On 29 October we commented on an article published by www.building.co.uk (an award publication focussed on the construction industry).  As you need to be a subscriber to see the article we thought we’d republish our comment on the piece on our site too as the issues it covers are important and work on a stand-alone basis.  Here is what we said:

“Three additional points specifically relevant to the construction sector, a free anti-bribery & corruption masterclass for businesses in the construction industry and a further suggested resource to go for more free tips:

1. The construction industry

The SFO are putting organisations in no doubt that they will have little sympathy for those who they catch and have not made their best efforts to comply with the new law. Three of the recent successful investigations conducted by the SFO involve the construction industry.  Businesses in the construction sector are on notice that they are on the SFO’s enforcement radar and should take steps now to ensure that the defence of having “Adequate Procedures” is available to them when the new law comes into effect next April. This means businesses in the construction industry should put in place “Adequate Procedures” to prevent bribery now.

It is sometimes said that compliance with the new law is impractical in the construction sector. However companies who have embraced the anti-bribery & anti-corruption culture in the industry including Balfour Beatty and AMEC show that it can be done. They are to be applauded.

There are sector specific issues that increase risk for the construction industry (including for example the use of third party contractors, joint ventures and operations in places with poor reputations for corruption).

We shall be running a free sector specific construction industry anti-bribery and corruption masterclass early next year when the guidance for the legal defence to prosecution under the new law is finalised. There are limited places; if you are interested in attending pre-register by clicking on this link (which also has more details about it).

2. SME’s

It is acknowledged that SME’s suffer the disadvantage that they simply do not have the muscle and resource of their larger counterparts when adopting a hard line against bribery and corruption. One solution to this problem could be in SME’s clubbing together in relevant industry associations creating strength in numbers to agree “Adequate Procedures”, a common approach and a single voice in banning corrupt practices.

3. Facilitation payments & corporate hospitality

The position in relation to facilitation or so-called grease payments is straightforward (in law at least). The SFO expect all organisations to ban them. Corporate hospitality has generated equal debate. Our view is that common sense is the touchstone in this area. The SFO share this view. We asked the SFO General Counsel, Vivian Robinson QC, about this at length when we interviewed him during a webinar we ran in September. We are pleased to see that view reiterated here by the SFO. We recently posted on corporate hospitality here.

Useful resource

It is clear that the SFO mean business. Only this week a former CEO of a city firm was jailed for just under 2 years and fined £100,000 for his part in bribery relating to an overseas contract.

There have been a number of prosecutions and civil settlements in recent months under the old law which is recognized as needing updating. We have it on good authority there are more in the pipeline. The new law will make it easier to prosecute. We anticipate more investigations and some high profile prosecutions (including senior executives). Don’t be one of them…

For the news and tips for compliance check out our free website.

Barry Vitou & Richard Kovalevsky QC
http://www.thebriberyact.com”

A link to the www.building.co.uk website and the indexed article is here.