothing to fear. It is only those who do not heed the warnings, and do not take the necessary steps, that need to fear the extended reach of the Bribery Act 2010.
“I trust that you will have an interesting and productive conference and help ensure by your work here that the benefits of the Act are more widely understood.”