On Wednesday the Government released guidance notes for the Bribery Act. This is terrific news.
We now have a Bribery Act and it will be coming into force on July 1. It is the first update to the UK’s anti-bribery legislation for over 100 years. We at the Global Poverty Project welcome the government’s announcement and we thank you for campaigning with us to have the guidance notes released.
In our campaign to have the guidance notes published over 300 of you sent emails to the Justice Secretary and No 10. They have listened.
Despite this positive outcome we nevertheless hold grave misgivings regarding the guidance notes.
According to the Justice Secretary the reason for the delay was due to the Evening Standard stirring him into action. As a result of this last minute lobbying from business groups, the guidance notes go far beyond a simple watering down of the Act. In fact the guidelines undermine both the spirit and intent of the Act which, after all, was originally passed under an all party consensus in November last year.
So here’s the result.
Originally the Act introduced two new offences. First, it became illegal to bribe a foreign public official. Second, a company would be guilty of bribery where it failed to prevent bribery occurring on its behalf.
Both of these crimes have now been completely undermined by the guidance notes. They open a huge loophole that allows companies to use subsidiaries to pay bribes to foreign public officials.
In addition, the guidance also exempts foreign companies listed on the London Stock Exchange from the remit of the Act. As long as they ‘carry on their business’ elsewhere, they won’t be covered by the Bribery Act. This is in direct contradiction to the Act.
According to Ken Clarke, ‘without changing the substance of the act’ the new guidelines represent a common-sense approach to tackling bribery. That’s the copout. He hasn’t had to change the substance to undermine and change the intended meaning of the Act.
Indeed, we now have a situation where the government’s guidance notes – their view of what the Act means in practice – contravenes a plain reading of the Act. It’s a capitulation to business interests and their intense lobbying campaign. It’s no surprise then to see the Confederation of Business Industry, the self-declared ‘voice of business’, welcome this ‘much-improved’ guidance.
Lobbying from vested interests and business groups has now undermined an Act that would have placed the UK as a leader in the global fight against corruption.
Lobbying from vested interests and business groups has undermined the democratic process. Just last year the Act was passed with a cross-party consensus. And more than that, the Act was passed just before the election in April. That’s right – moments before the parties were about to begin competing they came together recognising the need for a strong, broadly focused Act to fight corruption and defend British businesses that want to operate to a fair, ethical standard.
And it was passed following an extensive consultation with the business sector to begin with.
It’s no surprise to see the response from our friends at Transparency International and Global Witness. They both consider the Government’s guidance to be a white flag to last-minute lobbying - the result of which has opened up numerous loopholes in the Act.
Neither of them mince their words.
According to the Executive Director of Transparency International Chandrashekhar Krishnan the guidance notes are deplorable reading more ‘like a guide on how to evade the act’.
Global Witness is equally enraged considering the guidance notes to be a reprehensible cave in by the Government.
But it’s not all over yet.
Fortunately, Ken Clarke isn’t responsible for enforcing the Act.
In fact that role falls to the Serious Fraud Office (SFO). The SFO is an independent government department responsible for fighting major fraud and corruption in the financial system. In other words, they’re responsible for enforcing the Act against the companies that have been courting Ken Clarke.
Led by their Director Richard Alderman, they take a different view to the Ministry of Justice on the Bribery Act. They see it the way it should be seen.
According to Richard Alderman the SFO isn’t concerned with an ‘over-technical’ interpretation of the new law. Rather, the SFO views itself as having a wide jurisdiction to enforce the Act and ensure that ethical UK businesses are not disadvantaged by unscrupulous competitors.
And that’s what this is about.
Ultimately, we at the Global Poverty Project want to see UK businesses succeed on the basis of their high ethical standards. We recognise that business has a crucial role to play in the fight against corruption and we want our businesses to be world leaders in this. Corruption perpetuates and exacerbates poverty. It is a cancer and it requires all of us – individuals, governments and businesses – working together to combat it and end extreme poverty.