A nervous disposition
It has been widely reported this week that Jack Warner has resigned from FIFA’s Executive Committee. This follows his recent suspension in connection with allegations (which are vigorously denied) that he and fellow FIFA member Mohamed bin Hammam were implicated in the bribery (to the tune of USD 1m) of 25 members of the Caribbean Football Union, as part of Mr bin Hammam’s abortive bid for the FIFA Presidency. At the time of writing, the latest reports indicate that a leaked FIFA ethics committee report into the matter states that there is overwhelming evidence of the payment of bribes in support of Mr bin Hammam’s bid for the presidency, and that Mr Warner was an accessory to corruption.
With the UK’s Bribery Act 2010 coming into force in a matter of days on 1 July 2011, this whole affair is a timely reminder for employers of the business risks posed by bribery and corruption.
Of course, bribery and corruption has always been an area of risk for employers. At Kingsley Napley, with a leading white collar practice we have a wealth of experience of representing clients at the sharp end in bribery and corruption matters. But with the legal and regulatory landscape changing, the risks for employers are on the increase. Employers should review their businesses, policies, procedures and controls to ensure they are managing their risks. Needless to say, the potential consequences of committing an offence under the Act are very serious indeed: potentially unlimited fines, and very lengthy prison sentences.
Bribery is widely defined in the Act. It can include many common business practices, such as providing clients with gifts, hospitality and entertainment, depending on the circumstances. In brief summary, the Act provides for corporate and personal criminal liability by introducing four new criminal offences (bribing another, being bribed, bribing a foreign public official, and failure by a commercial organisation to prevent bribery). This latter offence will clearly be of particular concern to employers. It works by focussing on situations in which an organisation fails to prevent an “associated person” from bribing a third party for the benefit of the organisation. The definition of “associated person” is itself very wide. It includes not only employees, but also others such as agents, consultants, agency workers, and even volunteers. In FIFA’s case, the relevant parties who have been implicated in the whole affair would plainly be “associated persons”, even though they are unlikely to be employees.
This illustrates one of many tricky areas for employers, which is the potential liability for the actions of consultants, agents and the like (even those based abroad), over whom employers traditionally have not exercised much control. The contractual arrangements with such parties should be reviewed and amended if necessary. Equally, it may be necessary to review other existing documents including employment contracts, disciplinary rules and procedures, bonus and commission schemes (which unintentionally can operate to incentivise rogue employees to engage in corrupt practices) and whistleblowing policies.
There is also the potential for employment discrimination allegations to arise, but equally employers are expected to consider the corruption risk profile of their business (for example, in terms of any business they do in developing countries which may be considered particularly high risk) and to ensure that any particularly high risk business is subject to appropriate risk management. Employers who decide to adopt particular policies in connection with business in certain countries or regions should ensure that there is objective evidence to support their approach.
In planning a corporate anti-bribery and corruption strategy, particular account should be taken of the Ministry of Justice’s guidance. It is clear that the MoJ expects organisations to exhibit a pro-active approach to addressing bribery and corruption risks within their businesses, and a joined-up strategy that is open, transparent and supported from the top down. This is not a “one size fits all” area of law, hence the MoJ’s guidance is useful in its commitment to proportionality, and its inclusion of worked examples and indications of the sort of steps that employers need to consider to protect themselves. Employers really should act now to ensure they are protecting themselves.
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