Joint Committee on The Draft Corruption Bill Minutes of Evidence

Examination of Witnesses (Questions 720-739)


11 JUNE 2003

  Q720  Lord Campbell-Savours: Mr Cridland, what would your view be on the question of policy on that issue of transparency? Small facilitation payments and the possibility of a greater regime of transparency in relation to particular contracts.

  Mr Cridland: We are trying to build a construct here derived from practical experience of our member companies. So, the experience that Andrew described is very relevant here. On that basis, we are fully supportive of disclosure because clearly, every time one of these payments becomes an issue, the questions that other members of the Committee have raised are an issue for the relevant management as to which side of the line it falls. Therefore, there should never be a case where this is simply dealt with with some cover-all excuse that it is a facilitation payment. The procedure Andrew describes is right.

  Q721  Lord Campbell-Savours: I thought he was talking about this statement made by the Chairman.

  Mr Cridland: The chief executive of the relevant business unit, the signing off. There is usually a cascade system of signature saying, "In the area for which I have responsibility, I have checked what has been done and there is no bribery."

  Q722  Lord Campbell-Savours: My question is more specific to particular contracts. Is there room there for transparency?

  Mr Cridland: Are you meaning public disclosure, disclosure outside the business?

  Q723  Lord Campbell-Savours: Yes, public disclosure.

  Mr Cridland: I think we would be prepared and happy to consider that. I think clearly it raises a lot of issues of proportionality. If we achieve the objective that we are seeking and we are talking about a £100 or a £50 payment, then actually the appropriate place for that to be dealt with is within the business unit. Where it cascades upwards is if it influenced the size and nature of the contract as a whole, then there would be a case for public disclosure. At that point, to be honest, I think we would be back to the fact that the outside of the remit are the sort of things that we consider as facilitation payments. There is no objective in raising this issue and I agree with Andrew in the sense that because of the way in which the conversation has flowed, it has developed an importance which is out of proportion to the position it has in our evidence. There is no wish here by the CBI to use this to drive a "coach and horses" through a position which is that corruption is abhorrent and corporations should have management practices that ensure that their operatives fall within the law.

  Q724  Lord Campbell-Savours: However, you have sought an exemption.

  Mr Cridland: We have sought an exemption. We seek a ministerial reassurance that criminality will not be applied to matters of this kind on a de minimis basis.

  Q725  Chairman: It is one thing for management to have to decide whether something is an acceptable facilitation payment is good business, good management. It is a different problem when the jury has to decide whether a facilitation payment is in fact corrupt.

  Mr Cridland: Yes.

  Q726  Chairman: That is a very different sort of question because the act has to cover both.

  Mr Cridland: Indeed, forgive me, and that is why we believe that this matter needs explicit coverage in one way or another in statute or the process of statute.

  Q727  Lord Carlisle of Bucklow: In your paper, you argued very persuasively for the fact that there should be exemptions not only for facilitation payments but also for corporate hospitality, for promotional functions and for offset payments. Yet, when we look at the individual ones, for example, we have looked at the question of facilitation payments, I think you will agree that one immediately runs into definition difficulties in defining what is a facilitation payment. If instead we took the other view which you commend and put the word "improper" before the word "advantage", would that not cover all the things you are concerned about and do you actually think yourselves that either a prosecutor, a juror or a businessman would have any difficulty in understanding what the word "improper" meant?

  Mr Cridland: We believe that using the word "improper" would considerably strengthen the Bill and considerably aid in its understanding particularly in the lay community. I think we go beyond that to say that some of the specific matters need dealing with more clearly than have been dealt with to date. We leave it to yourselves to design a way in which to do that.

  Q728  Chairman: You said that your task is to solve the problem. Do not feel reluctant to suggest definitions in drafting if you have ideas in your mind. We should be only too glad to hear them.

  Mr Cridland: I am trying to give perhaps too clever an answer and say that we would like our cake and eat it. We would like "improper" and we would also like some of these matters clarified either by exemption or by ministerial statement.

  Q729  Lord Carlisle of Bucklow: But Mr Berkeley himself said that there would be difficulty writing into a Bill a quantitative test.

  Mr Cridland: We are not saying that.

  Q730  Lord Carlisle of Bucklow: I have faith enough in juries to believe that, if you ask a jury a question, "Was that payment improper?" they will know what is meant by that. They will know whether it was improper when it was £100,000 as against £50. I just wondered whether in fact that sort of approach would meet many of your problems under this Bill.

  Mr Cridland: It would certainly go a long way. I think that we would need to consult further as to whether our member organisations felt that the Bill that might result from your deliberations better satisfied them. At the moment, I have to say that there is a relatively high level of concern about the inadequacies of the Bill and therefore we are seeking to build in as much reassurance and confidence building as we can. We would be very happy to present a slightly different Bill to the membership and see if it passes their test of clarity and certainty.

  Chairman: Just before you come on to another matter, Mr Stinchcombe, do you want to pursue anything else? I know that you wanted to pick up on this point.

  Q731  Mr Stinchcombe: Very interestingly, you have used the word "improper" as part of the inflection of the meaning of the words "corruption" and "corruptly". You previously, in answer to questions by my colleague Vera Baird, looked at the intention of the person who might be making the payment or doing the act. How do you actually define the word "corruption"? Does it, to you, import always an element of dishonesty?

  Mr Berkeley: Perhaps this is a major doubt about the Bill. It seems to us that the Bill at the moment does not have this element of requirement for dishonesty. In fact, in the Home Office's commentary, I think it says specifically that dishonesty is not a necessary ingredient of the offence. We feel that, as regards the industry, managers, people working, the ordinary person and the ordinary businessman, if it were made clear that it is dishonesty and that dishonesty is part of the thing, this would be a much more powerful tool than the rather abstract scheme which exists at the moment.

  Q732  Mr Stinchcombe: You wish to see some specific reference to the moral wrongness of the act as part of a defining element of the offences?

  Mr Berkeley: Precisely.

  Q733  Mr Stinchcombe: And it would not worry you that the word used, whether it be dishonest, wrong or whatever, might have around it some blurred—?

  Mr Berkeley: We have suggested "improper" merely because that is used in the OECD Convention and we have also mentioned "undue" because that is used in the Council of Europe Convention.

  Q734  Chairman: Is the objective in a corruption case to tackle what is immoral or what is illegal?

  Mr Berkeley: What one is saying is that it would be more effective if the wording of the Bill, while of course being legally adequate, nevertheless mentioned something like "undue", "improper", or some note of moral condemnation.

  Q735  Lord Carlisle of Bucklow: This Bill, as drafted, allows the defence that a person cannot be guilty of corruption if his principal consents to what he has done. Are you happy with that as a defence or not?

  Mr Campkin: Yes, I think that on balance we are.

  Chairman: We have three different offences: 1 and 2 which fall together, and Clause 3 of the Bill is a different sort of offence.

  Q736  Mr Stinchcombe: You criticise the Clause 3 offence in paragraph 17 of your evidence, saying that it seems to make an act criminal before even an advantage might be being conferred and merely because of the hope that it might be conferred. I wonder if I might tease out from you exactly what your objections are. The Clause 3 offence is further clarified by Clause 10. You have to take the two together rather than in isolation. Taken together, it seemed to be targeting those acts whereby somebody dishonestly performs their functions, for example as an agent, in the expectation that some corrupt advantage will be conferred at a later stage—whether it be a ticket to Wimbledon or whatever. If it is the moral wrongness of the act, the breach of the duty, with which we are concerned, I wonder why you say that should not be criminalised. I wonder further whether it is not criminalised in any event as being an attempted offence of corruption.

  Mr Cridland: Perhaps I may just make a general statement about that and ask Andrew to give a more legal perspective. The concern of our member companies on Clause 3 derives from the way that, over the last several years, they have been trying to evolve sensible policies which have statements of clear intent: "We will not accept any bribery or corruption in this business. It is a sackable offence", down to, "Living with the world as it really is, dealing with some very tough and dubious situations and borderline issues". The concern of many of our member companies is that, because Clause 3 talks about "in hope", it is very difficult to apply management policies and practices to it; that it will lead to endless debate within the business; that there is too much ambiguity. That is the concern. If a way can be found in which Clause 3 can be tightened up to reduce the ambiguity, I do not think that it is the CBI's wish or intent to seek to invalidate the clause.

  Mr Berkeley: If I may say so, perhaps you suggested the answer to the question yourself at the end of the question. You said, "Would it not be an attempt?". Our point is that Section 2 is probably enough, if you also bring in the notion of an attempt under Section 2. We therefore question the necessity for Clause 3. To go back to a more practical illustration, supposing that, in a company that is trying to do a negotiation with another company to have something done, the executive of this company comes back to the office one day and says, "Do you know, I think Jimmy—whatever-his-name-is from that other company—is after something. He's after a bribe, I think". Nevertheless, we do need this equipment. Should I, for that reason, break off negotiations—although the company actually needs to do the deal? How is management, in the face of that, to deal with the situation? Is it going to say, "Go on with it"? He may be after a bribe, and that is an offence. Then the man from our company says, "But that would make me some sort of accessory to an offence under Clause 3". We think that (a) it is not necessary and (b) it is very difficult to manage.

  Q737  Mr Stinchcombe: I think that the answer the draftsman of the bill would give to the latter point is that he has not used the word "hope", but he does invite the jury in due course to come to a conclusion as to what was the primary purpose of the ultimate act. Does that reassure you?

  Mr Berkeley: The word "hope" was used both by the Law Commission in its analysis which led to this clause and I think—I may be wrong—that it is also included in the explanatory memorandum which is attached to the Bill.

  Q738  Mr Stinchcombe: But it is not actually in the words of the legislation itself, is it?

  Mr Berkeley: No, it is not actually in the words of the legislation itself. If it were, it would be the first time one of the three Christian virtues of faith, hope and charity was made a necessary ingredient in a criminal offence!

  Q739  Mr Stinchcombe: And those words that make you look to the primary purpose of the act or omission in question do not reassure you?

  Mr Berkeley: I must be frank and say that they do reassure me to a certain degree. That is true.

  Chairman: We are getting a picture and obviously, at the end of the day, the question is what this Bill means and what effect it will have.

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