Firm is put on ethics watchSeptember 2009
British bridge-building company Mabey & Johnson is to be monitored by an independent auditor approved by the UK’s Serious Fraud Office (SFO) after admitting to paying bribes to win contracts in Ghana, Iraq and Jamaica.
The 35-year-old family-owned multinational, which operates in 115 countries – often on military contracts – will be monitored to check whether its recent introduction of new policies and training on anti-corruption are likely to be robust and effective.
The move is part of a plea-bargain agreed with the SFO in which Mabey & Johnson has agreed not to fight ten charges of corruption. At a hearing expected later this year, the company is expected to be ordered to pay a financial penalty, as well as the costs of the independent monitor and other legal expenses. It has already agreed to pay compensation to the governments of Jamaica and Ghana ‘as a further expression of our regret’.
Mabey & Johnson is the first major British company to be prosecuted for paying bribes abroad. Perceived inaction by UK authorities on corporate bribery and corruption has led to criticism from other nations, notably those in the OECD. However, the SFO believes the plea-bargain agreement could become a template for future prosecutions, allowing the authorities to cut short expensive legal action and permitting companies to move more quickly and openly on admitting misdemeanours.
Mabey & Johnson says it voluntarily disclosed the corruption to the SFO in early 2008 after an internal investigation by the company’s solicitors, Herbert Smith.
However, newspaper and NGO allegations of impropriety had been circulating for at least four years before that. Five of Mabey & Johnson’s eight directors have stepped down since spring 2008 and new management was installed last year by its holding company.
Mabey & Johnson says that since then ‘extensive anti-corruption training’ has taken place and there has been a ‘substantial revision’ of the company’s internal compliance programme. The independent monitor will be appointed to oversee and report to the SFO on the effectiveness of these measures.
Mabey & Johnson’s managing director, Peter Lloyd, said: ‘We deeply regret the past conduct of our company, and we have committed to making a fresh start, wiping the slate clean of these offences.’
He added: ‘Business ethics have been put at the heart of our business, and new whistle-blowing procedures introduced. All of our sales and associated systems have been reviewed and will be regularly updated, while all relevant staff have been extensively trained or retrained.’
Nick Hildyard, of The Corner House, an anti-corruption NGO, said: ‘This is a good start, but the UK still has a long way to go before the public at home and abroad can have confidence that it is serious about combating corruption.’
Mabey & Johnson admitted to corruptly paying more than £100,000 ($161,000) to Saddam Hussein’s regime in Iraq between May 2001 and November 2002, breaking United Nations sanctions against the country.
It also pleaded guilty at a Westminster court hearing to conspiring to make corrupt payments to politicians and officials in Jamaica between 1993 and 2001 and in Ghana between 1994 and 1999.
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