This month we have seen the courts deliver the first sentence under the UK Bribery Act. However, it was not a UK company paying bribes in Africa, as many in the anti-bribery lobby expected. Rather, it was a 22 year old administration clerk at Redbridge magistrates court who earned £20,000 from helping drivers avoid penalty points – and was filmed by The Sun newspaper doing so. However, the sentence of three years in prison (together with a concurrent sentence of six years for misconduct in public office) should be enough to catch the attention of directors in UK companies that operate in areas of the world where bribery is part of business culture or which routinely pay bribes as part of their operational activities.
But a severe sentence should not come as a surprise. Whilst the UK has been criticised heavily by the OECD over the last ten years for its lack of bribery prosecutions, when a bribery case has come to Court, the judges have, quite rightly, treated it very seriously.
The implications on society are well understood. In the case of Munir Patel, the Court emphasised that his bribery undermined the integrity of the UK Court system (after all, we associate bribery of the judiciary with developing countries, not the UK) and distorted the insurance premiums charged to bad drivers.
So what message does Munir Patel bring to the captains of global industry? It must be that anti-bribery policies must be treated with the utmost seriousness and companies must consider whether they can afford to do business in countries where bribery is endemic without making a public commitment to help eradicate bribery there. The Bribery Act has brought in the need for “adequate procedures”, but the Munir Patel case highlights the urgent need to make these procedures a reality. It is true that the SFO does not have the resources to investigate and prosecute more than a tiny number of cases of international bribery – but The Sun newspaper does have the resources to conduct sting operations – and the US Department of Justice seems to have limitless resources to catch out UK businesses that fall under its remit.
The defence to the Bribery Act for a corporate is to show that it has adequate procedures in place to prevent bribery. This is no small undertaking. Procedures need to be proportionate with top level commitment, risk assessments, due diligence, communication, training, monitoring and review. Procedures need to be tested to ensure they are actually working and that employees on the ground have heard of them and understand them.
What about facilitation payments? The Prosecutorial Guidance to the Bribery Act states that the Serious Fraud Office is not likely to prosecute an isolated instance of a “grease payment”, but the OECD is keen to get rid of facilitation payments around the world. Given the UK courts’ comments on Innospec and now Munir Patel, one can imagine a UK court handing down a fairly severe sentence in any facilitation payment case that came before it on the basis that endemic facilitation payments hurt the poor proportionately more than the rich in the countries where they are paid, which is the case.
Munir Patel may have found a new way of boosting his salary in Redbridge, but he is the first person convicted under the new Bribery Act and his sentence has been noted by the anti-bribery movement around the world. One can only hope that his sentence of three years for bribery will be the necessary catalyst to bring the Bribery Act and its adequate procedures guidance to the attention of boardrooms throughout the UK.
29 November 2011