Rolls-Royce last week agreed to pay hundreds of millions of pounds to the Serious Fraud Office (SFO), the US justice department and Brazilian regulators after a four-year investigation into bribery and corruption.
The engineering company will pay the SFO £497.3 million, around £141 million to the US justice department and £21.5 million to regulators in Brazil after confessing to 12 counts of “conspiracy to corrupt, false accounting and failure to prevent bribery”.
Further bribery resources
The acts took place over a period of more than 25 years, and included: offering top-of-the-range Rolls-Royce cars to an intermediary who was “showing favour” in respect of a potential aeroplane engine contract; paying for employees of an airline to attend an MBA course; and treating some potential clients to “four-star accommodation and lavish extra-curricular activities”.
The payment to the UK’s SFO is only the third deferred prosecution agreement (DPA) since these agreements were introduced in 2014. These allow companies to pay huge penalties rather than face prosecution, providing they confess to crimes of fraud or bribery.
David Green, director of the SFO, said: “I welcome this DPA, a significant enforcement action by the SFO, using relatively new statutory powers in respect of an important British company.”
“It allows Rolls-Royce to draw a line under conduct spanning seven countries, three decades and three sectors of its business.”
With ever-increasing scrutiny around corporate governance and practices, what measures should employers take to ensure they don’t fall foul of anti-bribery legislation?
1. Start as you mean to go on
A robust anti-bribery statement and accompanying policy sets the tone for employees to be transparent around any gifts or incentives they may receive from clients or associates. It should set out procedures in accordance with the key legislation in this area, the Bribery Act 2010, and could be included in your staff handbook and/or staff intranet.
Your anti-bribery statement could also be sent to third parties in your supply chain, demonstrating a zero-tolerance approach to fraudulent activities.
Make it clear what form a bribe might take, and how accepting a bribe could become grounds for gross misconduct or immediate dismissal. Emphasise that bribery is a criminal offence that may result in up to 10 years’ imprisonment or a substantial, unlimited fine for their employer.
2. Encourage employees to speak up
Immediately reporting any suspicion of foul play could influence the outcome of any investigation into bribery at an organisation, so make it clear to employees that they should not delay in sharing this information.
In the case of Blake v Home Office, the dismissal of an immigration officer for taking a bribe from an offender was held to be fair, despite the employee’s previous honest record and the fact she returned the money (£200). She eventually reported the bribe but, after an investigation and disciplinary hearings, was dismissed.
When she made a claim for unfair dismissal, the tribunal concluded that her employer had acted reasonably and her conduct was serious enough to warrant her sacking and that she had acted contrary to the organisation’s policy prohibiting taking bribes.
3. Conduct a risk assessment
Companies have a duty to report any instances of bribery to the SFO, and failure to do so could lead to prosecution. When investigating any allegations, the authorities will look into whether or not an employer has effectively implemented its anti-bribery policy and taken adequate precautions to protect itself against risk.
Conducting a risk assessment can help your organisation to determine the nature and extent of any exposure to any internal or external bribery risks, and this should be done periodically.
A risk assessment should include questions on the organisation’s exposure in its country, in its sector, any relationships it has with other companies or individuals, as well as factors such as how well communicated its anti-bribery policy has been in the workplace.
4. Clarify what employees can and cannot do
The investigation by the SFO discovered that some of the bribes involved in Rolls-Royce’s dealings over the years had included luxury accommodation and a Silver Spirit car. While any gifts or enticements your employees might be offered might not be on the same scale, it is worth clarifying what counts as a bribe and what does not.
Hospitality and entertainment can potentially constitute bribery under the Bribery Act 2010, but as long as it is “reasonable and proportionate”, this should not pose a risk. The Government has issued guidance for organisations on preventing bribery that details this further.
The employer should consider the motive of the party offering the gift when deciding whether or not to accept it – any suggestion they are trying to influence the impartiality of the receiver could be cause for concern. It may also be worth drafting a policy on hospitality and gifts to ensure that employees are aware of how to deal with such offers.