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Bribery Bill [HL]

My Lords, I shall speak also to Amendments 7, 8, 9 and 11. We have now reached Clause 7, which requires that businesses must have procedures in place so that their employees and agents do not commit bribery. We welcome that, as do most if not all businesses. It is right that businesses should play an active role in combating bribery and that companies should not turn a blind eye to corrupt practices. We seek a further explanation of the way in which companies will be held to account. Amendment 6 would remove the strict liability of the offence in Clause 7 and instead return to the test of negligence, which appeared in the draft legislation some time ago, if noble Lords can remember as far back as that. Amendment 6 is similar to Clause 5(1) of the draft Bill. I am aware that the opinion of the Joint Committee was in favour of the strict liability test, and I have returned to it as one of the options that may address the concerns that many in the business world have about Clause 7. Other options are contained in Amendments 7, 8, 9 and 11, to which I will also speak. Amendment 6 would penalise companies if they have been negligent. Such an approach would require active monitoring of the companies’ dealings, but would not necessarily lead to corporate conviction in the event that an employee or agent committed the offence of bribery. Under the Bill, as presently drafted, the company would automatically be guilty of an offence unless it could raise a defence. I shall deal more with that defence in a moment, but I shall concentrate first on the mechanism of using the defence. Currently, the burden of proof lies with the company: it must raise its defence and prove it. In most circumstances, the defendant need merely raise the defence and it is the prosecution’s job to disprove it. Amendment 8 is intended to reverse the burden of proof on to the prosecution. I should be grateful for an explanation why the Government feel that a reverse burden of proof is suitable in this case. Amendment 9 returns to a previous debate on the meaning in subsection (2) of "adequate procedures". It would replace that phrase with "reasonable procedures". Amendments 7 and 11 cover similar ground, which is the relationship that a company has with its associated person—who commits the bribery—and the degree of control over the associate, in particular whether adequate procedures can take into account a reasonably distant relationship. The Minister will know that businesses are uneasy with Clause 7, and it is largely for that reason that he conceded that guidance must be necessary, which we shall debate shortly. However, even if detailed guidance is produced, the structure of Clause 7 still merits debate. I still have concerns that I expressed in Committee that "adequate" is not perhaps the best word to use in subsection (2), which provides for the corporate defence of having adequate procedures in place. The word "prevent" is used in that subsection. It may be possible, on a narrow reading of the Bill, that if bribery had been proven to have occurred, the procedure could not have been adequate and therefore the defence must fail. I am sure that a narrow reading of that subsection is not what the Government intended and an explanation of why "reasonable"—a word well understood by the courts—is not employed would be welcome. Courts understand the concept of reasonableness, as do companies. The addition of the phrase "in all the circumstances" in Amendment 7 allows for account to be taken of the different dynamics that relate to sector, size of company and risks associated with markets. That may help to address the concerns over the offence being fair and proportionate both for large companies and small and medium-sized enterprises. It would also see that due regard is paid to the facts and circumstances surrounding the relevant bribery offence referred to in subsection (1). In addition, I suggest that Amendments 7 and 11 may go some way towards addressing the fact that the Bill does not take due account of, nor can it properly cope with, the reality of the variety of corporate structures—something that the Minister will understand. That is particularly the case with joint ventures in all their forms—project work, construction, the extractive industry and the financial sector—where control and influence in those arrangements may vary considerably. It cannot be right that a business finds itself criminally liable where it has little, limited or no ability to influence or control its partners. That is not to say that United Kingdom businesses fail to exercise the influence that they can within the constructs of their contractual or business relations. I am aware that the CBI, among others, is extremely concerned that failure to realise and act on those concerns will have a serious detrimental effect on United Kingdom competitiveness, not just in terms of existing arrangements but of potential future business. I accept that the Government’s concession that guidance is necessary will do much to allay our concerns about Clause 7. However, we have yet to see the guidance. It is unlikely that we will see it before the Bill leaves your Lordships' House—only next Tuesday, as I remember. Until we know what the Government are thinking of for that guidance, we need to ask them to consider the points that I have raised about the drafting of Clause 7 and how it is intended to operate, and to offer some reassurance that the Minister and his officials have carefully thought through all the ramifications. I beg to move.