Bribery and corruption can create serious legal, financial and reputational risks for businesses. Employers need to understand not only what conduct may amount to bribery, but also what practical steps they should take to prevent it within their organisation.
Having clear policies, appropriate training and effective reporting procedures can help businesses reduce risk and demonstrate that anti-bribery compliance is taken seriously.
What does the Bribery Act 2010 cover?
The Bribery Act creates four key offences:
- Offering, promising or giving a bribe
- Requesting, agreeing to receive or accepting a bribe
- Bribing a foreign public official
- A commercial organisation failing to prevent bribery by an associated person.
An associated person can include someone who performs services for or on behalf of the organisation, meaning the risks may extend beyond employees to certain agents, intermediaries or other third parties.
What is the offence of failing to prevent bribery?
Section 7 of the Bribery Act creates a specific offence where a relevant commercial organisation fails to prevent an associated person from bribing someone with the intention of obtaining or retaining business or a business advantage for the organisation.
However, the organisation has a defence if it can show that it had adequate procedures in place designed to prevent bribery.
This makes preventative policies and procedures particularly important for employers.
What are adequate procedures?
Government guidance identifies six principles that businesses should consider when designing anti-bribery procedures:
- Proportionate procedures
- Top-level commitment
- Risk assessment
- Due diligence
- Communication and training
- Monitoring and review.
There is no single anti-bribery programme that will be appropriate for every organisation.
A small UK business operating in a relatively low-risk sector may need different procedures from an international organisation working through agents in higher-risk markets.
The important point is that the procedures should reflect the actual risks faced by the business.
What should an anti-bribery policy cover?
Where bribery risk exists, employers should have a clear anti-bribery and corruption policy.
Depending on the business, this might cover:
- Gifts and hospitality
- Facilitation payments
- Charitable and political donations
- Conflicts of interest
- Working with agents and intermediaries
- Procurement and tendering
- Reporting concerns
- Investigation procedures
- Disciplinary consequences.
Government guidance recommends that businesses communicate their anti-bribery policies to staff and review them regularly.
Employees should understand not only what the policy says, but what they are expected to do if they encounter a potential bribery risk.
Are gifts and hospitality prohibited?
Not necessarily.
Reasonable and proportionate corporate hospitality, promotional expenditure and business gifts are not automatically prohibited by the Bribery Act.
The risk arises where something of value is offered or accepted with the intention of improperly influencing a business decision or rewarding improper conduct.
Employers should therefore have clear rules covering gifts and hospitality. These may include approval thresholds, requirements to record gifts and guidance on circumstances where an offer should be declined.
Particular caution may be needed where valuable hospitality is offered during a tender process or to someone with significant influence over a commercial decision.
What about facilitation payments?
Facilitation payments are typically small payments made to encourage an official to carry out a routine function they are already required to perform.
There is no general exemption for facilitation payments under the Bribery Act. Government guidance states that they can amount to bribes.
Businesses operating internationally should make sure employees understand the distinction between an unlawful facilitation payment and a legitimate official fee for an authorised service.
Why is third-party due diligence important?
Businesses can face risk through people or organisations acting on their behalf.
Agents, consultants, intermediaries and overseas partners may therefore require appropriate due diligence before they are appointed.
Depending on the level of risk, this might involve checking:
- Ownership and management
- Business reputation
- Experience and credentials
- Proposed fees or commission arrangements
- Connections with public officials
- How payments will be made.
Unusual payment requests, excessive commissions or unexplained intermediaries can all justify further investigation.
How should employers train staff?
Training should be proportionate to the risk employees face.
Staff working in sales, procurement, international business, contract negotiations or third-party management may require more detailed training than employees in lower-risk roles.
Managers should also know how to respond if an employee raises a concern.
Regular training can help ensure that anti-bribery policies are understood and embedded into everyday decision-making rather than simply existing as a written document.
What should an employer do if bribery is suspected?
Allegations of bribery or corruption should be taken seriously and investigated appropriately.
Employers should consider:
- Preserving relevant documents and communications
- Identifying who needs to be involved in the investigation
- Maintaining appropriate confidentiality
- Following internal disciplinary procedures
- Considering whether external legal or regulatory advice is required.
Care should also be taken to protect employees who raise legitimate concerns through whistleblowing procedures.
Keeping anti-bribery procedures under review
Anti-bribery compliance is not a one-off exercise.
Businesses should review their risks and procedures periodically, particularly when entering new markets, appointing agents, changing business models or expanding internationally.
DTM Legal’s Employment & HR team advises employers on anti-bribery and corruption policies, employee training, internal investigations and disciplinary issues arising from suspected misconduct.
If your business needs to prepare or review its anti-bribery procedures, or requires advice following an allegation of bribery or corruption, contact DTM Legal’s Employment & HR team to discuss how we can help.