Bribery is no victimless crime: it can lead to poverty and human suffering. But the government's guidance is undermining new legislation.
By Robert Barrington and Melissa Lawson
Bribery, particularly the bribery of foreign public officials by multinational companies, is prevalent in many developing countries, including countries rich in natural resources where many BOND anti-corruption group members work.
Bribery undermines the rule of law and the principle of fair competition and entrenches bad governance in such countries, hindering their efforts to alleviate poverty and often contributing to instability and human rights abuses. In addition, the reinforcement of poor governance in aid-recipient countries undermines the impact of UK aid and taxpayers' value for money.
Bribery can lead directly to human suffering and death, for example where it results in government contracts being awarded to companies that perform substandard construction work or provide substandard goods and services in the health sector. Bribery of foreign officials can help to entrench corrupt elites by providing the incentive and the means to maintain a tight grip on power, particularly in natural resource rich states where the stakes and potential rewards are higher.
Thus, bribery is not a victimless crime or a regrettable but unavoidable cost of business for companies overseas. It is an economically destructive phenomenon which contributes, directly and indirectly, to poverty and human suffering.
Bribery is also bad for business as it distorts investment climates, undermining the Department for International Development growth agenda. It raises the costs for UK businesses that operate overseas and discourages UK companies from entering new markets. When the problem is tackled effectively it benefits business by creating a level playing field, in which sales and contracts are won through an open market. This creates greater contract security and reduces the cost of doing business through eliminating the 'bribery tax' in contractual agreements.
We strongly believe that the UK has an obligation to ensure that companies based here do not contribute to corruption in foreign countries through bribery, or other means, and we welcome the commitment on the part of this government to tackling this issue.
While many British firms are not involved in corrupt practices, we know that some UK companies have used bribery to win business overseas. As such, we welcome the UK Bribery Act, which overhauls antiquated UK anti-bribery laws dating back to 1889, as a crucial step in ensuring that the UK does not exacerbate corruption. The Act, which enjoyed strong cross-party support in parliament, is sound legislation which went through extensive consultation with relevant stakeholders. There were, in fact, four formal periods of consultation to each of which companies and industry bodies made submissions.
The Act creates four new offences of bribery. Paying a bribe, receiving a bribe and bribing a foreign public official are the 'principal' offences. The fourth offence is of failure by a commercial organisation to prevent bribery. However, the company will not be liable if it can be proved that 'adequate procedures' to prevent the offence were put in place.
The concerns levelled against the Act are unfounded – particularly the accusation that all forms of hospitality will come under fire. We recognise that much corporate hospitality is legitimate and not intended to bribe, and so the Act should obviously only prevent hospitality that is covert bribe-paying. This is adequately covered in the government guidance to Section 7 of the Act.
However, we have significant concerns regarding the Ministry of Justice's interpretation of certain sections of the Act, and the current political will to resource its effective enforcement. The government guidance undermines key features of the legislation. For instance, foreign companies could be listed on the London stock exchange, pay bribes and get away with it. This will disadvantage all honest companies and, perversely, turn on its head the government’s stated aim of creating a level playing field through the Act’s extra-territorial reach.
We are calling on the government to ensure that enforcement of the Act leads to prosecution of serious and complex cases of bribery while levelling the playing field for responsible UK businesses. Bribery is not a crime without victims, and it is our hope that the UK government will implement robust enforcement of the Act to protect those who need it most.
Robert Barrington is director of external affairs for Transparency International UK and Melissa Lawson is public policy officer for Tearfund. Both write on behalf of the BOND anti-corruption group, a group of leading British NGOs fighting corruption in the UK and overseas.
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