Bribery Bill [HL]

My Lords, it is fitting that we should have the Second Reading of the Bribery Bill on the United Nation’s International Anti-Corruption Day. The Government are committed to action to tackle bribery. It is an insidious offence that undermines good governance, distorts competition, saps economic and social development and eats away at the very fabric of democratic society. The impact of bribery in developing countries can be particularly acute. It can add 10 per cent to the cost of doing business in some countries and siphons off billions of pounds of development aid into the pockets of corrupt officials. We should be proud of the fact that the UK remains largely untainted by the pernicious presence of bribery and of our strong record as a champion of the global fight against corruption. Last month, Transparency International published its corruption perception index for 2009, which ranks 180 countries according to perceived levels of corruption among public officials and politicians. Inevitably, the expenses scandal has not helped our standing in the world, but we need to put that in perspective. The United Kingdom is ranked as the 17th least corrupt country in the world. We are equal third among the G8 countries and equal fourth among the G20. But we can and should do more. Our standing has been higher in recent years, and we need to reassert our position as a leading global champion against corruption. Taking firm action to address the expenses scandal, as we have done through the creation of the new Independent Parliamentary Standards Authority, was one necessary step. The Bill before the House, which will put in place a modern and codified framework of criminal law to tackle bribery in all its manifestations, is another vital step forward. Before I turn to the detail of the Bill, I want to make one thing absolutely clear to the House. It was evident from some of the remarks made during the debate on the Queen’s Speech that there may be some misunderstanding on whether the current criminal law on bribery meets the United Kingdom’s international obligations. Your Lordships should be in no doubt that, while the existing criminal law is clearly ripe for reform, this country was and is fully compliant with our international obligations. The issue is not therefore one of compliance or the scope of the existing criminal law, but whether it is wholly fit for purpose. The current law consists of the common law offence of bribery dating back to at least Magna Carta, and various statutory offences, brigaded under the banner of the Prevention of Corruption Acts, enacted in the latter part of the 19th and early 20th century. Given this ancestry, it is not surprising that the Law Commission has described the current law as, ""riddled with uncertainty and in need of rationalisation"." While it has long been recognised that the current law is in need of reform, there has been considerable argument and debate about the form that the new body of criminal offences should take. It is for this reason that it has taken us longer than we would have wished to get to the point when we could introduce a Bribery Bill commanding the necessary widespread support, not just from Members of your Lordships House and of the other place, but from the business community and non-governmental organisations. That we have been able to reach this position is in no small way thanks to the careful analysis and consideration, first by the Law Commission and, secondly, by the Joint Committee on the draft Bribery Bill, chaired by the noble Viscount, Lord Colville of Culross. I am delighted that he will speak in this debate. Therefore, on behalf of the Government, I record our gratitude to the Law Commission—to its chairman, in particular—and to all the members of the Joint Committee, especially the noble Viscount. It is a testament to the Joint Committee’s cogent analysis that the Government could accept, either wholly or in part, all but one of the committee’s 39 conclusions and recommendations. The fact that this Bill has had the benefit of pre-legislative scrutiny does not, of course, mean that your Lordships will not want to scrutinise it in their usual thorough and forensic manner. I trust, however, that we have reached the stage where that examination can be about the finer details of the Bill rather than its core purpose and basic structure. I now turn to the detail of the Bill. It creates two general offences of bribery, a third specific offence of bribing a foreign public official and finally a new corporate offence of failing to prevent bribery. Let me say a little more about each of these four offences. The general offences, in Clauses 1 and 2, cover on one side of the coin the offer, promise and giving of a financial or other advantage, and on the flip side the request, agreeing to receive or acceptance of such an advantage. These offences focus on the conduct of the payer or the recipient of a bribe and describe six scenarios, each involving the improper performance of a function, where one or other offence would be committed. These new offences will apply to functions of a public nature as well as in a business, professional or employment context. Clause 6 introduces a bespoke offence of bribing foreign public officials. As I have already made clear, the absence of such an offence in our current law does not put the United Kingdom in breach of our international obligations. The existing general offences and, for that matter, their replacements in Clauses 1 and 2, cover the territory of the OECD convention, which does not require a separate offence. Indeed, in September last year the City of London Police secured the conviction, under the Prevention of Corruption Act 1906, of a managing director of a Wiltshire-based company in connection with the bribery of a Ugandan Government official. Having said that, we recognise that a bespoke offence would further underline this country’s commitment to international efforts to stamp out the particularly insidious practice of bribing foreign public officials, not least because of the devastating impact that such practices can have in developing countries. This quartet of new offences is completed by the offence of failure by a commercial organisation to prevent bribery. Again, corporate liability for bribery, as with other offences, is an existing feature of our criminal law. But this is another area where there is a compelling case for a bespoke, targeted offence. One of the core conclusions of the committee chaired by the noble and learned Lord, Lord Woolf—I am delighted that he is speaking in this debate—into the ethical policies and procedures of BAE was the need for a proactive role for a company board in securing and maintaining high standards of ethical business conduct. We agree. But these are matters that are too important to be left to the commercial sector alone. The Law Commission came to the same conclusion. Clause 7 creates an offence of failing to prevent bribery which can only be committed by a relevant commercial organisation. The clause also provides for a defence for a commercial organisation to show that it had adequate procedures in place to prevent bribery. We recognise that there has been considerable debate about what constitutes "adequate procedures" for these purposes. As we indicated in our response to the Joint Committee, the Government agree that guidance should be made available to commercial organisations. We propose that such guidance should be available well in advance of the new offences coming into force. Over the coming months we will develop appropriate guidance, drawing on the expertise of business representatives, Transparency International and others. Among other things, we envisage that the guidance will provide illustrative good practice examples of adequate procedures. While guidance will be in place to assist business, the message from the Bill is clear. The payment of bribes, including facilitation payments, is unlawful. If companies pay them in order to gain a business advantage they run the risk of prosecution. Bribery on any scale cannot and should not be tolerated or condoned. Clause 12 provides a defence for law enforcement agencies, the security services and the Armed Forces. This is a significant departure from the draft Bill which included an authorisation scheme in respect of the security services. That scheme did not find favour with the Joint Committee. We accept that an authorisation scheme, which was capable of conferring a broad exemption for the security services, was arguably cast too widely. I welcome the fact that in its briefing, Transparency International, ""accepts that the Government has responded positively"," to the Joint Committee’s recommendation on this issue. While we have removed the authorisation procedure, we remain firmly of the view that some provision is required to address those circumstances in which the security services, law enforcement agencies and the military may have to use financial or other inducements to enable them effectively to discharge their functions. We note of course that the much-respected Constitution Committee of this House has expressed some concerns about this clause in the report it published last Friday. We thank the committee and its chairman for the report. Your Lordships may be assured that we will study it and its conclusions with care. We will respond to the committee in due course, having also heard the views of other noble Lords on this issue today and later on in Committee. There is one point that is not in the Bill but which the House would expect me to mention. The general offences in the Bill apply to all those performing functions of a public nature. As such, we intend that the Bill would apply to Members of this House and of the other place. The Joint Committee did not demur from this. It is, I believe, axiomatic that no Peer or Member of Parliament should be above the law. The draft Bill sought to deal with the consequences of this by providing for Article 9 of the Bill of Rights 1689 to be waived so that the words or conduct of a Member of Parliament or Peer charged with an offence under the Bill may be admissible as evidence. We recognise that the issue of parliamentary privilege is an emotive one, as we saw during the passage of the Parliamentary Standards Act. Members of both Houses rightly do not want to see an erosion of hard-won freedoms. The Joint Committee took the view that there were dangers in adopting a seemingly piecemeal and inconsistent approach to parliamentary privilege and suggested that the matter should more appropriately be dealt with in a parliamentary privilege Act. Given the Joint Committee’s conclusion on this matter and the complexities and sensitivities surrounding this issue, we have not included provision in respect of parliamentary privilege in the Bill as introduced into your Lordships’ House. None the less, we recognise that the House will wish to consider this issue carefully during the course of our debates, both today and during the subsequent amending stages of the Bill. We look forward to those debates and will reflect carefully on what is said on both sides of the argument. This is an important Bill which will deliver a modern and comprehensive body of criminal law to support the work of law enforcement agencies and prosecutors in rigorously combating bribery, both in the United Kingdom and abroad. It is an outcome to which everyone can subscribe and I hope the Bill will enjoy support from all sides of the House. We look forward to working with noble Lords to ensure its speedy progress. I commend the Bill to the House.