Bribery Bill [HL]

My Lords, it is a rare—even unique—pleasure for a Minister on the Front Bench to hear such unanimous support for a government Bill. I am not sure that I know enough to say whether I agree with the noble Lord, Lord Williamson, that this is a love fest—or to disagree with him in the way that my noble friend Lord Borrie chose to do—but it must come fairly close to it. I thank all noble Lords who have participated in the debate with a special emphasis and a special conviction. It is clear that the Bill attracts broad cross-party support and that all who have spoken believe that it will provide the robust law that our prosecuting authorities and courts require and will considerably enhance this country’s standing in the international arena. The noble and learned Lord, Lord Mayhew, almost apologised not only for his cough—which I have, too—but for his grouse at the beginning of his speech; he said it was a minor grouse. However, it was a well-made point about the challenging, as we described it—he had another word for it—timetable that the Joint Committee had to face. Two points can be made about that: first, that it makes the conclusions of the Joint Committee even more impressive; and, secondly, that without the timetable it might not have proved possible to bring the Bill before the House and, it is to be hoped, into law during this truncated Session. The Joint Committee’s work on the Bill is as good an advertisement for pre-legislative scrutiny as there has been so far. Once again, the Government thank the noble Viscount and his team for what they did. We have listened this afternoon to the many substantial points that have been made and I assure the House that we will consider them with care and do our best in Committee to answer them where we feel it right and to concede to them where we feel it right as well. Let me answer one or two of them this afternoon. The noble Viscount talked about Scotland. I agree that it is very good news that the Bill will extend to Scotland and I am pleased to say that we have reached agreement on this with the Scottish Government, subject, of course, to the Scottish Parliament publishing the necessary legislative consent Motion, usually named after my noble friend Lord Sewel. As with the Crown dependencies, it will be for them to update the law in the normal way. We are in regular discussions with them; I am the Minister at the Ministry of Justice with that portfolio and I will advise the House in due course on the progress being made with those discussions. Turning to the complexity of definitions, the noble and learned Lord, Lord Lyell, argued that the general bribery offences in Clauses 1 to 5 were too complex. It is true that, superficially, bribery may be regarded as a straightforward concept, but for the purposes of the criminal law, drafting an offence which is wide in scope at the same time as being readily understood and legally certain is a challenge. There has been other support, from the noble Lord, Lord Williamson, and other noble Lords including the noble Viscount himself, who argued for abandoning the inherently difficult and vague concepts of agent/principal and acting corruptly, found in the existing legislation, and adopting the offence as recommended by the Law Commission. The Law Commission consulted widely on this and possible alternatives and concluded that the improper conduct test was the best possible option and the Joint Committee endorsed that approach. We hope that we have adopted a careful balance between simplicity, certainty and effectiveness. On facilitation payments, the noble and learned Lord, Lord Mackay, and the noble Lord, Lord Williamson, questioned whether such facilitation payments would be caught by the offences in the Bill. It has also been suggested that criminalising facilitation payments could put UK businesses at a disadvantage compared to their US counterparts, given the Foreign Corrupt Practices Act in the US. Facilitation payments are already caught by the offences contained in the current law and the Bill does not seek to change that position. We are adamant that our objective must be to address bribery in all its forms. We are not unaware of how the real world works, but we believe that tackling petty bribery in itself is a key element in changing the culture of corruption. In the UK, as at present, prosecution will depend on whether the evidential and public interest tests in the code for Crown prosecutors have been satisfied. That code does reflect the principle of proportionality—it may not be in the public interest to prosecute where payments are small; much will depend on the particular circumstances. However, those who continue the practice of making such payments have to be aware of the continuing risk of prosecution. Providing exemptions for facilitation payments, as the US does, is not a universally accepted practice. Such exemptions do create artificial distinctions that are difficult to enforce and have the potential to be abused. Indeed, the OECD, much mentioned in the debate, is today launching a recommendation on this very issue. It highlights the corrosive effect of small facilitation payments and recommends member countries undertake periodically to review their policies on small facilitation payments to combat the phenomenon and to encourage companies to prohibit their use. We do not apologise, then, for the tough stance that we are taking in the Bill, but we very much take the points that have been made in the debate. There is of course an issue around the position of the Attorney-General and her role in bribery prosecutions, and different views on that issue are seriously held around the House. I would point out that the prior consent of the appropriate authority before proceedings can commence is only required where it is essential to enable a consistent approach to be taken to decisions to prosecute. I remind the House that, in 2003, the Joint Committee found the consent of the Attorney-General was not required for these purposes. We think that a requirement of the consent of the director of the relevant prosecuting authority achieves the right balance on bribery, but I emphasise that that does not affect the superintending role of the Attorney-General over the main prosecuting authorities. I turn to Clause 7, and the issues around adequate procedures and guidance. A number of noble Lords discussed that issue, including the noble Lords, Lord Goodhart and Lord Williamson, the noble and learned Lord, Lord Woolf, and the noble Viscount, Lord Colville. That adequate procedures defence is designed to be flexible. It is not defined in the Bill, as specific procedures will depend on the size of the organisation, the relevant business sector and the degree to which the organisation is engaged in high-risk markets. The House will appreciate that what is appropriate in a large organisation to prevent bribery may not be appropriate in a smaller organisation, so the procedures should, we think, therefore be proportionate to the circumstances of the particular organisation. We intend to publish guidance that draws on the knowledge and expertise of stakeholders. We intend it to cover the Clause 7 offence, particularly the adequate procedures defence. However, the guidance will not set out detailed prescriptive standards; rather, we intend it to be indicative by setting out broad principles and illustrative good practice examples of adequate procedures. We also intend the guidance to be available well in advance—there, I have used that phrase again—of the implementation of new offences. The CBI, in its briefing to noble Lords, said that it welcomed the defence of having adequate procedures in place to prevent bribery, and broadly supported that approach. On what constitutes adequate procedures, it welcomed the fact that the Government have agreed that official or non-statutory guidance must be provided, containing broad principles and illustrative best practices. It said that it was also welcome that there appears to be recognition that different sectors operate in different contexts, and that such non-statutory guidance will be produced after the Bill has received Royal Assent but before the offences come into force. The Government are pleased that the Confederation of British Industry has that view of that issue. There has been a suggestion—the noble Lord, Lord Thomas of Gresford, spoke on this—that a central advice facility, similar to that provided by the United States and Hong Kong, might be beneficial here. The Joint Committee obviously thought about that a lot, and heard evidence on it. It recognised that such an advisory service could be beneficial, but in the end noted that there might be difficulties in establishing such a service in this country, and was concerned about the impact on the independence of prosecutors in particular. We agree with it on that issue and do not think it appropriate for our criminal justice system. Having said all that, the director of the Serious Fraud Office has indicated that there would be occasions when his office would discuss points of general principle with companies, under what is described as its policy of engagement, including those on proposed mergers. However, he drew a clear line at providing a formal advisory service. The noble and learned Lord, Lord Lyell, mentioned Article 45 of the EU procurement directive. He asked whether conviction for the Clause 7 offence would trigger mandatory exclusion from participation in a public contract under that article. The article provides that any candidate or tenderer who has been convicted of certain offences, including fraud and corruption, ""shall be excluded from participation in a public contract"," and a discretionary approach shall apply for all other offences. We believe that being convicted of a Clause 1 or a Clause 6 offence will trigger the mandatory exclusion, as those offences will fall within the ambit of the directive. It would be appropriate for mandatory exclusion to follow, given the complicity on the part of those who manage the organisation and company. I tell the House, and the noble and learned Lord in particular, that we are presently considering whether a conviction for the Clause 7 offence would fall within the ambit of the directive. In such cases, the culpable conduct on the part of the organisation is not bribery in itself but rather a failure to prevent bribery. I hope and expect to have a definitive answer to the noble and learned Lord’s excellent question on this issue by the time we have reached Clause 7 in committee.