The UK’s new anti-corruption laws are welcome

The last UK government did not enjoy a good reputation for its anti-bribery efforts. A lack of prosecutions at the Serious Fraud Office (it did not bring a single bribery prosecution until 2008); three damning reports from the OECD; and the BAE Systems case, where the government was widely seen to have put commercial interests above those of its own prosecutors, all blotted its record.

Still, Labour’s legacy may be a far tougher anti-bribery regime. In the past two years of the party’s rule, it oversaw a shake-up at the SFO that has since resulted in a more aggressive anti-bribery enforcement culture. And, at the very end of the last parliament, it finally passed its bribery act – comprehensive legislation that is likely to make prosecutions easier, more numerous and altogether more serious.

The new act creates several bribery offences, including a new corporate offence whereby senior managers can be liable even if they had no direct knowledge of bribery having taken place. Under the law, the onus will be on companies to show that they had introduced “adequate procedures” to prevent bribery, or face the consequences. They could even be responsible for intermediaries and agents acting on their behalf.

The corporate offence replaces an old collection of laws under which prosecutors had to prove that a “guiding mind” had formed a “necessary intent to bribe”. Without a paper trail, this was a high bar. Executives would often say they were not aware that bribery was taking place, especially if the offence occurred at a distant subsidiary.

Chandu Krishnan, executive director of Transparency International UK, welcomes the law, saying it brings the UK into line with the OECD bribery convention. But he cautions that to be effective it needs to be properly enforced. He points out that the new government still needs to send out “guidance” about how companies should comply – due by July – which could have a big impact on how comprehensively companies adopt anti-bribery procedures.

Krishnan says he is not worried that, when in opposition, the Conservatives fought for a range of amendments that would have watered down the bill. “Yes, there were some disturbing amendments. But at the end of the day there was a consensus, which made it possible for the act to go through without anything weakening it in a fatal way,” he says.

UK business has raised concerns that the new law is too vague, and could ensnare companies even if they have made strenuous efforts to abide by the law – for example, over allowable levels of hospitality.

Good guidance

Gary Campkin, head of employment and human rights at the Confederation of British Industry, says the guidance needs to be “comprehensive and flexible” if UK businesses are to implement the law effectively. “We will hold the government to commitments for full and proper consultation with business, and for there to be sufficient time for business to implement the guidance once it has been agreed,” he says.

Campaigners have argued that the law should be “aspirational”, encouraging companies to “live the legislation” rather than simply comply in a box-ticking exercise. In theory, they say, this would improve standards over time.

There remains a tension, however, between companies that want clarity and certainty, and prosecutors, who will want the greatest discretion possible. Finding the right balance will be a key issue in the years ahead.