Bribery Act 2010: checklist
Sarah-Marie Williams of Clyde & Co LLP concludes a series of articles on the Bribery Act 2010 with a checklist to help employers to avoid liability for bribery under the Act. Employers should put in place procedures to help ensure that employees and "associated persons" who provide them with services comply with the Bribery Act 2010.
1. Be aware of the provisions in the Bribery Act 2010.
The Bribery Act 2010 is due to come into force on 1 July 2011.
Employers should ensure that they are familiar with, and take action to meet,
their obligations under the Bribery Act as the penalties for breaching the Act
are severe. Individuals who are successfully prosecuted under the Act can face
up to 10 years' imprisonment and an unlimited fine. Commercial employers can
face unlimited fines. The jurisdiction of the Act is far reaching, as it covers
acts of bribery in the
Under the Act, it is a criminal offence for an individual or a commercial organisation to offer or receive a bribe to bring about or reward the improper performance of a function or activity. Employers may be liable if they fail to prevent acts of bribery carried out by their employees and "associated persons". An "associated person" is defined in the Act as one who provides services to the organisation. This can be an individual or a body and will include employees, intermediaries, agents, joint ventures and other forms of business vehicle, as well as suppliers of services and contractors.
An employer will have a defence if it can show that it has adequate procedures in place to prevent bribery. The Government has published guidance (Bribery Act 2010: Guidance about commercial employers preventing bribery (PDF format, 390K) (on the Ministry of Justice website)) about procedures that employers can put in place to prevent bribery. The guidance sets out six key principles to guide and inform employers when they set out their anti-bribery procedures (see Bribery Act 2010: guidance principles and practical implications for more details).
2. Undertake a risk assessment for the business.
The government guidance includes carrying out bribery-related risk assessments as one of its six principles. A risk assessment should consider the nature and extent of the risks to which an employer is exposed, including an assessment of the sector and territories in which the employer operates and the types of transactions that it conducts. As part of the assessment, the employer should also review how it entertains clients.
3. Demonstrate top-level commitment towards compliance with the Bribery Act.
Top-level commitment is another of the principles of the government guidance. Depending on the size of the organisation, the board of directors and/or senior management should take the lead in relation to compliance with the Bribery Act, to help to establish a culture within the organisation that bribery is not acceptable. Employers may wish to form a committee or working group to oversee compliance with the new law and appoint a compliance officer (who should be suitably senior) with overall responsibility for overseeing the employer's compliance with the Act.
4. Conduct due diligence in respect of all business relationships.
Employers should put in place, and carry out, rigorous due diligence processes in respect of associated persons before they enter into arrangements with those parties. Due diligence is a further principle in the government guidance. Employers should put processes in place to identify the risk of corruption, and the level of seniority of decision-makers should be appropriate for the value of transactions and perceived risk. The country in which business is to be undertaken should also be considered together with the law of that country. Employers should make new business partners aware of their anti-corruption and anti-bribery policies before any dealings take place and commercial contracts should include express contractual obligations in relation to corruption and bribery.
5. Draw up an anti-bribery policy and bribery prevention procedures and review existing related policies and procedures to ensure that they are consistent with them.
Employers should draw up an anti-bribery policy to set out their commitment to compliance with the Bribery Act 2010 (see the Anti-bribery policy in the XpertHR policies and documents section for a model policy). The policy can form the basis of procedures to prevent bribery, which should be proportionate to the risks that the employer faces.
Employers should also review related policies and procedures to ensure that they: are consistent with the anti-bribery policy and procedures; make clear that all forms of corruption are prohibited; set standards of behaviour that the employer expects; and, where necessary, give guidance to employees and other affected parties on action that they should take if they are exposed to bribery and corruption.
Policies and procedures should also be carefully monitored and reviewed periodically, as the bribery risks that an employer faces may change over time.
6. Review existing disciplinary procedures.
In particular, employers should review and update existing disciplinary procedures to reflect the provisions in the Bribery Act 2010. Disciplinary policies and procedures should make clear that a breach of the employer's anti-corruption and bribery policy may amount to gross misconduct, which could result in dismissal. Communication of the revised procedure is important and should be dealt with as part of overall training (see below) about bribery and corruption.
7. Ensure that the whistleblowing procedure is reviewed and updated if necessary.
An employer's whistleblowing procedure should reflect the Bribery Act and should seek to encourage employees to come forward on a voluntary basis if they suspect that bribery is taking place. The procedure should also provide support and advice, together with a reassurance to staff of protection if they make a disclosure. Staff should be made aware of the policy and how it applies in relation to the Bribery Act.
8. Set up a training programme.
Training forms part of the guidance principle of communication. Employers should set up a training programme that covers employees' obligations under the Bribery Act, the employer's approach to bribery and corruption, and how its anti-bribery policies and procedures apply in practice. It is important that staff, and, where appropriate, business partners, are also made aware of the potential penalties for employers and individuals if they breach the Act. Training can be delivered in any suitable format, for example via seminars or online.
9. Keep records of participation in training.
It is advisable for employers to require employees to acknowledge that they have received training and to record their participation in it. In the event that an employer is charged with failing to prevent bribery by an employee, a record that he or she undertook training may form part of the employer's defence of having adequate procedures in place to prevent bribery.
10. Review the recruitment process and the checks carried out during recruitment.
Employers should consider carrying out additional background checks and vetting during the recruitment process, in relation to posts that could be vulnerable to bribery risks. This could include, for example, carrying out criminal record, bankruptcy and credit reference checks and also pursuing additional references. Employers should also carefully document the reasons for recruitment decisions, particularly where a decision is made to appoint an individual who has some form of relationship with a client or business contact.
11. Review existing expenses policies and procedures.
Employers should carry out audits of their expenses procedure, and repeat this periodically. It is important that they have adequate checks in place in respect of the level of expenditure and ensure that evidence is required in respect of how money is spent and why it has been spent for each expense. Some employers may wish to have a system in which money is not given in advance of the expense being incurred. Any guidelines in terms of expenses should be clearly communicated to staff.
12. Review existing procedures in respect of gifts and hospitality.
According to the government guidance, hospitality and promotional expenditure that is reasonable and proportionate is not prohibited by the Bribery Act 2010. It must also be given with a view to fostering good relations and not to induce improper performance of a function. Employers should review, and if necessary amend, existing gift and hospitality policies to try to ensure that they comply with these requirements.
In its policy, an employer should set out its approach to hospitality, what it deems reasonable and the appropriate circumstances in which employees can offer and accept hospitality. The policy should also give clear guidance on both the giving and receiving of gifts. Employers should consider requiring employees to obtain prior written approval of all gifts or entertainment provided to, and by, others and require employees to document the reason for gifts.
The next topic of the week article will be the first in a new series on employers' obligations in relation to employees who will be volunteering to help at the 2012 Olympics, and will be published on 6 June.
Sarah-Marie Williams (Sarah-Marie.Williams@clydeco.com) is a legal director at Clyde & Co LLP.
Further information on Clyde & Co LLP can be accessed at www.clydeco.com.
