Bribery Bill [HL]

My Lords, I will speak also to Amendment 15. Amendment 9 also deals with Clause 7, which, as we have established, creates an offence of failure by a commercial organisation C to prevent a mischief done by a person A who is associated with that organisation. What I seek to explore with Amendments 9 and 15 is the nature of that association. Amendment 15 is the simpler of the two. It would simply make the determination of whether A was performing services for C subject to reference to all the relevant circumstances. Amendment 9 is more specific in extending the defence in subsection (2) to situations where C did their best to stop A, where A is a contractor or a fellow member of a consortium. I seek to tease out from the Minister how close a relationship there must be between C and A for the offence and defence to apply, and what circumstances may be considered to determine that. I raise the subject of consortia for good reasons. Much international business in the petroleum, mineral, banking, financial and construction industries is conducted through consortia or contractors who have sole or overall responsibility for a project. The relationship with the other entities is not one of control, but regulated by contract only. In many cases, the partners may be state entities. A UK company, especially in one of the extractive industries, may have no choice but to take a state entity as a partner. It can investigate potential partners and then monitor them for bribery, using contractual provisions or by exercising its maximum influence. The latter is regarded as acceptable in United States practice, and that may be the maximum extent of the control of its fellow consortium member that the UK company would be able to exercise. Would the provisions in the Bill be sensitive enough to deal with such situations? If they are not, there is a risk that the Bill could put UK businesses at a distinct disadvantage. The United States recognises, especially in the audit provisions, the importance of the degree of control when deciding the responsibility of the company for bribery by associates. The Bill makes no such allowance, the sole criterion being whether services are being performed. There is no doubt that partners in the industries mentioned mutually perform services. Accordingly, in certain regions and in respect of certain resources, a UK company would have no choice but to abstain from participation. The cost to the United Kingdom could be considerable. It would rise to an even greater magnitude if UK companies had to withdraw from existing groups because of the potential impact of the Bill. In any event, the place that might have been available for UK enterprise would quickly be filled by companies from other jurisdictions. I hope that the Government have foreseen these possible consequences. If they have, I hope that the Minister will be able to point to the flexibility in the Bill that is necessary to avoid them. I beg to move.