Blog: Self-reporting scheme helps us to get tough on contract corruption

In recent days, the Civil Recovery Unit has agreed a settlement that will see £2.2 million paid into a fund that will benefit communities across Scotland.

That sum represents the proceeds of commercial contracts obtained by Braid UK as a result of dishonest conduct which fell afoul of antibribery legislation. In reaching this settlement, the company has completed a process which begins with stepping forward to admit responsibility and ends with the proceeds invested into Scottish communities.

The Bribery Act 2010 is a powerful piece of legislation and since the Act’s inception, a specialist team within Crown Office’s Serious and Organised Crime Division (SOCD) has worked to deploy the provisions, aiming to strengthen Scotland’s business community against corruption and to target such practices where they arise.

The Bribery Act obliges commercial organisations to act to end bribery. Where a business fails through the absence of adequate procedures to prevent bribery, that business commits an offence. Potential fines are unlimited. While the problem is by no means prevalent, SOCD aims to encourage a culture where bribery is not tolerated and never concealed.

Since the implementation of the Act, the Lord Advocate has approved an initiative allowing businesses to report offences which they themselves have committed. Under this selfreporting scheme, corporate entities must disclose the extent of all bribery and corruption offences to Crown Office, via their solicitor. The business should have conducted an investigation of its own, and the resulting report must be provided to SOCD. They must also evidence what action has been taken to prevent a recurrence.

Self-reporting is not a “soft option”. The public interest will dictate what action is taken by SOCD but by coming forward, businesses can show they are taking action pro-actively against bribery. In many cases, criminal proceedings will be warranted. Courts will recognise the steps taken by the business in coming forward and admitting responsibility and credit will be given for saving the costs of investigation to the public purse.

In other cases, civil settlement may be appropriate. The sanctions will still be severe, but will be civil rather than criminal. Specialists in the Civil Recovery Unit will assess the case and, if deemed appropriate, civil settlement will be reached with no recourse to criminal prosecution.

The settlement with Braid UK is the most recent in a line of cases. Back in 2012, Abbot Group Limited agreed to pay £5.6m after they admitted having benefited from corrupt payments made in connection with a contract entered into by one of its German subsidiaries to supply drilling rigs to a Russian company.

More recently, the Civil Recovery Unit recovered £172,200 from International Tubular Services Limited, which benefited from corrupt payments made by a former Kazakhstan-based employee to secure additional contractual work from a customer in Kazakhstan.

In both cases, the companies met the strict self-reporting criteria, including taking steps to implement comprehensive anti-bribery policies and training to ensure no unlawful conduct will take place in the future.

Sanctions might not end with the business itself. Individuals, including directors, officers and other staff, may be considered for their part in any criminality. The first such prosecution has been concluded and SOCD is currently considering raising criminal proceedings against a number of other such individuals, for offences under the Bribery Act, following reports.

The purpose is to encourage corporate entities to disclose previous criminality before they are found out, with the result that Scotland’s business community is one which operates on a level playing field. The sanctions will always be tough, but by coming forward, a business can find credit, show contrition and demonstrate such conduct will not be allowed to happen again. It is hoped this initiative, which currently runs until the end of June with the potential for further extension, will contribute to a sound business culture and encourage businesses to protect themselves against the dangers of bribery and corruption.

This article first appeared in The Herald.