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Other matters on which we must focus are the absence of the defence recommended by the Law Commission at pages 128 to 136 of its October 2008 report, summarised at paragraph 7.49, to the effect that the person alleged to have offered the bribe has a defence if they show on the balance of probabilities that they reasonably believed that they were legally obliged or legally permitted to do so by the law of the
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I agree strongly with my noble and learned friend Lord Mackay of Clashfern about the role of the Attorney-General. Noble Lords might expect me to say that. At present, the Attorney-General must approve all such prosecutions. There are not so many that it is an undue burden and I believe that it is beneficial to the proper control by government in its very broadest sense. I draw the distinction between government and the prosecuting authorities, because the Government do not prosecute; it is the independent prosecuting authorities who prosecute. However, it is important that somebody answerable in this House or the other place should have ultimate responsibility for that and should carry it out in as good a manner as humanly possible. Under the Bill, any Crown prosecutor could bring a case. Much more supervision is needed than that. It is not just any Crown prosecutor; it is prosecutors for local authorities and the other major prosecuting authorities.
Your Lordships' Select Committee on the Constitution made a number of points about the security services under Clause 12. Those points have already been extremely well made by other noble Lords, so I will not repeat them, but this is something that has to be looked at with great care. In my opinion, there must be a law officer or a Minister who is answerable to Parliament.
Finally, we need to tackle the problem of debarment under EU law of any business convicted of bribery or of failing to prevent bribery from ever again competing for an international contract. The United States has been praised, to a great extent rightly, for leading the way in 1977 with its Foreign Corrupt Practices Act, but it has since put together a pretty elaborate scheme of pre-contract clearance. Germany, too, has put in quite an elaborate system: if someone looks like being convicted, you then put the case into suspended animation and in a sense put them on probation so that they do not get a conviction and are not prevented-so long as they behave themselves in the future-from continuing to compete. It is important that there should be a level playing field if we are to carry the confidence of the business community. Indeed, the noble Lord, Lord West, accepted that point when I made it in my speech on the Loyal Address. I hope that the Government will be able to say more about it in the course of our proceedings.
I well understand the Government's desire to pass this Bill. I shall do everything that I can constructively to help and, I hope, improve it without delaying it. But a flawed Bill could do more harm than good. I wish it well and look forward to playing a part in the future.
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5.03pm
Lord Williamson of Horton: My Lords, I was a member of the Joint Committee under the able chairmanship of the noble Viscount, Lord Colville of Culross, which made a very thorough examination of the draft Bill, heard many witnesses and published its report in July this year. In consequence, I come to the Bill now before us with some knowledge of the past legislation and the current proposals.
I say to the Minister at the outset that I support this Bill. The Government have done well to tackle the need for better legislation to deal with bribery and I hope that we can complete the examination of the Bill before the general election. In the past decade, since the United Kingdom signed the OECD anti-bribery convention at the end of 1997, there have been a number of reviews of the United Kingdom's bribery legislation, including two Law Commission reviews, as well as the draft anti-corruption Bill in 2003, which was not taken forward. Now we are on much firmer ground and I hope that we can achieve this better legislation.
As this is Second Reading, I shall make some broad comments on the Bill. It is a major Bill and a clean-sweep Bill: it sweeps away entirely the Public Bodies Corrupt Practices Act 1889 and the Prevention of Corruption Acts 1906 and 1916 and replaces the common law offences. Clean-sweep Bills are quite rare-we do not have many of them-but I like them. In this case it was a wise decision to go the way the Government have gone. In place of these Acts, the Bill introduces two general offences: the offence of bribing another person and the offence of being bribed. It abandons the existing agent principal system and establishes a model based on an intention to induce improper conduct. We have to ask ourselves whether this is a better system. I say, unhesitatingly, yes. The existing agent principal basis has given rise to various difficulties in establishing how it applies in particular cases; the system now proposed is direct and more appropriate to the investigation and prosecution of this crime.
Although most attention has been on cases or allegations about large defence contracts abroad, it is important to stress-this has not been mentioned much so far-that the Bill applies fully to home-grown bribery in the United Kingdom as well; its application goes right across the board. That is important. It also responds directly to the criticism of the United Kingdom, notably in relation to the OECD convention, and it should be beneficial to our international standing.
In deciding what is expected of a person performing a function or activity, the test is what a reasonable person in the UK would expect. In a situation abroad, where United Kingdom laws do not apply, local practice and custom are not to be taken into account-this is an important point-unless that is required by the written law of the country in question. The net effect of this change is much stricter than the current arrangements.
The Bill creates two new offences. First, it creates the separate offence of bribing a foreign public official. This is closely in line with the OECD convention, on which the definitions draw. It has a wide coverage. However, it is realistic to recognise that there may be
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Secondly, Clause 7 creates an offence of failure to prevent bribery, which can be committed only by relevant commercial organisations. Companies or partnerships must obviously examine their organisations to ensure that they do not risk breaching this new clause. I expect the first reaction of companies and partnerships to the arrival of the Bill will be to look at their organisation.
The Bill has an extra-territorial application. In general, I do not like extra-territorial application but bribery is perhaps one of the clearest examples of potential offences that cross the territorial divide. Actions abroad are caught by the Bill if the person performing them is a British national, a person who is ordinarily resident in the United Kingdom, a UK incorporated body or a Scottish partnership.
Finally, I have two points that are not in the Bill but which have been discussed already to some degree. First, there is the question of guidance on the Bill. I welcome the Government's acceptance, in their reply to the Joint Committee, that guidance on the Bill should be available to commercial organisations. We may discuss this point and the timing more fully in Committee, but I note that the Government propose to follow the model of the Corporate Manslaughter and Corporate Homicide Act 2007 and are to publish guidance before the new bribery offences come into force. I quote the reply to the Joint Committee and I note that whatever we say in this House always has an influence. The noble Lord, Lord Bach, did not say,
We are always making progress as we go along.
Secondly, I agree with the strict conclusion of the Joint Committee and with the Government that so-called facilitation payments should continue to be criminalised. However, like the noble and learned Lord, Lord Mackay of Clashfern, I have a certain sensitivity about the difficulties of this point. In this respect and in respect of corporate hospitality, it is important that the Crown Prosecution Service should respect very formally the principle of proportionality. This is important generally, but it is also important because the Foreign Corrupt Practices Act of the USA, although it is in many ways an excellent Act, none the less exempts from the bribery prohibition,
This, it is explained in a note from the US Department of Justice, would include such action as payment of bribes for loading and unloading cargo and similar activities. So it is a serious point. At the working level for companies that are perhaps not of vast size but have some external trade or contract, these sorts of payments are important; such companies need to be clear that they will be treated fairly.
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It is unusual to have a Second Reading debate that approximates to a love fest-I am sure that the Minister will take that on board-but this is a very good Bill and I repeat my view that, subject to the comments that I have made and what is going to be examined in Committee, including Clause 12, the Bill deserves to go on to the statute book.
5.13 pm
Lord Borrie: My Lords, I add my welcome for the Bill. So many noble Lords have welcomed it that the last speaker referred to our debate as "a love-fest". I am not sure it is quite that, bearing in mind the number of detailed criticisms that have been made, but this is certainly a more soundly based attempt than earlier ones to create a comprehensive, effective law of bribery. It owes a great deal to the work of the Law Commission, especially its 2008 report with the rather odd title Reforming Bribery. I think I know what they meant; it was just that the semantics were slightly odd. The Government are to be congratulated on implementing a major Law Commission report. The Bill will assist in the battle against bribery in all parts of our commercial and public life. I see it as significant for international trade, where bribery and corruption, if they exist, pollute the very basis of trust and integrity which must underpin healthy, mutually beneficial trading relationships. An expansion of world trade is, of course, highly beneficial to the people of the world, but that must be based on the real value of goods and services, not on backhanders that distort true competition. Clearly, if bribery in global dealings is to be adequately combated, improvements and greater clarity in our law need to be complemented by equally strong measures taken by our trading partners. Hence the importance, as other speakers have indicated, of according with the OECD convention and other conventions against bribery across the world.
This Bill is concerned solely with criminal law, but perhaps I might mention something that I think other speakers have not so far referred to. I hope that Ministers can confirm that the civil law in this country can continue to have its uses in combating and acting as a deterrent to bribery. For example, if there is a contracting party whose agent has been given a bribe to induce him to place the contract with the bribe's donor, the contracting party may sue to recover the bribe and, more importantly, can rescind and remove the effectiveness of the contract. The civil law, usefully, applies irrespective of any proof of corruption.
I believe that the Law Commission was right to concentrate its attention on the value of criminal law in combating bribery. It was also right not only to propose two general offences-which have been described and might be summarised as active and passive bribery-but to propose the new, discrete offence of bribing a foreign official. The noble Lord, Lord Williamson, indicated that there may be problems with the phrase "foreign official", especially if that is defined too narrowly, because in many countries key people who have tremendous influence may not hold an official post that is registered in the local equivalent of Whitaker's Almanac, but are none the less influential. The public increasingly resent any possibility of senior company officers trying to hide behind the corporate veil and
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More controversially, Clauses 7 and 8 create a new criminal offence where a commercial organisation fails to prevent the offence of active bribery committed by someone performing services on its behalf. Parliament is generally more cautious about making a sin of omission a criminal offence, and rightly so, but-as others have pointed out-the organisation will have a defence if it has in place "adequate procedures" to prevent persons down the line associated with the organisation from engaging in bribery. There will be a need for a useful discussion in Committee on the guidance that the Government have said they will offer-and whether unofficial, non-statutory guidance to commercial organisations to assist business is sufficient.
Your Lordships will recall that the Law Commission devoted some 20 pages of its report to justifying this new criminal offence, and it claimed support from the earlier report entitled Business Ethics, Global Companies and the Defence Industry proposed by the noble and learned Lord, Lord Woolf, who spoke earlier in this debate.
The noble and learned Lord's recommendation 9 involves the introduction of a proactive supervisory role at board level over decisions made further down the line that carry risks of unethical behaviour. The noble and learned Lord said that company boards must forbid so-called "facilitation payments". The use of criminal law is justified by the need to deter companies from giving any support to a culture of bribe-taking. The statements of the noble and learned Lord, Lord Woolf, have been given added impetus by the Law Commission report and now by this Bill.
There is only one other matter that I want to mention because it has been referred to by a number of speakers. I was, as I usually am, impressed by the speech of the noble Lord, Lord Pannick. It was a speech of principle. He was concerned with the rule of law. He was concerned that Clause 12 adumbrates a number of defences that would seem to contravene the rule of law and, perhaps even more important as a practical point, that the Government have not really showed chapter and verse what the occasions are when bribes would have been helpful and would have been useful under some sort of public interest rubric.
I was also interested in the points made by the noble Lord, Lord Patten-not at the moment in his place-in which he referred to examples where a bribe is made to an informer for information and some terrible disaster occurs if that bribe is not given. The noble and learned Lord, Lord Woolf, thought that there was something in that-he will correct me if I am wrong-because he indicated that we do not really need these defences so long as the person whose consent is required for prosecution, such as the Attorney-General, is able and entitled, in the public interest, not to go ahead where the public interest suggests that that would be a bad thing to do.
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I welcome the Bill. I look forward to the Committee debates.
5.22 pm
Viscount Colville of Culross: My Lords, I must learn to run rather faster round the corridors of this House because I missed the kind words that the Minister offered me at the beginning of his speech. Thank you for those. As the chairman of the committee, I ought to say thank you to some other people as well, starting with my colleagues. We had two excellent clerks. We had the two professors, who were our expert advisers. We had a first-class back-up team. Where would we have been without the oral and written witnesses, who provided the raw material for what we said? I add to that today's contribution of the noble Lord, Lord Patten-which was backed up by the noble and learned Lord, Lord Woolf-about the way in which corporate ethos ought to be applied to this sort of thing. There was more detail than I have heard before and I would have hoped that it was very useful for the Government. Perhaps this is an occasion when pre-legislative scrutiny by a Joint Committee has proved itself to be a valuable matter.
There have been some comments, particularly by the noble and learned Lord, Lord Lyell-who unfortunately is not in his place-about complexity. Most speakers have not complained about the complexity of the criminal offences that have been, or will be, created by the Bill. I remind the House what happened under the previous law. Professor Horder set it out on page two of the evidence book, stating:
"We started with a law governed by a very vague term, the notion of 'corruptly', and the courts themselves could not agree what that meant in law. There are decisions saying it involves dishonesty, there are other decisions saying that does not involve honesty".
If that is not complex and confusing, I do not know what is. I would have thought it was better to depart from that sort of approach and look at what we have in the Bill.
It is important to have concepts that a jury will easily be able to understand and apply, and it all leads up to that. A jury will have to consider improper performance, and the judge will have to direct them on what that means because there is quite a lot about it in the Bill. The jury will have to look at the question of the good faith of the person providing the funds, and at the expectation point that is set out in one of the clauses.
Complexity could be said to arise from the cases that are listed. Those cases are only examples that the prosecutors will have before them. They will choose one or possibly two of them; they will collect the evidence and decide whether to prosecute and, if so, under what case. They will then draft an indictment with the particulars-in Scotland this would be done by the Procurator Fiscal-and present the case to the jury. On the basis of the facts thus presented, the jury will have comparatively simple decisions to take, and that must be a huge advantage in a matter of this sort. I agree with the noble and learned Lord, Lord Lyell, that one does not want complexity, but that is not written into the Bill at all.
We welcome the Government's response to the Select Committee's report. I am glad that they have dropped the question of parliamentary privilege; the Bill was
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I also mention something that I do not think anyone else has: we now include Scotland. After all, the complaint by the OECD related to the United Kingdom. The original project was only in relation to England, Wales and Northern Ireland, and the Select Committee pressed the Government to see if they could not include Scotland as part of the United Kingdom. This has been done, and I am sure the necessary drafting has been correctly put in.
Then there is the question of Clause 12. I will say no more about that because it is obvious that Committee stage will be much occupied by that point.
I also welcome what has been said about guidance. The way in which companies are going to comply with this legislation is not necessarily going to be immediately obvious to them, and guidance will be very helpful, even if it is not in a statutory form. It must, however, be produced before the offences come into force. That is what the Government have promised, and I am sure that they will do what they say.
The Bill needs to be passed, and I applaud the Government for putting it into the programme for this short Session of Parliament. We have been under criticism from the OECD for a long time for not including anything, including the foreign public officials offence. We now have it for the whole of the UK. Another matter that the Government might like to apply their minds to is whether it can be extended to the Crown dependencies and the Overseas Territories, because they are also under our jurisdiction to this extent and should occupy the attention of the Foreign and Commonwealth Office.
It seems that the Government have covered most of the problems raised by the Select Committee, except for Clause 12. I would suggest to your Lordships that the criminal offences have been very carefully drafted and are workable, and I hope that the House will give this Bill the fair wind that everybody seems to have offered it this afternoon.
5.30 pm
The Earl of Onslow: My Lords, I would first like to say what a privilege it was to serve on the Select Committee under the noble Viscount, Lord Colville of Culross. It was a model of how to run a Select Committee.
We have come an awfully long way from the time when Talleyrand could pocket a third of the proceeds from the Louisiana Purchase, or Lord Clive could stare into Siraj ud-Daulah's treasury and state that he stood astonished at his own moderation. We are, as has been said, a pretty honest country.
I was very interested in what my noble friend Lord Patten, who is not here, had to say about the possibility of the police informer being bribed. I could easily be wrong here, but it seems to me that paying somebody to turn Queen's evidence is not paying him to do something improper but to do something proper. I therefore suggest that the Bill does not cover this. If
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To continue on the issue of trading standards, we have had a continual creeping abuse of power under the Terrorism Act, RIPA and SOCA powers. For example, a person was arrested for taking photographs of St Paul's Cathedral, and I believe the noble Lord, Lord West, was even stopped under Section 44 of the Terrorism Act.
Viscount Colville of Culross: I am involved in running RIPA, the Act to which the noble Earl has just referred. I do not think that either trading standards or the environmental health departments of local authorities would normally be referred to as law enforcement agencies.
The Earl of Onslow: But if I am right, powers derived from RIPA have been used on waste disposal instances. That is what I am complaining about. On Clause 12, the Select Committee report states that law enforcement agencies,
- "include not only the police, but also HM Revenue and Customs and the UK Border Agency, as well as local authority trading standards and environmental health officers".
Those people should not be given the power to bribe. To me, it is as simple as that.
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