Bribery Bill [HL]

My Lords, Amendment 9, tabled by the noble Lord, Lord Henley, seeks to address circumstances in which a bribe was paid by a contractor or a fellow member of a consortium and the bribe payer is not under the control of the defendant. It would allow a defence to the Clause 7 failure to prevent bribery offence where a commercial organisation could prove that it diligently investigated the contractor or consortium partner and conducted a reasonable anti-bribery audit during the time the bribe payer was associated with the commercial organisation, or that it had used all reasonable influence to prevent bribery. The organisation would not be guilty even though the bribe was paid to obtain or to retain business or an advantage in the conduct of business for that organisation. I know that some noble Lords, along with organisations such as the International Chamber of Commerce, have concerns about the application of the Clause 7 offence to corporate structures, such as joint ventures, where there is little or no direct control by the commercial organisation of their operations. Our purpose is clear; we want to encourage organisations involved in joint ventures to ensure that they are satisfied that adequate procedures are built into the arrangements for the joint venture. The same can be said of any other business model. Given this overarching objective, I am not persuaded that a separate defence is necessary or desirable. The Clause 7 offence applies whenever a person performing services for a commercial organisation bribes another to obtain or to retain business for that organisation. Where that connection cannot be made, the organisation will not be guilty. However, where the organisation can benefit from a bribe that is ostensibly paid on its behalf, liability will be determined by the procedures that the organisation took to prevent such bribes from occurring. It is for the courts to determine whether a person was performing services for the organisation in question based on all the circumstances. Consideration of liability will then rest on whether the commercial organisation had adequate procedures in place to prevent bribery. The formulation of the defence under Clause 7 is broad enough to cater for different corporate structures: including contractors, consortia and joint ventures. The Government are also committed to publishing guidance on the meaning of adequate procedures well before the offence is brought into force. We are considering what guidance may be appropriate in respect of different corporate structures. This is not a one-size-fits-all approach. The procedures should be appropriate to the circumstances of the enterprise. This issue was considered by the Joint Committee, which examined the draft Bill. The committee considered a number of suggested amendments to the draft Bill that sought to limit the offence to cases in which the commercial organisation controls the subsidiary or joint venture. The committee noted, however, that the same end could be achieved through suitable guidance. Introducing separate conditions in respect of preventing bribery by contractors, members of consortia or joint ventures will, we believe, add little of substance and risk creating confusion and uncertainty in the application of the law. That said, the Joint Committee also noted that a parent company’s liability for a subsidiary is one of the issues being considered by the Law Commission as part of its general review of corporate criminal liability. The Law Commission is due to publish a consultation as part of its review this coming summer. We will have to see where the commission comes out on this issue. It may or may not address it head on, but we submit that the proper course is to await the Law Commission’s consultation. Amendment 15 arguably seeks to address broadly the same issue but adopts a different approach. It would generalise the factors that a court would take into account when considering whether person A was performing services for commercial organisation C for the purposes of the offence in Clause 7. A person may be performing services for an organisation for the purposes of Clause 7 even though there is no formal relationship between them. This may be the case, for example, where the person is representing a number of organisations in a joint venture and has a formal relationship with the lead organisation but not with the commercial organisation charged with the Clause 7 offence. We believe that the words that the amendment seeks to remove are necessary and desirable as they signal to the courts, and indeed to organisations which the offence is intended to cover, that an organisation may be liable in circumstances where there is no formal relationship between A and C. As the clause makes clear, whether A is performing a service on behalf of C will be determined by taking account of all relevant circumstances. This includes, but is not necessarily limited to, the nature of the relationship. There are of course an infinite variety of ways in which A performs services on behalf of C, so it is right for a jury to take a view on the particular circumstances of the case. Taking the generality of the concern expressed by the noble Lord, Lord Henley, I think that we will be seeking to help industry in this area not by varying the Bill or making special provision for consortia but by taking account of them in the guidance that we will be producing. Therefore, I invite the noble Lord, Lord Henley, to withdraw his amendment.