Lead Forensics
Prettys Solicitors Ipswich



Corruption in construction...

December 2016 - Issue 88

The far-reaching effect of the Bribery Act

When The Bribery Act came into force into 2010, it created a corporate offence whereby a commercial organisation would be criminally liable if a person ‘associated’ with it (a person who performs services for or on behalf of the company e.g. an employee or subsidiary company), bribes another person in order to obtain or retain business for the organisation. Under the act, a defence is provided if the organisation can show that it had in place adequate procedures designed to prevent the above offence.

Sweett Group plc is the first company that has been convicted of this corporate offence. Pleading guilty to not having adequate procedures in place they were ordered to pay a total of £2.25 million; a £1.4 million fine, £851,152 in profit confiscation and £95,000 in prosecution costs. The conviction arose following an investigation into Sweett’s subsidiary company, Cyril Sweett International Limited, paying bribes to Khaled Al Badie, who was the Vice Chair of the Board and Chairman of the Real Estate and Investment Committee of AAAI, to secure the contract for the building of the Rotana Hotel in Abu Dhabi.

It was irrelevant that Sweett were unaware of the bribes; the lack of adequate procedures was enough for them to be convicted. Activities of a foreign subsidiary, anywhere in the world, are subject to the Bribery Act, so it is vital that organisations in the construction sector ensure they have adequate procedures to prevent bribery.

The Ministry of Justice has issued a number of guidance points for organisations to consider, in brief these are:

1 - Proportionate procedures:

the procedures in place need to be proportionate to the risk that the organisation faces. This will often be linked to the size, nature and complexity of the organisation. Therefore, a risk assessment of the organisation should be the first step.

2 - Top-level commitment:

by ensuring those at the top of the organisation are engaged in the prevention of bribery it will create a culture where bribery is unacceptable. Effective top-level involvement can include circulating statements reminding employees of the zero tolerance approach to bribery together with training of senior managers to lead anti-bribery work.

3 - Risk assessment:

ensure the procedures in place are identifying and prioritising the risks that the organisation faces.

4 - Due diligence:

organisations should ensure that there are adequate due diligence procedures in place, as these will act as both a form of bribery risk assessment as well as mitigating risk. Organisations can consider incorporating in its recruitment and HR procedures due diligence to mitigate the risks of bribery being undertaken by employees.

5 - Communication and training:

this will enhance awareness and understanding of the organisations procedures and will demonstrate the commitment to preventing bribery. An organisation can consider mandatory training for new employees or agents but should ensure it is tailored to specific risks related to that position. 

6 - Monitoring and review:

the risks that organisations face will change over time as will the nature and scale of the activities conducted. Therefore, it is important to consider how to monitor and evaluate effectiveness of the procedures in place.



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