Bond letter to Prime Minister on Bribery Act review

Regent’s Wharf · 8 All Saints Street · London · N1 9RL · United Kingdom +44 (0)20 7837 8344 · bond@bond.org.uk · bond.org.uk

Rt. Hon. David Cameron MP Prime Minister 10 Downing St London SW1A 2AA

13 June 2013 Dear Prime Minister, Re: Bribery Act review The Bond Anti-Corruption Group is a collection of civil society organisations committed to tackling corruption and promoting international development. We are writing to you in response to rumours that the UK government may be considering a review of the Bribery Act 2010 or its implementation.

Firstly, we urge you to stand by the Bribery Act as a ground-breaking piece of legislation that establishes the UK as a global champion in tackling corruption.

Secondly, we have repeatedly argued that in key areas such as associated persons and joint ventures there is a lack of clarity in the Ministry of Justice Guidance for Companies (see attached annex for more detail). As such, if there is a review of the guidance we would welcome government action to clarify these areas. We believe that clarity over such areas will support companies, including small and medium business enterprises, to implement the Act effectively and with minimal costs.

We welcome the personal leadership you have shown ahead of the G8 presidency on the tax and transparency agenda, and in particular the emphasis on transparency of beneficial ownership which is a bold step towards curbing corruption and tax avoidance.

The Bond Anti-Corruption Group has been a strong supporter of the UK Bribery Act. It is sound legislation which went through extensive consultation with relevant stakeholders, including civil society and business, and it enjoyed strong cross-party support in Parliament. It is just beginning to bed in: The Serious Fraud Office is currently investigating a number of serious potential corruption cases and we strongly believe that the legislation should not be reconsidered only two years after its (delayed) implementation.

While we understand that some smaller companies are genuinely concerned about how to comply effectively with the legislation without incurring unnecessary costs, this should not act as a pretext for watering down the Act. Since the Bribery Bill was introduced in 2009 there have been concerted efforts by a small but vocal minority to weaken it or prevent it passing into law.

This minority often use arguments about the level playing field, red tape or why certain types of bribery do not count.

● Registered Charity Number 1068839 ● Company Limited by Guarantee Registration No 3395681 (England and Wales)

Regent’s Wharf · 8 All Saints Street · London · N1 9RL · United Kingdom +44 (0)20 7837 8344 · bond@bond.org.uk · bond.org.uk

Tackling corruption helps to promote the development of good business around the globe, supports countries’ governments in raising revenue and spending it effectively, and promotes good governance. The UK has championed transparency as a tool to help tackle corruption and tax evasion as a core component of its forthcoming G8 presidency. If the UK is to protect its international reputation it must take steps to lead these efforts in all areas and stand by the UK Bribery Act in order to cement its position as a global champion in this area.

Yours sincerely,

Chris Bain, Director CAFOD Cathy James, Chief Executive Public Concern at Work

Nicholas Hildyard The Corner House

Matthew Frost, Chief Executive Tearfund Gavin Hayman, Director of Campaigns Global Witness

Robert Barrington, Executive Director Transparency International UK Fredrik Galtung, CEO Integrity Action

In copy to Rt Hon Dr Vince Cable MP, Secretary of State for Business, Innovation and Skills and Rt Hon Chris Grayling MP, Lord Chancellor and Secretary of State for Justice

● Registered Charity Number 1068839 ● Company Limited by Guarantee Registration No 3395681 (England and Wales)

Regent’s Wharf · 8 All Saints Street · London · N1 9RL · United Kingdom +44 (0)20 7837 8344 · bond@bond.org.uk · bond.org.uk

Further Briefing Bribery was a criminal offence before the introduction of the act, and companies which do not pay bribes have nothing to fear from this legislation. The ‘adequate procedures’ defence only comes into play when a company faces prosecution, which itself is subject to a public interest test.

The Bribery Act will help create corruption-free economies which are overwhelmingly in the interests of business and create a truly level playing field, which is a business environment particularly beneficial to the micro and small local businesses (MSMEs). Since MSMEs supply about 90% of the jobs in developing countries, this is one of the ways in which tackling corruption promotes local economic development, which is a priority for poor men and women to work themselves out of poverty, rather than becoming reliant on aid or other external sources of finance.

The Bond Group has always been concerned that the Ministry of Justice Guidance for Companies could potentially mislead companies and interfere with the work of those charged with enforcement, especially with regard to the following points: Extra-territoriality: The guidance introduces some ambiguity around the jurisdiction of the law.

The act should be broadly interpreted in order to prevent an unfair playing field for UK companies and to create a global norm. This means including all companies listed on UK stock exchanges and foreign companies that operate subsidiaries in the UK. Subsidiaries and Joint Ventures: The guidance appears to introduce some ambiguity in relation to liability for bribes paid by joint ventures and subsidiaries. We believe companies should be held liable for bribes paid by their subsidiaries and joint venture partners, even if they benefit only indirectly by virtue of their relationship with them. Excluding certain subsidiaries and joint venture partnerships creates a potentially dangerous legal loophole which could be exploited by unscrupulous companies.

Prosecutorial Discretion – ‘public interest’: A failure to prosecute bribery leads to deterioration in governance in locales where both UK businesses and UK aid programs operate. There is therefore a clear public interest in ensuring that UK businesses have the ability to flourish in stable investment climates and that the impact of UK aid money is not undermined by corruption and poor governance. For both of these reasons, there is a public interest in prosecuting all serious instances of bribery.

If the government is to open up a review of the guidance, the above points should be taken into consideration and we would welcome the opportunity to input.

The Act is key to the UK’s compliance with the OECD Anti-Bribery Convention and helps enshrine the UK as an international champion of transparency and good governance.

● Registered Charity Number 1068839 ● Company Limited by Guarantee Registration No 3395681 (England and Wales)