April 21, 2016
Bribery charge costs employer £2.25m
It is critical that employers put anti-bribery procedures in place, according to a recent high profile conviction which sent shock waves through the business world.
A large UK organisation, Sweett Group Plc, became the first to be convicted and fined for breaching the Bribery Act 2010, leading to a fine and legal costs totalling £2,250,000.
The company was convicted of the corporate offence of failing to prevent bribery.
It was clear that bribes had taken place and Sweett Group could only avoid punishment if they could show that they had implemented ‘adequate procedures’ aimed at preventing the unlawful conduct.
Unfortunately, for Sweett Group, they were not able to demonstrate this, and the Judge hearing the case described it as a ‘system failure’.
It was unable to show that sufficient relevant and appropriate communications were made, that it had monitored what was happening or that it had ensured that the situation was acted upon.
- Section 7 of the Bribery Act, which Sweett Group breached, was introduced in 2011 It stipulates that an organisation is guilty if an ‘associated person’ bribes another person either with the intention of obtaining or retaining business, or in order to gain a business advantage.
- Since then, many organisations changed their internal policies of what constitutes bribery and how it must be avoided.
- Sweett Group conducted an internal investigation into activity in one of its subsidiary companies in the Middle East, after the media questioned the legitimacy of their contractual awards.
- After finding problems with two contracts, Sweett Group referred itself to the Serious Fraud Office (SFO).
- The SFO investigation concluded that corrupt payments had been made from the Sweett Group Middle East subsidiary in order to secure a consultancy services contract connected with the development of a hotel in Abu Dhabi.
What can employers learn?
The Bribery Act 2010 reaches far beyond corrupt activity in the UK.
If illegal activity takes place anywhere in the world, the regulatory powers of the SFO are enforceable for any organisation listed in the UK.
It also makes clear that not only do appropriate policies need to be put in place. Organisations need to be able to show that the policies and procedures are appropriate.
Organisations must take step to ensure they are followed and transactions are monitored effectively so potentially corrupt payments can be detected and prevented.
The SFO has demonstrated a clear willingness to pursue convictions where possible, and to highlight the global reach of its powers.
In order to insulate themselves from possible corporate convictions, organisations operating in the UK will need to ensure that their anti-bribery policies and working practices are robust, monitored, enforced and will stand up to scrutiny.