Recently The Telegraph reported that the government has bowed to business pressure and the interests from the City of London in weakening the Bribery Act. According to a ‘leading lawyer’ interviewed by the Telegraph who has seen the guidance a ‘lot of what is in there will be welcomed by business’.
This is troubling.
The new guidance being prepared allows companies to avoid prosecution for some ’facilitation payments’.
So what is a facilitation payment and why should we care?
A facilitation payment is a payment made to an official to perform a function they would normally carry out as part of their job. It’s ‘grease’ money that speeds up a bureaucrat’s decision.
Examples of facilitation payments include the following:
- Granting a permit, licence or other official document that qualifies a person to do business
- Processing government papers such as a visa or work permit
- Providing police protection or mail collection or delivery
It might seem like it’s not that serious - that facilitation payments are necessary to ‘get the job done’. But they are a real problem.
Indeed the OECD considers facilitation payments to have a ‘corrosive’ effect on sustainable economic development and the rule of law recommended that Member countries, including the UK should review their ‘policies and approach’ in order to effectively combat the phenomenon.
Currently, business groups argue that it is impossible to do business without making facilitation payments. Yet, facilitation payments are already illegal under current UK laws so the Act does not create a new bribery offence.
At the very least, it’s expected that the guidance notes will acknowledge that these payments are a problem that cannot be eradicated overnight.
But that can’t be used as an excuse for inaction. Already, a large majority of the 38 countries that are party to the OECD Convention ban facilitation payments, and those that legally ‘permit’ them usually only do so in specific or exceptional circumstances.
Furthermore, because they’re illegal in many countries, many companies already outlaw them entirely.
Indeed, it’s not just NGO’s and development organisations that are calling for the full implementation of the Bribery Act as originally passed. Investor groups recognise the benefits that the implementation of the Bribery Act provide.
The International Corporate Governance Network is arguing that any dilution of the act would be ‘bad’ for Britain’s reputation. Representing institutional investors across 50 countries with a total wealth portfolio of $12 trillion dollars - or more than twice the size of China’s economy - ICGN argued that it was in the interest of global investors and UK industry ‘that there is a clear and enforceable anti-bribery law in the UK’.
It’s time that the government becomes serious in its commitment to combating corruption.
Appointed last June, Ken Clarke’s role is to be the UK’s international anti-corruption champion. When they announced the position No 10 declared that it demonstrated their commitment to ‘transparency and accountability’.
Ken Clarke, went so far as to describe his role as sending out:
‘… a clear message that the UK coalition government will not tolerate bribery or corruption and that we will work together to stamp out these practices across the board.’
It’s time for the government to start listening to it’s own ‘message’. Corruption is a serious problem and watering down the Bribery Act will not curb it’s corrosive effect on those who already suffer the most – the poor.
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