The Guidance to the Bribery Act 2010 published recently by the Ministry of Justice confirms that small bribes paid to facilitate routine Government actions overseas – facilitation payments – could trigger liability under the Act. This presents those advising clients operating overseas with a dilemma; how do we advise a client that they should go ahead and do business in countries where corruption (or at least facilitation payments) is a way of life?
While it is a defence to show that “adequate procedures” have been put in place to prevent bribery, the devil is in the detail. For example, how will a client undertake meaningful risk assessments or due diligence prior to entering into contractual arrangements with third parties which is sufficient to satisfy prosecutors in the UK?
These issues were at the forefront of my mind during a recent visit to Kenya with a client to see how we as a firm could help with a large energy infrastructure project.
Poor governance and rampant corruption in Kenya has had a negative impact on the country’s efforts to attract investment. Nevertheless, Kenya has tried to introduce legislation under the Anti-Corruption and Economic Crimes Act 2003, the Public Officer Ethics Act 2003 and the Public Procurement and Disposal Regulations 2006.
Despite their efforts, it appears that corruption remains widespread in the public procurement of projects. Companies frequently encounter demands for bribes and informal payments to get an introduction to the “right person” or to “get things done”.
On my visit I was introduced to a business development consultant. It soon became clear that he was an agent who was simply facilitating introductions for foreign companies to public officials. The alarm bells rang loud and clear and I soon came to the conclusion that there was no way I could advise my client to enter into what would be a facilitation agreement with the consultant. I was soon on a plane out of the country with my client.
The Bribery Act applies principles accepted in countries where bribery is culturally and legally unacceptable. The same cannot be said about many economies, such as some in Africa. The net result of equating facilitation payments with bribes means that UK companies need to be very careful in their dealings with countries where facilitation is a way of life.
