Ethical Performance
inside intelligence for responsible business


Anti-bribery law toughens the stance on corruption

March 2010

Jerry Hagelberg sees a global culture change reflected in new UK legislation against bribery

Business ethics will receive a significant boost early in the new decade with the enactment, expected before the general election, of a long-awaited comprehensive UK anti-bribery law providing more effective weapons against corruption in Britain and abroad.

Replacing existing common law and statutory offences, the law will make it illegal for individuals and companies both to offer and give a bribe, and to request or accept one. Bribing a foreign public official becomes a specific offence, as does corporate failure to prevent bribery. Offending businesses will face an unlimited fine, and individuals up to ten years imprisonment.

The law will have global reach by enabling prosecution in a UK court of individuals or companies resident or doing business in this country for bribery offences committed anywhere in the world. With it, the UK implements the recent agreement among 38 countries, signatories of the 1997 OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, to step up the fight against corruption. Lawyers see the new measure going beyond the US Foreign Corrupt Practices Act of 1977 in that it covers both commercial bribery and that of public officials as well as facilitation payments.

In restoring Britain's reputation as upholder of business probity, which had taken a severe knock from the decision to drop the BAE Saudi Arabia case, the new legislation reinforces the signals from heightened Serious Fraud Office activity and last year's first conviction in the UK of a company for overseas corruption.

All this may well raise Britain a notch in Transparency International's Bribe Payers Index, which in its last (2008) edition, embracing 22 leading exporting countries by the tendency of their firms to bribe abroad, ranked the UK in joint fifth place with Germany and Japan - the cleanest being Belgian, Canadian, Dutch and Swiss companies – and ahead of the US in ninth place, together with France and Singapore.

Behind the growing willingness to tackle the issue in recent times lies the realisation of the extent to which it constitutes a drag on economic development and a business cost, with the risk of eye-watering fines. Yet bribery and corruption have been around since ancient times and come in many forms, grand and petty. To comply with the law, companies will have to address complex questions. The case against multi-thousand-dollar bribes is clear. But isn't it morally defensible to pay the hundred-dollar bung demanded by a Havana airport customs inspector to let through a suitcase full of gifts of soap and suchlike for friends and acquaintances?

The ethical high ground is littered with such shards, and it will be up to CSR practitioners to help compliance officers clear it.

Jerry Hagelberg is editorial advisor to Ethical Performance

Jerry Hagelberg | UK & NI Ireland | Business ethics


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