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My third and final concern about Clause 12 is that in any event it does not contain the protection for the public interest contained in Clauses 13 and 14 of the draft Bill. The draft Bill confined the intelligence and security services exemptions to those cases where a prior authorisation to the act of bribery was given by the Secretary of State or a senior official. If law enforcement functions are to be added, prior authorisation should be by the Attorney-General.
It is quite unacceptable for any intelligence officer of whatever rank, any employee of the CPS or any employee of a local authority carrying out law enforcement functions to be able to decide for themselves to carry out an act of bribery. Cases of bribery by public officials in order to carry out an intelligence function, a security function or a law enforcement function would, I hope we can all agree, be very rare exceptions. Any such departure from the rule of law must surely be carefully considered in advance by very senior officers of the state-not least to avoid any later dispute as to whether the officer was genuinely acting for official purposes, as well as to ensure that such conduct was truly necessary and proportionate. Paragraph 200 of the Joint Committee's report refers to the evidence of the noble and learned Baroness, the Attorney-General. She emphasised to the Joint Committee that the prior authorisation procedure was an important safeguard. I respectfully agree.
Those are my main concerns about Clause 12. I give notice to the Minister that I-and, I am sure, many other noble Lords-very much look forward to debating with him during the passage of the Bill whether Clause 12 is necessary, whether it is proportionate and whether it is consistent with the rule of law.
Baroness Whitaker: My Lords, this is a very, very well worked-on Bill and it shows it. We have had time to think about the subject-some may say, and have said, too much time, but at least the result is worth it. Particularly, the judicious and vigorous chairmanship of the noble Viscount, Lord Colville of Culross, enabled the scrutiny committee on the second draft Bill to reach unanimity in even the most difficult areas. The chairmanship of the late and much lamented Lord Slynn of Hadley was valiant too, but, as the noble Lord, Lord Waddington, said, he had a much worse
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It is important to see this Bill in a wider context. It does not just reform our outdated and piecemeal domestic law on bribery. It tackles wrongs-evils-suffered by people far beyond our frontiers. To quote the G8 2006 communiqué:
"Large-scale corruption ... can have a devastating effect on democracy, the rule of law and economic and social development. We recognise that corrupt practices contribute to the spread of organised crime and terrorism, undermine public trust in government and destabilise economies. Corruption can deter foreign investment, stifle economic growth and sustainable development and undermine legal and judicial systems. The net effect of corruption is felt most directly, and disproportionately, by the poor".
The Government's impact statement on the Bill, which is a very good read, gives chapter and verse about the deleterious effect of bribery on business as well as on economic and social development. Your Lordships may also know that the combination of the huge increase in global trade and the wide reach of exemplar legislation such as the American Foreign Corrupt Practices Act have changed the climate of business opinion about getting away with bribery, for good. In a way, the OECD anti-bribery convention is a subsidiary instrument to the change in reality. It is none the less the mark against which our Bill today will be judged.
I think the Bill will comply, and the UK can hold its head up among the company of OECD nations. But there is one area where I also should like to press my noble friend the Minister. This is the defence for the security services. I welcome the fact that the Government have tried to meet some of the reservations of the scrutiny committee, but I recall the OECD stricture that while the purpose of national security is a valid defence, other actions undertaken by security services-for instance, in the service of national economic interests-are not. The defence in the current Bill covers any proper function of the security services, which includes more than national security. I see that the Constitution Committee is of the same mind, as well as all previous speakers in this debate. Can my noble friend offer a further narrowing of this defence?
Other noble Lords have enumerated the many positive provisions of the Bill, both in the debate on the gracious Speech and earlier today. Indeed, the noble Lord, Lord Thomas of Gresford, from the Liberal Democrat Front Bench, called it "a beacon". I will not duplicate what other noble Lords have said, but simply conclude by saying that this is a remarkably good Bill which has made a difficult subject manageable and implementable. Even more good will ensue when it becomes law, and that must be soon.
Lord Patten: My Lords, in declaring all my business interests, as the Bill relates to commercial organisations in particular, I should also declare-I hope that this
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I have four points to make: on the terrible and terribly corrosive effects that bribery has; on the need for strong corporate cultures, above all else, in civil and commercial society, as the bedrock of any defence against bribery; on the beneficial effects of the new duties laid on companies and, therefore, on their directors-in particular, on non-executive directors; and on the need to ensure that our security, intelligence, police and military are not impeded in any way in their sometimes covert but often life and/or property-saving activities. From what I have heard so far, I may be a sole voice arguing that in your Lordships' Chamber this afternoon.
First, although I must say to the noble Lord, Lord Bach, that I deplore the length of time that it has taken for the Government to table the Bill after what has been said about the issue since 1997, I am glad that they have done it. I also note that they are doing something that Ministers are usually rightly restrained in claiming, which is introducing legislation with a strong moral component. It would be risky for the Minister to say that in his own praise, but I recognise that. Bribery at home and, in particular, abroad, undermines the rule of law, attacks the excellent principles of fair competition, as the Minister said, but, worst of all, is a morally destructive crime that has devastating effects on the poor and on the human rights of those in our less well off countries.
This happens because bribery often diverts scarce resources in poor countries towards the purchase of inferior products. I have observed that in a business context. It certainly corrupts financial regulators, where there are such persons present in third-world countries, and police forces alike with devastating abandon, and sometimes leads to attendant violence. All those economic and human costs are usually felt most directly by the poor, just as development and democracy are undermined, as the noble Lord, Lord Bach, said in his introductory remarks.
Secondly, although I welcome both the economic and moral purpose of the Bill, all the new sanctions and penalties that it introduces will be of naught to companies where that sort of behaviour has been almost institutionalised unless it is paralleled by deep, lasting and profound corporate cultural change. See a company-I have observed this-where bribery has been used and, generally speaking, you are looking at a company with a weak and devious corporate culture, with scant regard for proper ethical behaviour, little or no ethical training for staff, weak or dismissive board practices and, worst of all, an absolute determination to win contracts at all costs. That characterises companies where bribery has been used-here I speak about western European and, alas, UK companies.
An example of this that has been used before is when such a company comes into receipt of proprietary information concerning products or intellectual property alike that belongs to a competitor who is chasing the self-same enticing contract. Rather than sending that information straight back unread, it uses the information
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This is certainly not the place for a quick or slow seminar on how all that can be done but, in essence, every employee, great or small, should in such companies have a lively sense of, put simply, whether they would mind what they are about to do in private being writ large in public. That is a very simple test. In other words, would you mind your family or friends knowing what you are about to do, and the media then studiously reporting it? That is the key question. It has the great benefit of also being a very simple question. I have observed good practice in international companies where that is drawn again and again to the attention of individuals.
Thirdly, directors of UK companies are moving into a new world of duties to prevent bribery, which I hope will be no mere box-ticking exercise. Indeed, it cannot be because it will demand a demonstrable set of adequate procedures being put in place to prevent bribes being paid. Only if this is demonstrable will they be able to seek mitigation and to avoid corporate liability. This is the world of strict liability as I, no lawyer, understand it.
I say with respect-which I understand is the correct term to use-to my noble and learned friend Lord Mackay of Clashfern that no amount of guidance from the business ministry will help in this context. It is the companies themselves which, if challenged, must be able to demonstrate that they have those procedures in place; appealing to some bit of ministerial guidance will not help.
It is not for the provisions of Clause 7 to spell out how this defence could be erected-that is not for an Act of Parliament to do. However, it is clear that to do so, companies would be taking a great risk merely to rest on some once-written but then quickly forgotten code of practice, which is dished out to employees on the first day that they come into service but not refreshed on an annual basis. I believe that ethics training on an annual basis is critical. It should start at the top, with the chairman, chief executive and board. They should be trained and refreshed just as much annually as those lower down the corporate structure. In other words, we need to show a continuum of corporate behaviour that illustrates that the culture of ethical behaviour is underpinned in this way.
Doubtless there will be a huge growth in the consultants industry, with people advising boards, for considerable fees, on how to do this. That is not something for consultants; it is for the boards to take on board themselves.
Fourthly and lastly, I am very glad-and thus far I am a lonely voice-that there seems to be reasonable cover in Clause 12, subject to all the forthcoming probing in Committee, for our intelligence services,
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I was equally surprised to see the conclusion of the Joint Committee on the draft Bribery Bill. It says at paragraph 30 on page 88 of volume 1 of its report, published on 16 July 2009, that there was no,
Tell that to those involved with the police or the domestic intelligence agencies which, domestically-not abroad in some conveniently distant uranium enrichment plant in Iran-may, using public money for the covert end of gaining intelligence via an informer, be in a position to prevent public carnage in some terrorist outrage.
I fully accept that I have not read things in great enough detail; I should have consulted the noble Lord, Lord Pannick, for a quick tutorial, because I recognise that having trading standards officers et cetera embraced in this provision is probably a little bit daft, even for someone as robust on these issues as myself. But that said, I believe that it would be entirely wrong to deny domestic intelligence, and indeed police officials, the opportunity to use public money covertly to prevent terrorist outrages. Can you imagine if they did not and there was a terrorist outrage? The whole public inquiry industry would explode around us and many people would make a lot of money from attending to it.
Lord Woolf: My Lords, as has already been anticipated by the noble Lord, Lord Bach, I shall begin by making a disclosure of my position as chairman of the committee that investigated ethical standards in the company BAE. My experience in that capacity makes it obvious that I should, and do, welcome the Bill. Legislation of this quality was sorely needed, and it is my hope that it will play the part that the noble Lord, Lord Pannick, indicated, by helping to restore the reputation of this country. I have no doubt as a result of very instructive evidence that I received from Transparency International and others, including the OECD, that the lack of legislation was something that they were very concerned about, because they felt that this country was failing to perform its natural role as a global leader of proper ethical standards. I therefore wish the Bill a speedy enactment.
I do, however, acknowledge that the difficulties of producing a workable Bill are great indeed, and obviously the history explains in some way the delay that has occurred in producing a draft Bill that is suitable to come into law. From my perspective, looking at the
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I would not base my criticisms of Clause 12 on who is included or not included but would adopt a more holistic approach by suggesting that this provision is not needed. I would suggest that the defence is put there no doubt to give reassurance to those who are referred to. However, if the defence were to be available-and a very heavy burden is placed on those who seek to rely on this defence, having regard to it being necessary to do so-I would be confident that the Attorney-General, if it be the Attorney-General whose consent was required, or one of the three directors who are referred to in the Bill, would consent to a prosecution. It seems to me that if it was clear that what was done was necessary in the public interest, then that is not a situation when prosecutions should occur. It should be no problem for the agencies referred to to be able to inform the law officer or director concerned that that is the position.
As to whether it should be the Attorney-General or one of the directors concerned, I would support it being done by the Attorney-General. Recent experience has shown that there are great benefits in the person who has the onerous task of exercising that responsibility being clearly responsible to Parliament. It is also beneficial for Parliament to be able to question why a consent has not been given. Furthermore, I suggest that the message given by the presence of the defence will be seized on by detractors of this country, in so far as their activities in relation to corruption are concerned, as not giving the necessary support that those who want to eliminate corruption would expect.
The other matter I want to refer to is guidance. Normally, it is not desirable for guidance to enter into areas of criminal law. On the evidence I heard in the committee, I have no doubt that a case can properly be made that this is an exceptional Bill in this respect. What is meant by "bribery" is particularly difficult to define exactly. It is no doubt because of those difficulties that the Minister indicated in a letter of 8 December this year to the noble Lord, Lord Goodlad, chairman of the Constitution Committee, that it is the intention of the Government not only that there should be guidance but that the guidance should be issued before the legislation is brought into force. If the Government have given an assurance of that nature, which I have no doubt the Minister will be happy to confirm today, then it is of not great significance whether it is statutory or non-statutory guidance. What I apprehend will happen is the very difficult situations that can arise will seriatim be the result of decisions by those who have responsibility in this area. A common law will then develop with examples of situations which fall on either side of the line. That there has to be a line, and that it is a grey and indistinct line, is beyond doubt. One already knows of the situations that can occur: we have heard of one example, and I could give many more, showing that the industrial world is not sure how this legislation is to be applied. That it should be applied is of great importance.
It is right, as the noble Lord, Lord Patten, indicated, that there has to be a change of culture inside companies. It is very important that people in these companies should realise what they have to focus on. In practice, what is or is not corrupt is very easy to identify even though it is difficult to define. In particular, it has to be clear that for bribery it is not a sufficient justification to say, "I could not get the business otherwise". If you have to offer a bribe to obtain business, any company concerned for its reputation will decide not to do that business. That has to be the clear message. It is difficult, in producing a criminal offence, to give that message, but it has to be made clear in guidance. So I welcome that aspect of the Bill.
Lord Lyell of Markyate: My Lords, I declare an interest as a member of the Constitution Committee and of the Joint Committee on the draft Bill and as a former law officer who was involved in a number of major bribery and corruption cases during my period in office. I strongly support the Bill in principle, but it is important that we scrutinise carefully its detailed provisions. These cover: first, the law of bribery as it is to apply in the United Kingdom; and, secondly-this is particularly important-the law that in future is to apply to the bribery of foreign public officials.
There is quite properly a strong desire, led by bodies such as the Corner House and Transparency International, to seek to do everything that we can to stamp out the widespread bribery that exists in substantial areas of foreign trade and commerce. But this is a complex area. If the new law is to be successful, it must be drafted with as much clarity as possible and it must be seen to be fair.
Juries are on the whole not at all reluctant to convict for the very nasty criminal offences generally known as bribery and corruption. As the Law Commission has said, in general 95 per cent of the public have a good understanding of what these words mean. The Director of Public Prosecutions confirmed in writing to the Joint Committee on the draft Bill that the state of the current law has not in the past 15 years caused any serious problems in bringing prosecutions. I know from my own experience going back to 1979 that the same was true during that period. The main problem in prosecuting bribery has never been the law; rather, it is the obtaining of the necessary evidence. None the less, during my period in office, some very serious cases of bribery were prosecuted successfully. The first of the Guinness cases, involving Messrs Saunders, Ronson, Parnes and another, was one example of massive bribes. Other cases involved a series of carefully planned bribes in relation to contracts for the supply of expensive equipment in connection with the production of North Sea oil.
Some supporters of the Bill believe that the fulfilment of our OECD obligations, which I strongly support, would produce a radical change. Clause 7 of the Bill imposes a duty on commercial organisations to prevent bribery. This will, I think, have a significant beneficial effect. I was personally impressed by the seriousness with which the duty to prevent bribery seemed to be taken by the representatives of major businesses who
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The first-I feel that I have an uphill task in making this point-is the complexity of Clauses 1 to 5 of the Bill and the meaning of "improper", which has been chosen as the key word to summarise the necessary criminality. I say this with some diffidence, because no one has greater respect for Lord Slynn; I was his first pupil. He had an immensely difficult task and the law commissioners worked extremely hard on this, for which I pay them tribute. However, I share the view of some leading practitioners at the Bar that these clauses are complex and difficult to unravel.
The word "improper" in the dictionary has a large number of meanings that fall well short of criminality-"abnormal", "incorrect", "unsuitable", "ill adapted", "unbecoming", "indecorous" and "indecent" are all examples. The noun "impropriety" includes "inappropriateness" and "unseemliness", as well as the more pertinent "morally improper conduct". There is a serious argument about whether the concepts of corruption and/or dishonesty should be a requirement of the offence. I think that we need to revisit that carefully.
In one of the leading cases, the Lord Chief Justice, though hesitating over whether dishonesty was essential, handed down a ruling that the conduct must at least have been the "product of an evil mind", which seems to be a distinction without a great deal of difference. Juries understand well what is meant by "dishonesty" and, indeed, by "corrupt". Whatever the Bill says, they will be reluctant to convict an individual unless they are satisfied that the underlying conduct was dishonest or corrupt. Provided that the prosecution can marshal and present the basic facts, the dishonesty or corruption of the conduct usually sticks out like a sore thumb.
There are alternative solutions to the present drafting, at which I hope the Government will look constructively and, if we can do a good job, perhaps favourably. One is the Australian solution, which will be well known to the department. It is not as concise as the present law in England, but it sets out the requirements very clearly and has the support of practitioners with a deep knowledge of the subject. The other is to seek to produce-this may involve some rather hard Christmas work-a shorter opening clause or clauses, amalgamating the provisions of the common law offence of bribery and the statutory provisions of the Acts of 1889, 1906 and 1916, each as amended by succeeding Acts and finally by Section 12 of the Anti-terrorism, Crime and Security Act 2001. There is a great deal of overlap in the wording of those Acts and consolidation is a proper and potentially useful approach.
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