How to protect yourself from bribery allegations without restricting trade prospects.
Its two years since the UK Bribery Act (2010) came into force in July 2011 and the concerns voiced then about its impact on international trade and lack of guidance about practical actions for compliance are still being raised.
In May and June this year there were calls in the national press for a review of the Act after business leaders, especially SMEs made urgent statements about its impact on their ability to export goods and services.
A series of articles in the Financial Times, for instance, documented widespread SME complaint about the limiting and overly prescriptive nature of the Act and predicted a review might be announced by Government in June – particularly addressing the problem of facilitation payments which business leaders have told government are disproportionately regulated.
This was certainly a view felt sorely by Gareth Jones from SME WPL Ltd at TM’s recent Manufacturer Directors’ Forum meeting in Portsmouth, where he shared his sense of helplessness when seeing competitor containers exit ship yards ahead of his own because regulation in their home nation is not as rigorous.
But the mooted review of the Bribery Act was not announced by government and experts have spoken out to say such a review would be premature. Two years, after all, is not a a huge bedding in period for a piece of legislation, and the aims of the Bribery Act, to increase the transparency, ethics and true competitiveness of global business are sound.
Furthermore, the UK is not the only nation to have taken such a firm stand against bribery and corruption. The Bribery Act UK is based, in part on the US Foreign and Corrupt Practices Act – first established in 1977 with later amendments.
And for those who complain they are confused about what they should do to comply with the act, a look through the British Standards Institute’ BS10500 certification framework for the implementation of anti-bribery management systems may prove enlightening.#
The standard was launched in parallel with the Bribery Act, but Suzann Fribbins, a risk management specialist at BSI admits that awareness of the standard’s existence is relatively low.
“Since the Act came into force businesses have been very critical about the lack of guidance around what proof of ‘adequate procedures’ for the prevention of bribery should actually look like. But that is exactly what BS10500 provides, along with a very practical framework for the implementation of those procedures.
“We’ve found that the companies which have adopted the standard have been delighted to have such a straight forward, well thought through framework to help them comply with the Act and confidently pursue their business prospects at home and abroad.”
Seeking to raise awareness of the BS10500, BSI is hosting a series of workshops to explain the standards and its accreditation system to companies across sectors. The majority of these workshops are set to take place in October.
“Most of the courses are essentially guides to the different elements of the standard. There is a focus on best practice for auditing including internal operations and advice on how to approach audits for supply chain partners both upstream and downstream.”
Tackling business concern around how to raise suspicions of internal corruption and investigate suspicious employee activities, the new series of events also includes training delivered in collaboration by BSI and the City of London Police. Drawing on training resources developed for the Force’s internal fraud prevention academy, the course was announced at a press conference last month.
The course are fairly pricey, particularly from an SME perspective, ranging from £490 for a foundation in BS10500 and the benefits of an Anti-bribery Management System to £2015 for Lead Auditor training which qualifies an individual to conduct a system assessment of an Anti-bribery Management System.
But then the cost of falling foul of Bribery Act legislation is potentially limitless for an organisation.
Of course accrediting your organisation under the BS10500 is not a water tight defence against allegations of bribery and corruption, or even of conviction.
But what it does provide is a firm footing for a corporate defence and the Police has explicitly stated that it use the standard as a point of reference in any investigations of corporate bribery and corruption.
“The standard offers companies a robust way of preventing corruption and protection from allegations of institutionalised corruption.”
There’s little accounting for the actions of unruly or weak willed individuals it seems, but there is a system, acknowledged by the police, for deflecting reputational and finical damage away from companies.
BS10500 doesn’t solve the facilitation payments challenge for SMEs, but its risk based approach to the implementation of ‘adequate procedures’ to prevent bribery and corruption should give companies more confidence to pursue lucrative foreign markets.
“Because it takes a risk based approach BS10500 should be a manageable accreditation for most SMEs,” comments Ms Fribbins. “Provision of adequate procedures for the prevention of bribery in an SME, even in a high risk business area such as procurement, will be more straight forward. It is easier to put procedures in place to account for the actions of, say, five people responsible for signing contracts, than it is for a multinational to ensure they have done enough to stop hundreds of employees signing off complicated contracts involving multiple suppliers. It’s these scenarios which carry the highest risk of subtle corruption.”
BS10500 works on a three year accreditation cycle. Accreditation is obtained via a two phase audit and assessment process by BSI officials who will check that approved measure have been established and then embedded in an organisation.
Timescales for accreditation will vary dependent on company size, complexity and risk.