February 22, 2011

The UK Bribery Act – Hurry Up and Wait

For most multinational organizations the UK Bribery Act has caused a great deal of concern. Not totally dissimilar from the Foreign Corrupt Practices Act, it does have some unique differences such as disallowing facilitation payments and much broader jurisdictional reach. Organizations have accelerated their preparations only to be kept waiting for the official guidelines to be issued by the UK Serious Fraud Office. On February 2, 2011, the Serious Fraud Office announced that the twice delayed April 2011 effective date would now be sometime this “autumn.” This begs the question, why are we still waiting?

Do our colleagues across the pond really need help putting together the guidelines around defining bribery? Or establishing adequate procedures to mitigate bribery and corruption? Riddle me this…we are talking about a concept that is as old as Judas, and the US has been refining the Foreign Corrupt Practices Act (FCPA) for over thirty years! With an active FCPA “template” that has levied fines in the billions of dollars the past three years, developing the UK’s regulatory guidelines around bribery and corruption should not be this arduous. But do they really need the FCPA? The UK signed the anti-bribery convention – and has its language – in accordance with OECD more than 10 years ago. In my mind, there is no technical reason why the UK is having trouble developing a bribery policy.

But observers protest that is only half the problem– what about the defining the guardrails for adequacy in mitigation and potential injunctive relief? No good template you say? Au contraire! The US Sentencing Guidelines – and specifically Chapter 8 of the guidelines – have been around since 1991 and were revised again last year. So what is the hold up?

I could be a bit of an ugly American here and suggest that the Brits are simply distracted from the task and more consumed with high tea, Manchester United’s march to the EPL Championship, or preparing diligently for the Chelsea Flower Show than getting the Act fully promulgated. But my jest aside, this problem is completely political.

The reality is the change in government after the recent election and aggressive lobbying from UK business have created this delay. I have the utmost respect for Vivian Robinson, the General Counsel for the SFO. Robinson is bright, engaged and dedicated to the task. He knows what to do, but he must gain consensus in the UK government before announcing the guidelines. I will be moderating a panel in London the end of March where Robinson will be sharing his views. I sincerely look forward to learning from him and sharing with you after our meeting.

So let me turn the tables. What is keeping corporations who do business in England, Ireland and Scotland from taking appropriate steps to mitigate their impending risk? Multinational companies who contend with FCPA are already 95% compliant. Most do a good job of defining appropriate facilitation payments and controlling them. All indications are that the SFO will be logical with their view to these payments. But what is keeping the rest of these companies doing business in the region, especially the ones who comprise the “extended enterprise” of most multinationals, sitting on the sideline?

The writing on the wall is clear, but it seems that unfortunately we continue to confuse good business practice with regulatory requirement. Mitigation of bribery and corruption is good for business and good for the global economy. So, in my opinion, it is time to do what is right – even without a looming legal mandate.

Does anyone else share my opinion?

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About Me


David Childers
President
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of EthicsPoint


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Favorite Quotes:

Ronald Reagan
There are no easy answers, but there are simple answers. We must have the courage to do what we know is morally right.

John Quincy Adams
If your actions inspire others to dream more, learn more, do more and become more, you are a leader.

Aristotle
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Ray Kroc
The quality of a leader is reflected in the standards they set for themselves.

John Maxwell
The first step to leadership is servanthood.