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Bribery Bill [HL]

My Lords, earlier in one’s life one says: "Unaccustomed as I am to public speaking". On this matter, I have to say: unaccustomed as I am to speaking on behalf of the Government, with so much support from the Back Benches, I feel that many of the points on the generality have been very well made. Perhaps I may first touch on the generality. I am not sure whether it was in Grand Committee or in a private briefing, but the noble Lord, Lord Williamson, made a point which goes to the root of this matter. This is a brave Bill. It is about being black and white. The Government stand by the fact that a facilitation payment is a bribe. That is what the Bill states and nothing that I will say can undo that. I shall say lots and lots about the amendment and prosecutorial discretion. Such discretion will be used to manage this in the real world, and I shall read words which try to amplify how that will apply. I shall also touch upon the issue of the tip or gratuity. The Bill is in line with our treaty obligations and so on, but they move and are hardly that precise. We are doing this because we think that it is the right way to tackle bribery in international trade. We are tackling it quite openly in that way. I thank the noble Lord, Lord Henley, for putting down the amendment because, although obviously I shall criticise it, it has facilitated this useful debate and allows the Government to make their position on this matter unambiguous. I shall now make my formal speech, which is important to put on the record for the consideration of those to whom these laws will apply. I shall assure the House that the guidance that we have promised will include reference to facilitation payments. The new clause proposed by the noble Lord, Lord Henley, seeks to create an exception for small-scale bribes paid to expedite action on the part of government officials or to prevent damage to an important commercial interest. The drafting of this proposed new clause serves only to underscore the undesirability of creating an exemption for facilitation payments. Under the proposed new clause, the defence would appear, for example, to relate to bribes paid to expedite routine actions on the part of foreign and domestic officials. It also uses terms such as "modest in amount", "customary in the situation" and, ""the only reasonable option in the circumstances"." These phrases are ambiguous and would invite endless legal argument. The amendment would have a seriously detrimental impact on the effectiveness of the Bill in combating bribery at all levels. One key objective of the Bill is to contribute in a meaningful way to efforts at national and international level to bring about a change in culture away from bribery, which is so corrosive, particularly in developing economies. We recognise that many UK companies still struggle with petty corruption in emerging markets and other countries, facing regular demands for "facilitation payments" in circumstances that amount to extortion or something very near. The answer is to face the challenge head-on, not to create exemptions and defences like those of the United States’ Foreign Corrupt Practices Act, which created artificial distinctions that are difficult to enforce and which have the potential to be abused. In recognition of the need to reinvigorate efforts to combat facilitation payments, the OECD has recently issued a recommendation calling on member countries periodically to review their policies and approach to these small payments. Under the Bill, a payment, no matter how small, made to a foreign public official in order to facilitate the performance of that public official’s function, and in order to secure an advantage in the conduct of business, will be a criminal offence unless the local written law permits the official to be influenced by the payment. The message needs to be clear and unambiguous: bribery, in whatever form and whatever the size of the payment, is a crime. The House will be aware that all prosecutions in the UK are subject to review by independent prosecutors under the principles set out in the Code for Crown Prosecutors. Should a case involving a payment of this kind come to the attention of prosecutors, it will be subject to a review by a Crown prosecutor, who will apply both the evidential and the public interest tests. It will be typically the Crown Prosecution Service rather than the Serious Fraud Office that will review such a case, because the Serious Fraud Office operates a £1 million case threshold. If in a review of a case the evidential test is satisfied, the prosecutor is duty bound to consider the public interest in prosecuting. As with all serious crimes, the general public interest in ensuring that bribery is effectively dealt with is a relevant factor, but prosecutors will also take into consideration countervailing factors. These might include the small nature of the bribe, the options facing the payer, whether it was a single or repeated incident, whether the bribe was solicited in circumstances that were tantamount to extortion and whether the court is likely to impose a nominal penalty. There may be good reasons why it may not be in the public interest to prosecute in particular circumstances, although I stress that this is a matter for the independent prosecutors and I cannot give any assurances in this regard. The point is that it is far better to keep the message of illegality clear and allow individual cases to be determined on the basis of a broad prosecutorial discretion than to put in place exemptions that at best create additional ambiguity and complexity and at worst undermine the general policy objectives of the Bill. The new clause amply illustrates the difficulties that one faces when attempting to craft an exemption of this kind. Each of paragraphs (a) to (e) would introduce an element of doubt and uncertainty. What, for example, would "an important commercial interest" cover? A relatively large payment may be "modest" in the context of a commercial interest of high value. How would the importance of the interest be assessed? Would it be a snapshot of the importance at the time of the bribe or could long-term implications be taken into account? As regards "customary in the situation", our policy, as enshrined in Clause 5(2), is to exclude local custom from the assessment of impropriety for the purposes of Clauses 1 and 2. The extent to which a practice is customary should have no place in a Bill seeking to change the culture away from bribery. Finally, the extent to which a payment may be "reasonable" would, without further definition, be open to entirely subjective interpretation. The overall effect of the proposed defence could be to create a potentially wide exemption that would be vulnerable to unmeritorious exploitation. I was asked the extent to which a tip may be looked on as a bribe. A gratuity is not a bribe; it is usually paid as thanks for the proper performance of functions. Conversely, a bribe is paid in anticipation of, or in reward for, improper performance of functions. The foreign public official offence requires that a payment is made with the intention to influence an official and to obtain business or a business advantage. Therefore, payment made to an official after the fact, intended to express thanks for the performance of his functions, may not give rise to liability under this clause if the required intent is not present. I turn to the factors that would influence the decision. I do not propose to rehearse the whole of the guidance in the Code for Crown Prosecutors but the commission of a serious offence that would, on conviction, attract a long term of imprisonment would, all things being equal, suggest very clearly that the public interest lay in prosecuting. On the other hand, factors such as the likelihood of a minor penalty would weigh in favour of discontinuance. Another relevant factor might be the cost to the public purse of prosecution. By way of illustration, a case of bribery overseas involving a small facilitation payment might involve considerable investigation and co-operation with the authorities of a foreign state in order to secure a conviction that would attract a minor financial penalty or conditional discharge. In such circumstances, one could understand that the making of a small "facilitation payment", extorted in return for the performance of an administrative function by an official in a foreign country, might not give rise to sufficient public interest in a prosecution. Another relevant factor might be where facilitation payments had been paid in response to a physical threat to the health and safety of a company’s employees. While a threat of commercial damage does not provide a defence in cases of bribery, the prosecuting authorities are likely to take into account any element of extortion when considering where the public interest lies. With those statements, I hope that the noble Lord will feel able to withdraw his amendment.