A one pager on . . . bribery, corruption and whistleblowing
November 01, 2003
With the UN declaring December 9 as the international day for anti-corruption, Briefing provides a short overview on the subject.
What constitutes corruption?
Cronyism, extortion, fraud, and money laundering are the most familiar forms of corruption. Bribery – the giving or taking of money or other benefits to obtain inappropriate commercial advantage – also represents a pervasive sub-set of corruption.
Is corruption a problem in the UK?
According to Transparency International’s Corruption Perception Index, the UK ranks 11th – above the US (18th), Japan (21st), France (23rd) and Italy (35th). (See table)
What are the UK anti-bribery laws?
UK company law has long prohibited domestic cases of corruption, but not corrupt practices overseas. This changed when the Anti-terrorism, Crime and Security Act 2001 became law in February 2002. The Act allows for UK companies and UK nationals to be prosecuted in the UK for acts of bribery committed wholly overseas. This has been the case in the US since 1977 under the US Foreign Corrupt Practices Act.
The new legislation also includes provision against ‘facilitation payments’ which are made, in the words of Commentaries on the OECD Convention, ‘to induce public officials to perform their functions, such as issuing licenses or permits’. The Anti-terrorism Act, however, does not apply to overseas subsidiaries of UK companies. No UK company has yet been prosecuted under the new legislation.
What about the new UN Convention Against Corruption?
This has been three years in gestation and will be officially signed by participating nations on December 9 in Mexico (see page 18 for the main provisions of the Convention). The Convention builds on other international guidelines, such as the EU Convention on Corruption in 1997 and the 1996 UN Declaration on Corruption and Bribery in International Business Transactions, which eliminated the tax deductibility of bribes.
Which companies have developed anti-corruption programmes?
Most companies with codes of conduct now make mention of anti-corruption practices. The challenge for them is to demonstrate how these are being applied. Shell’s disclosure of the number of bribes received by its employees (four in 2002, as in 2001) provides a good example of transparency.
What provisions are there for whistleblowing in the UK?
In the UK, the legal provisions governing whistleblowing are set out in the Public Interest Disclosure Act 1998. The Act adds to the Employment Rights Act 1996, a means for employees to seek redress if sacked as a result of making a ‘qualifying disclosure’. This includes reference to criminal offences such as bribery and the failure to comply with a legal obligation.
Resources
-www.bsr.org: Business for Social Responsibility provides an excellent ‘white paper’ on corruption and bribery.
-www.transparency.org: Transparency International, a Swiss-based NGO, works with the private sector to develop applicable principles to combat corruption. It also publishes the annual Global Corruption report.
-www.pcaw.co.uk: Public Concern at Work is a specialist whistleblowing organisation that provides help to individuals, as well as information on legislation and best practice.
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