As summer begins, taking a client prospect to Wimbledon shouldn’t be a problem – but could you end up being done for another type of backhand?
Finally, after months of delay, the Guidance Notes to the Bribery Act 2010 have finally been unveiled. Were they worth the wait?
The cheers of acclaim for the Government’s efforts have been less than resounding. Some anti-corruption campaigning groups, such as Transparency International UK, are outraged at what they perceive to be a dilution of the principles of the Act. The Act itself will come into force on 1 July 2011, many months after it was first due to appear.
Bribery is defined as “giving someone a financial or other advantage to encourage that person to perform their functions or activities improperly or to reward that person for having already done so.” That is rather a wide definition and a lead to one criticism of the Act - its scope is imprecise. The answer is that you know bribery when you see it. Is that satisfactory?
For those of you who have not been anxiously following the progress of the Bribery Bill before it became an Act of Parliament, it is a piece of legislation that sought to ratify the existing law, which was in a mess. The Act covers the giving or taking of bribes and not offences like money laundering or insider dealing.
Employment lawyers are interested in the new law because, under section 7, a corporate offence of failing to prevent bribery was created. This means that if someone who is “associated” with your firm (eg works for you, or you engage or retain) bribes someone in the course of business, your firm might be prosecuted. However, if you can show your firm had “adequate procedures” in place to stop it happening, this will defend you.
Where does the Act apply? In this instance, the long arm of the law is very long:
“a commercial organisation can be liable for conduct amounting to a section 1 offence (bribing another person) or a section 6 offence (bribing a foreign official) on the part of a person who is neither a UK national or resident in the UK, nor a body incorporated or formed in the UK.” It doesn’t matter either if the offence of failing to prevent bribery was committed abroad. Wherever in the world offences are committed, the law applies to any firm set up, incorporated or working in the UK.
Many people were concerned that the Bribery Act would make an offence of business hospitality - that taking a business prospect to Twickenham would land you up in the dock, not a corporate box. The concern is understandable as penalties are fairly toothsome: the maximum sentence an individual can receive is 10 years. But the Guidance specifically makes clear this is not a risk, stating: “the Government does not intend for the Act to prohibit reasonable and proportionate hospitality and promotional or other similar business expenditure intended for these purposes.”
That’s ok then, although the Guidance recognises that hospitality could amount to a bribe, without setting out where the dividing line is. It will be a matter of fact and degree, although one theme that runs through the whole of the rather chunky Guidance Notes, on my reading, appears to be that “you will know bribery when you see it”, which is less than helpful. A day’s boozing and chomping of strawberries at Wimbledon may well be acceptable, but the party bag containing a Rolex watch for him or a diamond necklace for “the wife” probably isn’t.
So what are “adequate procedures”? The Guidance talks of the need to carry out an assessment of the risk your organisation faces of being bribed. That will depend on the type of business you are in, the size of the organisation and, crucially, the geography of where you do business. In other words, if you do business in a part of the world where bribery is commonplace you need to consider your position very carefully.
By way of assistance, the Guidance set out six principles to help. They are flexible and, in the jargon de nos jours “outcomes-focussed”, which means “the detail of how organisations might apply these principles, taken as a whole, will vary, but the outcome should always be robust and effective anti-bribery procedures.”
The six new anti-bribery principles are:
The Guidance finishes with case studies of each principle. In respect of hospitality, it is suggested that a company make clear to any people it entertains that the largesse provided isn’t given in return for an obligation to give business to them. Limits on amounts spent should be set and consideration given to the appropriateness (or otherwise) of the hospitality to be given.
In summary, the Guidance Notes are necessarily high-level, but provide some useful background to the type of steps that businesses should be taking to prevent bribery. For many businesses, undertaking commercial activity in countries where bribery is rife, I suspect they will not be greatly comforted, especially with regard to so-called “facilitation payments” to foreign officials.
Perhaps the 45 pages could have been shortened to this: keep your eyes and wits about you and you won’t go wrong.
Michael Scutt, Dale Langley & Co
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In the good old days men joined the French Foreign Legion “to forget”; perhaps a doomed love affair, an unhappy marriage, gambling debts or any manner of unpleasantness.
No longer is that possible with Facebook (and other social platforms) recording every man and woman’s indiscretion for posterity. In similar vein, Twitter is constantly criticised for being inane - who wants to know what you had for breakfast? Social media platforms expose every aspect of our lives for inspection, transmission, discussion and, sometimes, ridicule.
The sheer complication of privacy settings on Facebook, where openness rather than discretion is the default setting, mean that our private thoughts, comments and, alarmingly, photographs, all meant for a very select audience of “friends”, can be disseminated far and wide. Forwarded on in a fit of giggles, one lone Facebook indiscretion could mean that Andy Warhol’s prediction of “15 minutes of fame” could be coming to you, and soon. Unfortunately.
Your sudden fame will not just be limited to quarter of an hour: once out in the cloud, it will be preserved for posterity. That poses a further problem: where exactly is your data being processed? It may well be outside Europe, making it very difficult to object to photos etc being removed.
But not if the European Union has its way. The EU Commission has recently flexed its muscles and published proposals that would make Facebook “forget” all those shaming photographs of you lying in a gutter dressed as a nun after ten pints and a vindaloo.
As reported in The Guardian, EU Justice Minister Viviane Reding announced an intention to unveil a package of proposals shortly which will force social networking sites to have high levels of privacy as the default setting. And users will get the right to withdraw their consent to their information being processed. In other words, everyone living in the EU will be given the “right to be forgotten” online, and all their personal material removed. Failure by a social networking platform, even one based outside the EU, will lead to legal proceedings and sanctions being imposed by national privacy watchdogs.
It is also proposed that the companies will have to prove that they need to retain any information they stored, taking the burden off the individual to prove why it should not be processed.
It’s a very welcome initiative, although we will have to wait and see what the proposals look like when published. It must be right that people can demand social networking sites remove embarrassing information about them, especially when it can rear its head several years later and prejudice a job application.
What remains clear, however, is that law on privacy and social media is still very confused. How an individual’s right to privacy can be protected on a medium that is fundamentally dedicated to sharing and openness is probably the biggest issue facing legislators and lawyers over the next few years.
More fundamentally, these new proposals are an attempt by a supra-national organisation to take control over a phenomenon (how else can you describe Facebook et al?) that defies national boundaries in its scope and reach. I think the EU is to be applauded for pursuing this agenda (are you reading Nigel Farage?)
Now, there was something else I had to do but can’t quite recall what it was...
Michael Scutt, Dale Langley & Co