Previous Section Back to Table of Contents Lords Hansard Home Page

The noble and learned Lord asks very pertinently what are our intentions regarding guidance. I hope that we will shortly come to a debate on guidance. My noble friend Lord Tunnicliffe will outline our approach in more detail and some of the matters that we intend to cover in our guidance. We hope to expand on this in time for Report but we also live in hope that we will reach that stage of the Bill by the end of this month of January. Everyone knows the constraints to getting this Bill on the statute book. I cannot, therefore, undertake to have a draft of the guidance available by the time the Bill leaves this House.

3.15 pm

On the baggage-handler example, we find the answer put forward by another noble and learned Lord and previous Attorney-General-the noble and learned Lord, Lord Mayhew-fairly convincing. I am left with the arguments referred to by the noble and learned Lord, Lord Mackay of Clashfern, in relation to facilitation payments, and the speech he made on Second Reading also covering that issue. He is right that we do not live in a perfect world-we are unlikely ever to do so. However, without sounding too corny, trying to make it a little better in this regard is not a bad motive. That is what the Bill does, and it is intentionally an attempt to strengthen the law in this field so that it catches people who are guilty of improper conduct. I do not believe that anyone will disagree that that is a good thing.

The noble and learned Lord points out that we have to make up our minds about facilitation payments. That is his main point, and he says that we cannot have it both ways-we cannot say that facilitation payments are fine and at the same time want to strengthen the law. The point I want to make is that the official handing out the boarding passes, in one of his examples, will undertake improper conduct by accepting the facilitation payment. Therefore, the receiver of the bribe will have acted improperly. If the person paying the bribe believes this to be the case, he or she will also be committing bribery under Clause 1(3) of our Bill. That is what we intend. We do not believe that under this law the question of whether a person is liable will be different from that under the current law.

Lord Mackay of Clashfern: With respect, that is the doubtful issue. I do not believe that the person paying in that situation is necessarily corrupt in any sense. He wants to get what he is entitled to and there is a force majeure, as far as he is concerned, in the way of his getting that, so he pays. If one tried to prosecute such a case under the corruption arrangements which presently

7 Jan 2010 : Column GC37

exist, the prosecution would have a pretty good chance of failing. That is why I believe that the corruption point made by my noble and learned friend Lord Lyell is fundamental to the policy of whether you include facilitation payments. The point about the previous law and so forth is aside from this issue. Whatever we are doing, we are adding to the existing law by introducing facilitation payments whose previous existence is at least doubtful.

I am sure that some of the people who have handed out money to get a boarding pass would regard themselves as utterly law-abiding, never thinking for a minute that there was anything corrupt about it. However, I can see the force of introducing the provision because it tries to get at the corruption that demands the money. When you make it a crime to give money in that situation, it may tend to discourage people from asking for the money. In order for it to be universal, everyone would have to do it. However, I can see that there is an advantage in being first to do it, although certain practical disadvantages might arise, as I illustrated in my answer to the noble Lord, Lord Thomas of Gresford.

Lord Bach: I accept what the noble and learned Lord said in the sense that it is not worth us debating whether the current law would deal with the situation. What we are concerned about is what is in the Bill. However, it is worth mentioning that the prosecutorial discretion is the important point. If we intend to cover facilitation payments in this Bribery Bill, it is important that prosecutions are brought proportionately and not unnecessarily. We can rely on the code and the way in which prosecutors carry it out in being fairly confident that on the whole sensible decisions will be made.

I am about to sit down. I have already prayed in aid the Law Commission and the Joint Committee and I finally pray in aid the speech that the chairman of the Joint Committee made at Second Reading, when he powerfully but gently made the point that what we were proposing in these early clauses was the proper way to go. In spite of the advocacy of the noble and learned Lord, Lord Lyell, the Government are not persuaded. We think that we have got it right here, and I ask him to withdraw his amendment.

Lord Thomas of Gresford: Since we are in Committee, I may be permitted to speak in support of the Government's approach. Bribery and corruption in this country has been underprosecuted in the past. One reason for that is that it has not been clear. Let me take the noble and learned Lord, Lord Mackay, a step further and refer to a case that I have referred to before. It is clear in my own mind what happened on this occasion. A property developer paid money to the local authority official. When arrested by the police, he was most indignant, asking why they were arresting him for paying over £1,000 to the official. He said that it cost him £10,000 a year to do his job. He did not think that he was acting dishonestly; he thought that it was the price to pay and that he was in a force majeure situation. However, he was prosecuted for bribery. The great issue in the case-which is why it is in Archbold-was whether the words, "It costs me £10,000 a year to do my job" were admissible in that case. In fact, they were excluded, although I shall not bore your Lordships

7 Jan 2010 : Column GC38

with that, and he was acquitted in due course. But that just shows that you can start by paying a facilitation payment for your boarding ticket and end up paying an official to grant you planning permission.

In certain areas that culture has spread widely. There have been very famous cases, such as the Newcastle case-without naming names-of that culture, supported by the nature of the law at that time, which was not clear enough. It was not simply a question of evidence; there was more to it than that. In my experience, over many years at the Bar and as a solicitor, bribery cases have been very few and far between. I do not think that we live in a corrupt society, but there have been areas of corruption that have not been properly tackled. That is my first reason for saying that bribery has been insufficiently prosecuted in this country.

My second reason is the amusement and disdain shown by the officials of the Independent Commission Against Corruption in Hong Kong, with which I have had a lot of dealings-on the opposite side, I must say-about the way in which bribery is not stepped on in this country. Hong Kong is third in the Transparency International tables for non-corruption, while we are 17th and China is 45th. That gives some idea how an organisation like that clamps down on bribery and corruption; it brings many cases and has altered the climate within a community of some 7 million or 8 million people. This Bill is designed to prevent corruption, and not simply to assist in prosecution but to make it obvious to everybody that the simple act of becoming a party to an official corruptly receiving a sum of money or advantage of some sort is in itself a criminal offence, even though force majeure operates in that situation. We are changing the climate with this Bill, which is why I support the Government's position.

Lord Lyell of Markyate: I am most grateful to all noble Lords who have taken part in this debate. I am glad that I initiated it because I think it has thrown quite a lot of light on the real issues here. I am most grateful to my noble and learned friend Lord Mackay for tying it in so firmly with the very difficult question of facilitation payments. I suspect that that will come back to haunt us.

As I said, I entirely agree with my noble and learned friend Lord Mayhew, and with the noble Baroness. I do not want a world of corruption. I agree with the noble Lord, Lord Thomas: I want us to bear down on this. My first job before I came to the Bar was in Newcastle. I have forgotten the name of the fraudster, beginning with P, who gave a name for corruption to that whole area in the north-east.

The Earl of Onslow: Poulson.

Lord Lyell of Markyate: It was absolutely and completely scandalous and should have been clamped down on much, much harder and much sooner; I suspect that with the will there would have been the evidence to do so. He was eventually convicted and rightly sentenced to a very long term of imprisonment.

At the end, my noble and learned friend Lord Mackay brought out the links with extortion and demanding with menaces. That is probably a legitimate

7 Jan 2010 : Column GC39

defence to some aspects of this kind of so-called facilitation payment and might provide a genuine example. The noble Lord, Lord Williamson, has told us privately of some really terrible examples of the kind of demands that can be made in utterly corrupt circumstances where ship owners and stevedores and so on are completely placed over a barrel. I, as much as anyone else, want to see that stamped out.

I intend to withdraw the amendment at this stage but I remain anxious because we are not in a world where this matter is treated in the same way. As I said, the Americans put in the elaborate facilitation payment scheme, which one would like to know more about, and I hope that before we get to Report the Minister will be able to be even better informed than he is at the moment. We are in a world where other common law jurisdictions are using precisely, or very nearly, the language that I am suggesting we should stick with. However, we have had a valuable debate and for the time being I beg leave to withdraw the amendment.

Amendment 1 withdrawn.

Amendment 2 not moved.

Clause 1 agreed.

Clause 2 : Offences relating to being bribed

Amendments 3 and 4 not moved.

Clause 2 agreed.

Clauses 3 to 5 agreed.

Clause 6 : Bribery of foreign public officials

Amendment 5

Moved by Lord Henley

5: Clause 6, page 3, line 42, after "is" insert "corruptly"

Lord Henley: My Lords, the previous debate having made it clear that we are broadly content with the approach taken in the drafting of Clauses 1 and 2, I wish to explore the operation of the third offence in the Bill-that is, bribing foreign public officials. I propose three simple amendments. In moving this amendment, I shall also speak to Amendments 6 and 7. As I think the Committee will recognise, they are merely probing amendments to allow your Lordships to consider the offence, under Clause 6, of bribing foreign officials.

3.30 pm

Much of the way in which Clause 6 is designed to operate depends on what is allowed by the written laws of the foreign country in question. I am aware of the recommendation by the Joint Committee that the Bill should refer to "written law" to avoid any loopholes. There is much merit in that approach and I do not seek to overturn or undermine it.

7 Jan 2010 : Column GC40

The three amendments which I have tabled refer more to the behaviour of the person who might be said to be offering the bribe, called P in the Bill; namely, that they would be acting with a corrupt intention to gain an undue advantage in business by offering an improper financial advantage. That may be overloading somewhat on the nefarious adjectives, but will the Minister explain clearly where the distinction will be drawn in deciding what bribery is?

The explicit reference to the written laws means that established custom and practice would not be taken into account. For example, if it is established practice for a ship's captain to pay a harbourmaster in a foreign country what we might euphemistically call an "unofficial" fee to dock and unload, I am sure that the Minister would agree that that would amount to a facilitation payment. Noble Lords will know that the United States, for example, has a defence where small facilitation payments are involved. I, however, share the view of the Joint Committee that facilitation payments should remain criminalised, but by focusing on the intention of P and the nature of the payment, it may be easier to retain the concept of proportionality in prosecutions. My amendments would direct prosecutors to the nature of the bribery to determine whether a prosecution is proportionate, rather than to the study of foreign laws, where a written provision may simply not exist to cover a practice or custom.

While I raise that point as a matter of general debate and look forward to hearing the views of the Committee, I have a specific question for the Minister. Have the Government made an assessment of any impact that Clause 6 might have on British companies operating abroad? Will it, for example, disadvantage them in cases where other OECD nations operate according to local custom while their UK counterparts must strictly observe the local written laws?

I wish to develop a further point. The Government have said that they do not seek to outlaw legitimate expenditure, such as reasonable corporate hospitality. Will the Minister expand on where that line might be drawn? I take a possible example: that of a British company that wishes to demonstrate its product to officials from a foreign state and then flies them to its headquarters in the United Kingdom for a demonstration. If the company were to put up the officials in a hotel, it might seem reasonable. We could then argue-I think of noble Lords' expenses-whether a three-star or a five-star hotel might be reasonable, but that is better left to prosecutors. But we might consider a scenario involving officials from two countries who are put up in a hotel, but the laws of one of those countries are silent as to whether that is permitted. What about that scenario? Would the United Kingdom company be committing bribery of one set of officials but not the other, even though it is behaving in the same way towards both? Would it matter if one set of officials ended up purchasing the product, and the others did not? We could speculate on possible, if implausible, scenarios all day, but clarity on the operation of Clause 6 is necessary. How will legitimate expenditure be made distinct? Would the Government be prepared to consider a specific defence for reasonable hospitality? Will advice be available from the Government on

7 Jan 2010 : Column GC41

potentially confusing cases where the fact of bribery depends not on the intention of P, but on an understanding of foreign written laws?

As I said, I merely wish to debate the measures, not signal any particular disagreement with them. I shall listen carefully to what the Minister has to say in response and, for that matter, what other Members of the Committee have to say in relation to the question I posed about Clause 6. I beg to move.

Lord Tunnicliffe: My Lords, Amendments 5, 6 and 7 in the name of the noble Lord, Lord Henley, seek to qualify the Clause 6 offence of bribery of a foreign public official. They seek to do so by limiting the offence to cases where a bribe is intended to corruptly influence a foreign public official in order to obtain an undue advantage in business by offering to give the official an improper financial or other advantage. We believe that these amendments are undesirable and I am grateful for the opportunity to explain why.

As the Committee will be aware, the current clause makes it an offence to bribe a foreign public official. Unlike the general offence, this clause only covers the offering, promising or giving of bribes and not the acceptance of them. Also, unlike the general offence of bribing another, culpability is not premised on any intention to elicit improper contact, although this will often be the case. The Clause 6 offence is formulated so as to avoid the need to identify precisely the nature of the functions of and duty owed by foreign public officials. Such matters have proved to be one of the difficulties experienced by prosecutors in this kind of case under the current law.

Because of its special focus, the Clause 6 offence describes bribery in a different way to the general offences but, equally accurately, describes conduct that would be characterised as corrupt by all right thinking people. We submit that the clause achieves its purpose without the need for the additional language proposed by the noble Lord, Lord Henley.

Let me explain why. First, the person giving the bribe must intend to influence the recipient in the performance of their function as a public official. Secondly, the bribe must be intended to obtain or retain business or a business advantage. Lastly, the advantage finally or otherwise offered, promised or given to the foreign public official is defined as a bribe when the foreign official is neither permitted nor required to be influenced by the offer, promise or goods as determined by the application of written law.

I appreciate that the noble Lord may be seeking to reflect in the offence normal business practice. Of course, it is the very nature of a business in a free market that one company will seek a business advantage over another, but such an advantage must be secured through honest and legitimate means. Contracts should be won by presenting a tender that represents for the client the best value for money and not by offering additional payments or advantage to secure the contract. Qualifying Clause 6(2) by referring to an undue advantage in the conduct of business could provide a let out to a person charged with a Clause 6 offence. I can foresee endless legal arguments over whether the advantage the defendant sought to secure was or was not an undue advantage.

7 Jan 2010 : Column GC42

The same can be said of the proposed qualification in subsection (3). In the absence of a clear definition, where is the line to be drawn between, on the one hand, a financial or other advantage and, on the other, an improper financial or other advantage? If the noble Lord's intention is that the concept of impropriety in Clauses 1 and 2 should equally apply here, there would be a need to identify precisely the nature of the functions of and the duties owed by foreign public officials. This is precisely what the model in Clause 6 seeks to avoid. Experience shows that such a requirement places significant difficulties in the way of effective prosecutions in cases of this kind.

In both cases, the additional words introduce an unnecessary and added complication. They represent additional matters for the prosecution to prove which could undermine the value of the bespoke offence. In using the words "undue" and "improper" the noble Lord may be probing whether the wording should more closely follow the wording of the OECD convention, which is the source of this bespoke offence. However, we believe that the offence in Clause 6 fully achieves the purpose and effect of the offence in the convention as drafted. It has the backing of the Law Commission, the Joint Committee and the OECD itself.

Amendment 5 seeks to insert the term "corruptly" into the clause. As my noble friend Lord Bach indicated in response to the first group of amendments, we are having considerable difficulty with the use of this term. It is an inherently difficult and vague concept found in the existing statutory offences. We have made a conscious decision to abandon its use in the Bill. The use of the word "corruptly" here will inevitably require the courts, in searching for the meaning of the word, to revert back to old, inconsistent case law and thereby introduce another level of unnecessary complexity and uncertainty. It would allow the old and failing current law, which we intend completely to reform, to haunt the application of the new law from beyond the grave.

The noble Lord, Lord Henley, raised a number of points which I shall now do my best to deal with, with the caveat that if I say anything that needs correction I will write to him and other Members of the Committee.

On the issue of whether custom and practice will be a defence, it is quite clear that it will not be. That is why there is a specific reference to the written law. Ignorance of the local law will not be a defence in relation to the offence in the Bill. Those involved in international business activities should have ready access to legal advice on the legitimacy of payments to foreign officials and should think twice before offering, promising or giving advantage to foreign officials. The Joint Committee fully considered the impact of the Clause 6 offence on bona fide commercial activities such as corporate hospitality. In its report at paragraph 147 the Joint Committee noted that the prosecutorial discretion would be able to differentiate the good from the bad in respect of corporate hospitality and was content with this approach. The evidence of Professor Horder of the Law Commission was highlighted in the report, which stated:

"Might it not be said, then, that 'improperly' should be tacked on as an adverb after 'influence' so as to distinguish legitimate from illegitimate hospitality? ... The answer is 'no' because that

7 Jan 2010 : Column GC43

would inevitably re-introduce questions about whether cultural norms and expectations can make a payment 'proper', and that is exactly the result that this offence is designed to prevent".

Should there be a defence for reasonable corporate hospitality? We do not believe one is needed. The offence applies only to advantages given to foreign public officials which are intended to influence officials and to obtain or retain business. This will not necessarily be the case in respect of hospitality. To the extent that any corporate hospitality might be caught by this division-which will certainly not generally be the case-it is appropriate for prosecutors to take a view on where the public interest lies. It is unlikely that reasonable hospitality to foreign officials will attract the interest or action of enforcement authorities.

I hope that answers, at least in part, most of the questions posed by the noble Lord, Lord Henley. We shall of course examine his remarks with great care and consider whether there is any further information that we might sensibly provide in writing and, if so, we shall write to him. On that basis, I ask him to withdraw the amendment.

Lord Mackay of Clashfern: My Lords, perhaps I may draw the noble Lord's attention to a small point on subsection (3)(a) which refers to P bribing F,

and so on.

Paragraph (b) says:

"F is neither permitted nor required by the written law applicable to F to be influenced in F's capacity as a foreign public official by the offer, promise or gift".

Would it be better if it said "other advantage", because it is really referring back to paragraph (a)? Changing the wording to "gift" suggests a possible difficulty with corporate hospitality, although it is hardly a gift. I raise that as a matter that might have a slight bearing on the amendments.

3.45 pm

Lord Tunnicliffe: My Lords, I spent a lot of time going through this clause, trying to find the places where questions would be asked, but I did not notice "gift". It is a well made point and we will reflect on it.

Lord Lyell of Markyate: The Minister referred to the OECD requirements and laid proper emphasis on the question of undue hospitality. I may have missed it, but is the concept of undue hospitality reflected in the Bill? If it is, that will at least narrow the degree to which one has to rely on prosecutorial discretion. My only concern, as it was in my previous interventions, is that the extent of the law should be clear and that every instance of giving hospitality should not constitute a crime, which is only not prosecuted because of prosecutorial discretion. I do not think that that is the Government's intention; I think that it is that there should be some threshold that you would have to reach before a prosecution would even begin to think that there was a crime. If any clarification can be given on this, I would be most grateful.

Next Section Back to Table of Contents Lords Hansard Home Page