The recently enacted Bribery Act 2010 is stricter than any other anti-corruption laws introduced in the UK, with an impact that reaches as far as the new law’s jurisdiction. Any company that operates in the UK should be reviewing its anti-bribery policies before the new legislation’s introduction in April 2011. But for HR and recruitment professionals, the Bribery Act could impact on some day to day activities, and the cost of getting it wrong could be much more than a financial penalty.

Many legal experts have described the new Act as one of the most significant reforms to corporate criminal law in a century. It has introduced an offence of corporate failure to prevent bribery, the first time such a law has existed in the UK, and the penalties for those caught out are strict. Companies can expect massive fines for taking part in corrupt activity and individuals could face up to ten years behind bars.

There have been moves towards the introduction of more stringent anti-corruption laws in the UK for some time, however, it's largely believed that the Bribery Act 2010 moved through parliament so quickly (it was passed by the House in April this year) because of the high profile scandal involving a well known UK company and the government of Saudi Arabia. Opponents of the legislation argue that the new Act will hamper UK PLC’s competitiveness, but the fact remains that the new(ish) coalition Government supports the Act, and like the Agency Workers Regulations we discussed earlier this year, it's coming and we need to be prepared.

The new Act will replace all the old anti-corruption laws and its implementation will create five new offences, these are:

•    The giving of bribes
•    Accepting bribes
•    Bribing a foreign public official
•    A new corporate offence of failing to prevent bribery
•    A senior company officer offence of consenting to or conniving in bribery by the company

The big difference between the new laws and the old is the new corporate offence of failing to prevent bribery. Under the old laws it was very difficult to prove, and therefore convict, a commercial organisation of an act of bribery. Under the new laws, an offence will have been committed by an organisation when:

A person performing services for the commercial organisation bribes another person (by way of active bribery or bribery of a foreign public official).

Or

The bribe is in connection with the commercial organisation’s business.

In order to form a defence, any company accused of bribery under the new Act will have to demonstrate that it had “adequate procedures” in place that were designed to prevent bribery being committed on its behalf.

The law is broad and applies to acts of bribery committed by any associated person of the company. This means that it includes not only subsidiaries and employees of a company, but also any agents, intermediaries, indeed anyone acting on behalf of the company in any capacity. It also has a far geographical reach as it applies not only to UK companies, but to companies that do business in the UK as well.

So, according to the Act, a person is guilty of bribery if “he offers or gives a financial or other incentive to someone with the intention of getting that person or a third party to perform a function or activity improperly or as a reward for an improper act. He is also guilty if he knows or believes that the offer or payment itself constitutes an improper performance of a relevant function or activity.” Improper performance seems to occur when the person responsible for an activity is expected to act in good faith or impartially, or is in a position of trust and fails to do so.

A bribe does not have to be the brown envelope stuffed full of ten pound notes as commonly seen on TV or in the cinema, exchanged with a briefcase passed under a table in a restaurant. Any type of improper advantage, benefit or reward which is offered in an attempt to persuade a person or company to do business with you can be considered a bribe. Although it’s also worth noting that bulk discounts and sales incentives are allowable as long as they can be justified as a legitimate business function and are linked to corporate as opposed to personal gain for the individual granting or receiving the discount.

For recruitment and HR professionals, it may appear that the Bribery Act does not affect them. But the best advice I could give here is to make sure. Some recruitment and HR service providers have been known to offer rebate payments or incentives to use their services and this is where a HR professional could come unstuck. It’s a very grey area but under the Act, rebates and incentives etc do have the potential to constitute a bribe.

If a recruiter or employment professional is expected to be impartial and act in good faith, and had failed to do so because of a commercial arrangement with a specific supplier, then the offences under the Act could be applied.

Suppliers often offer prizes or rewards to recruiters and HR managers who are potential clients. Under the old laws, this would be fine. Under the new legislation, you could be caught out.

Corporate hospitality is another grey area. It has been reported that the Ministry of Justice’s view is that lavish corporate hospitality can be used as a bribe to secure advantages and that the Act must be able to crack down on this. As a result, businesses are expected to err on the side of caution and set tight limits on the value of corporate hospitality offered or accepted.

Similar to the Agency Workers Regulations (AWR), we are speaking to many recruiters, recruitment consultants and HR professionals everyday and the awareness of the new Act is low to say the least. Once the Act has been explained to them, the nervousness kicks in, with companies worried about some of the incentives and kick backs they currently enjoy from their suppliers, and some of the practises they use themselves to secure new business.

And, as with the AWR, awareness and compliance is key. Be aware of the legislation, get to grips with the detail, then conduct a full review of your organisation and identify areas of your operations that may leave you vulnerable. On what basis do you select the recruitment partners you work with? Are your frontline staff aware that the organisation as a whole, as well as themselves as an individual, are at risk if they are found to be operating in a corrupt manner. Have you got the correct policies in place to deal with the Act once it comes into force next April?

On the surface, the Bribery Act is a scary piece of legislation with far reaching consequences, but it is being introduced for the right reasons, and as with all these things, if you and your company are prepared, are transparent about how you go about your business (this goes for your suppliers too!) and have the correct policies and procedures in place, then there is nothing to fear.

The government has also very recently published guidance to accompany the legislation which you can read here:

http://www.justice.gov.uk/consultations/docs/bribery-act-guidance-consultation1.pdf