Memorandum submitted by the Attorney General
(BB 60)
This Memorandum gives my answers to the questions
that were not reached when I appeared before the Committee on
25 June due to the lack of available time. I have also taken
the opportunity to make some additional points in relation to
some of the questions to which I gave oral answers.
Q.2 To enquire about the accountability for
prosecutorial decisions in bribery cases if the power of consent
is transferred from the Attorney General to the Directors; and
to explore the implications of abolishing the requirement to obtain
consent altogether.
Q.4 To discuss concerns that the most serious
allegations of bribery may never be prosecuted due to "national
security" concerns; and to ascertain whether the Constitutional
Renewal Bill is likely to take forward proposals to limit the
Attorney General's powers of direction to "national security"
cases.
When I gave oral evidence, there was quite a
lengthy discussion of my role in superintending the prosecuting
authorities and my power to give directions in relation to the
conduct of individual cases. It is important to remember that
the draft Bribery Bill contains no provision in this regard. Should
the draft Bill in its current form become law, the consent function
in relation to bribery cases will pass from me to the prosecuting
authorities, but my power of direction will remain unchanged.
It appears to me that the power of direction and the wider constitutional
position of the Attorney General should be addressed in the context
of the draft Constitutional Renewal Bill, rather than this Bill.
Q.6 To ascertain whether introducing a statutory
power to authorise bribery by the security services will place
the UK in breach of its international obligations.
In oral evidence I made specific reference to
the OECD Convention on Combating Bribery of Foreign Public Officials
in International Business Transactions. Clause 13 of the
draft Bill is designed to avoid infringement of this convention
by ensuring that conduct by the intelligence services amounting
to bribery of a foreign public official cannot be authorised by
the Secretary of State. I did not deal explicitly with the United
Nation Convention against Corruption and the Council of Europe
Criminal Law Convention on Corruption. I do appreciate the concern
that an exemption for the intelligence services that is applicable
to activities intended to protect the country's economic interests,
and not just to safeguard national security and combat serious
crime, may be incompatible with these instruments.
Each of these instruments makes it clear in
its preamble that it is designed to address the damage caused
to society by corruption, in terms of the threat to the rule of
law, democratic values and good governance. They are not intended,
in my view, to address the activities of state intelligence agencies
acting in accordance with domestic law. I do not see Clause 13 as
being inconsistent with the principles or provisions of these
instruments. Taken with Clause 14, it contains several important
safeguards—only necessary and reasonable action can be authorised,
the authorisation must be given by the Secretary of State personally
or (in cases of urgency) by a senior official, and authorisations
are time-limited. It should also be remembered that our intelligence
services, unlike those of many other countries, are regulated
by statute, accountable to Parliament, and subject to external
scrutiny by independent Commissioners. It seems to me that the
creation of a narrowly circumscribed legal exemption for servants
of the state in these circumstances cannot properly be regarded
as contrary to our international obligations. Accordingly I would
not think it necessary to limit the Clauses to activities relating
to national security and serious crime. I would stress that I
am simply expressing my own initial view, rather than giving formal
or fully researched international law advice.
Q.7 To explore the practical, human rights
or other legal concerns associated with removing privilege over
the words and conduct of accused Members, but not over the words
and conduct of other Members and witnesses (particularly if doing
so prevents exculpatory material being taken into account).
In oral evidence I mentioned that prosecutorial
discretion, in accordance with the Code for Crown Prosecutors
and subject to the scrutiny of the Attorney General, would be
an important safeguard against the possibility of an unmeritorious
allegation against a Member being taken forward. It was suggested
in response, I think, that this was a dangerous basis upon which
to remove a privilege of 300 years' duration. I should stress
that the draft Bill does not remove Parliamentary privilege. It
merely provides a narrow exception to the general rule, in the
particular circumstances where a Member has committed a bribery
offence. I would also add that prosecutorial discretion is not
the only safeguard. The final arbiter in these matters would be
the court. If a Member being prosecuted for bribery in reliance
on evidence tendered under Clause 15 was unable to receive
a fair trial because Parliamentary privilege prevented him or
her from adducing exculpatory evidence, it would be open to the
court to stop the case as an abuse of process. However, I would
expect the prosecutor to be alive to the issue and terminate the
case before that point was reached.
The Committee asked how Clause 15 comes
to be in the Bill. It would be necessary to go back to the 2003 draft
Corruption Bill and beyond to trace the origin of the proposal.
I understand that Clause 15 in its current form follows the
recommendations of the Joint Committee on parliamentary Privilege
in 1999 and the Joint Committee on the 2003 Bill who,
I am sure, considered these difficult issues with care.
Q.9 To obtain a justification for the difference
between the mens rea of the active and passive bribery offences;
and to explore the reasonableness of imposing "strict"
liability for a serious crime such as bribery.
The Committee gave the example of an employee
who accepted a financial or other advantage, in circumstances
where another person intended that it would be accepted as a reward
for improper performance of the employee's duty. It was suggested
that the employee would be guilty of the offence under Clause
2, even if he or she had no intention of improperly performing
his or her duty. I assume that the Committee has in mind case
5 under Clause 2(4), which makes it an offence for the employee
(R) to accept an advantage as a reward for the improper performance
of a function, whether by R or another person. By virtue of Clause
2(7), it does not matter whether R knows or believes that the
performance of the function is improper. However, the prosecution
would still have to prove that the advantage was actually a reward
for the improper performance of the function. It also seems to
me to be implicit in Clause 2(4) that the prosecution would have
to prove that R knew that he or she was accepting the advantage
as a reward for performing the function (whether or not he or
she knew or believed that the performance of the function was,
or would be, improper).
The question is, therefore, whether or not there
could be a case where R was genuinely unaware that the performance
of the function for which he or she was being rewarded was improper.
I find it hard to imagine that such a situation could arise in
the real world. From the point of view of the payer of the bribe,
he or she would have to communicate to R what it was that R was
expected to do in exchange for the bribe, in order for the bribe
to have any chance of achieving the desired effect. If R knew
what it was that the payer wanted him or her to do, how could
he or she not know that it amounted to improper performance, having
regard to the way that the term is defined in Clause 3 (breach
of an expectation of good faith or impartiality, or of a position
of trust)? In the unlikely event that R genuinely had no intention
of performing his or her functions improperly, and was guilty
of an offence in a purely technical sense, I would not expect
a prosecutor to regard it as being in the public interest to bring
proceedings.
Q.11 To explore whether clause 4 risks
catching conduct that should not be viewed as criminal, such as
basic hospitality; and to discuss the implications of adding a
qualification to clause 4 requiring the advantage to be "undue"
or "corrupt".
Whether or not any particular conduct amounts
to an offence under Clause 4 will turn on whether or not
the person giving the advantage intends to influence the foreign
public official, and whether or not the advantage is "legitimately
due". As we discussed when I gave oral evidence, "legitimately
due" is intended to mean permitted or required by the local
written law (legislation and, in a common law jurisdiction, reported
case law).
This applies whether the context is that of
corporate hospitality, a low-level facilitation payment or an
offset or planning gain scenario. If there is no written law which
permits or requires a foreign public official to accept corporate
hospitality, for example, or hospitality of the kind and level
given in the particular case, then the Clause 4 offence will
be committed. In these circumstances it would still be for the
prosecutor to decide whether or not it would be in the public
interest to bring a case. In this regard, the full factual circumstances,
including the nature of the hospitality offered, and the link
with any particular transaction or contract, would need to be
taken into account.
I would not see much benefit in adding in a
further requirement that the advantage had to be "undue"
or "corrupt". It is not clear to me what "undue"
is meant to add to the existing "not legitimately due"
formula. The OECD Convention uses the word "undue",
but this is to be interpreted as meaning not permitted or required
by local written law or regulation, according to paragraph 8 of
the Commentaries to the Convention. This is exactly what "not
legitimately due" is meant to mean under the draft Bill.
Having moved away from "corrupt" as a concept in the
draft Bill, I would not be in favour of reintroducing it in the
limited area of this offence.
Q.13 To explore proposals to simplify the
corporate offence either by removing the need to prove negligence
or by raising the threshold to "gross negligence"; and
to ascertain whether the establishment of a body to impose fines
under a civil liability regime would be a satisfactory alternative
to a new criminal offence.
The Committee is concerned that a failure to
have in place adequate procedures to prevent bribery appeared
to be both an element of the offence for the prosecution to prove
under Clause 5(1)(c), and a defence under Clause 5(4). It appears
to me that these provisions are actually quite separate and distinct.
What is required under Clause 5(1) is for the prosecution to prove
a negligent failure to prevent bribery. This may be a systemic
failure due to an absence of effective anti-bribery controls,
but it could equally be a one-off failure. In the latter case,
it is right that the commercial organisation should be able to
avoid liability if it can show that it had controls in place that
had otherwise proved adequate, provided that the negligence was
not on the part of a senior officer. This is the purpose of Clause
5(4).
This Clause has to balance the concerns of business,
who are facing potential criminal liability where none had existed
before, against the wider public policy imperative of tackling
bribery. It appears to me that the Clause as drafted strikes a
satisfactory balance, but there may be other ways of achieving
the same ends. The Committee mentions the possibility of a model
based on vicarious liability with a due diligence defence, which
I think has been advocated by Professor Celia Wells. I do not
have strong views on which approach is taken, but it may be thought
unwise to depart to a significant extent from the general law
on corporate liability by removing the need to prove fault on
the part of the company, in advance of the findings of the Law
Commission's review of the subject as a whole.
In relation to the suggestion that corporate
liability could be dealt with by a regime of civil sanctions,
I take the view that bribery is a very serious matter that properly
lies within the reach of the criminal law. Dealing with corporate
liability by way of civil sanctions would risk sending out the
wrong message about our view of the gravity of this kind of misconduct
and our determination to tackle it. This does not mean that I
am opposed to the use of alternatives to prosecution in appropriate
cases, at the discretion of the prosecutor and having proper regard
to the relevant public interest factors. I have in mind cases
where a company reports past wrongdoing and demonstrates a commitment
to complying with the law in the future—a prosecution may
not be necessary, and it may be appropriate to combine a civil
recovery order with monitoring arrangements to ensure future compliance.
Q.14 To discuss the desirability of providing
official guidance on the main offences and an advisory service
that can be relied upon by businesses; and to ascertain whether
the Attorney General or a new independent body would be best placed
to provide that guidance and advice.
Dealing with the suggestion for an advisory
service first, I would be concerned if it was proposed that companies
were to be given specific advice that a particular transaction
would be within the law, amounting effectively to a prospective
immunity from prosecution. I am aware that there is such a system
in the United States, but I think we should be wary of importing
an idea like this from a different jurisdiction without careful
consideration of how it would fit into our system. The role of
the US Attorney General, for example, is very different to mine
in a number of respects. If the advice was to be given by a body
other than the prosecuting authority, my concern would be that
the discretion of the independent prosecutor to bring proceedings
in due course would be fettered. If it was suggested that the
prosecuting authorities themselves (or my Office) should give
the advice, that would be a significant change in their role,
and could have serious resource implications. I think this is
also the view expressed by the Director of Public Prosecutions
and the Director of the Serious Fraud Office in their evidence.
Turning to the question of published guidance,
there are a number of questions—who should issue the guidance,
what it should cover, and what its legal status should be. As
a matter of principle, it does not seem to me that it would be
appropriate for Government to issue this kind of guidance. I am
not aware of another situation where guidance is given on what
would constitute a defence to criminal offences, other than in
heavily regulated areas like antimony laundering or health and
safety, which are not comparable in my view.
There is also the practical consideration that
the guidance would potentially have to cover a huge range of circumstances,
in terms of countries, business sectors and size of organisation.
I do not believe that the Government could do more than provide
high-level statements of principle.
The private sector is much better placed to
give detailed guidance on a sector-by-sector basis. There is already
a good deal of this kind of guidance available—for example,
the Woolf Committee's Report into ethical business in BAE Systems
plc and the Common Industry Standards of ethics in the European
defence sector. The Government encourages the development of high
business standards and has supported adoption of industry-wide
codes of ethical practice—for example, the previous Anti-Corruption
Champion has endorsed a practical toolkit to help small companies
implement the defence sector Common Industry Standards. There
are also many legal and accountancy firms providing advice to
business on corporate governance systems generally, and anti-bribery
controls in particular.
Guidance of this kind issued by the private
sector would not have the force of law, but it would be taken
into account by prosecutors and the courts in assessing the standards
to be expected of a business in particular circumstances.
I hope these comments are useful, and I am grateful
for the opportunity to give evidence.
The Rt Hon Baroness Scotland
QC
July 2009
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