The dying days of this parliament have seen the passing of a landmark new law to fight corruption. Yesterday the Bribery Act received Royal Assent during the so called pre-election “wash up” where the parties decide which bills will survive and which will fall. This ends a decade of thwarted attempts to reform our outdated bribery laws.
This is good news for the developing world. We know that bribery and corruption can have a devastating impact on poor countries. The U4 Anti-Corruption Resource Centre has estimated that 25 percent of African states’ GDP is lost to corruption each year.
There is growing evidence to show that corrupt practices, including bribery, stunt economic growth in developing countries, discourage foreign investment, prohibit access to vital public services and undermine effective governance.
The World Bank has estimated that $1 trillion is paid annually in bribes, adding 10 per cent to the cost of doing business in some countries. While the majority of British firms are not involved in corrupt practices, we know that some UK companies have used bribery to win business overseas.
The problem is that our existing laws are ineffective and antiquated, dating from 1889, 1906 and 1916. This has made if difficult to secure prosecutions for bribery offences to date.
In recent years the UK has come under increasing criticism by the OECD for failing to bring UK laws into line with our international obligations. This was compounded by the actions of the government to prevent the investigation into BAE Systems and the Al Yamamah military contract.
Over the past six months CAFOD and other NGOs have been monitoring the progress of the Bribery Bill and pushing MPs to ensure that we get the strongest possible law.
The new Act creates two new general criminal offences for bribery, a separate offence of bribing a foreign public official and – importantly – a new offence which would make companies liable for foreign bribery.
The key to the strength of the new Act is its extra-territorial application: the new offences apply to acts of bribery by UK citizens or UK registered companies that take place anywhere in the world. It also applies to acts committed by the subsidiary of a UK company or agents acting on a company’s behalf. This is important because it prevents companies from using subsidiaries or agents to pay bribes.
It is now critical that this new Act is implemented as soon as possible.
CAFOD hopes that the party which forms the next government will show a high-level commitment to stamping out bribery and corruption. Ensuring that there are sufficient resources available to enforce the new Act, including funding for the Serious Fraud Office and City of London Police to carry out investigations, will be crucial if the new legislation is to have teeth.