International - Written by Barry & Richard on Tuesday, February 1, 2011 2:04 - 0 Comments
The Bribery Act and competing globally: The other side of the coin
Critics of the Bribery Act argue that it will make UK PLC uncompetitive on the world stage. That must be avoided.
However, it is important that the guidance now being finalised by the Ministry of Justice is published as soon as possible. Otherwise attempts to ensure that the Bribery Act does not make UK PLC uncompetitive are likely to have the opposite effect.
Ethical companies (and contrary to what you may think there are plenty) should not be disadvantaged
When we spoke with Richard Alderman, director of the SFO, yesterday afternoon he emphasised that the SFO intends to use the new law to create a level playing field for corporates and observed that while the Bribery Act was delayed ethical UK corporates would be disadvantaged. Put another way, companies who have busily been preparing for and complying with the Bribery Act should *not* now find that those who have not gain advantage.
Chandrashekhar Krishnan, Executive Director of Transparency International put it this way:
‘The Act is a robust piece of legislation that will help to level the playing field for the vast majority of UK companies that want to conduct their business in an ethical manner. This delay creates unnecessary uncertainty for these companies and exposes the Government to international criticism that it is not serious about combating corruption’.
There is another reason why delay in the implementation of the Bribery Act would backfire on UK PLC if the delay became protracted.
Keep UK off of international blacklist
Overnight, in a great article, the Guardian reported that Mark Pieth, the Chairman of the OECD reacted to the delay with frustration and raised the spectre of blacklisting UK companies. He said:
“This move will hurt the competitiveness of British industry at a moment when it is most vulnerable. Allowing companies to continue to generate business by bribery actually weakens their competitive clout as they become dependent on illegal means…..The OECD has in October 2008 … already threatened to blacklist British companies if they remained under-regulated, and patience is running out fast. Competitors are getting ready to take robust action against the UK in the light of continued lack of compliance with international law.”
It is unrealistic to hope that the UK will dodge the bullet of putting in place the new Bribery Act. As we explained in our article ‘The Bribery Act and the review by No. 10. Will pigs fly? We don’t think so.’ The new law represents (i) an overhaul of existing law which everyone agrees is not fit for purpose and (ii) complies with international obligations the UK signed up to 15 years ago.
Of course the new guidance must be right. But delay and procrastination is not the solution. We expect that the guidance will be published sooner rather than later.