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Professor Alan Doig speaks to the Counter Fraud Centre on bribery, corruption and the importance of the Bribery Act 2010
The CIPFA Counter Fraud Centre was named in the UK Government’s Anti-Corruption Plan [pdf] as having a key role to play in the fight against bribery and corruption in the public services.
As part of this role, we have been working with Alan Doig to develop a suite of tools to help organisations tackle bribery. Alan is former Professor of Public Services Management at Liverpool John Moores and Teeside Universities. During his time at John Moores, he set up the first MA in Fraud Management for West Midlands Police, which was then rolled out to other police forces.
In 2008, he joined a European Union project in Turkey on the prevention of corruption. He then moved to South East Asia to work for UNODC (United Nations Office on Drugs and Crime) on UNCAC (United Nations Convention against Corruption).
In this video, we ask him about the UK Bribery Act 2010, how to recognise bribery and the importance of having a robust anti-bribery policy in place.
Corruption is, essentially, the use of your public office for private or partisan interests and a subset of that is bribery as a transaction offence. Corruption can cover fraud, misappropriation, conflict of interest and, in some countries, can even relate to unethical conduct. It is a very broad term.
Bribery is a very specific technical offence. It is a legal definition of a transactional relationship whereby somebody gives, tries to give, or offers to give you something in return for you using your powers of office, to the giver’s advantage.
It is important to legislate for the different kind of offences that can arise. When the Law Commission looked at the existing legislation on bribery, it was very specific, it was about a transactional relationship. It was not about fraud, misappropriation and the other types of offence. If you’re trying to address what you don’t want public officials to do, you have to be very specific in legal terms about what you do and don’t want.
Bribery has always been an issue. Going back to the 19th Century court cases were making it plain that public officials were expected to have certain standards of conduct and behaviour. The courts were very keen to avoid them being tempted to stray away from these standards in terms of their relationships with customers, clients and contractors. So, since 1889, there have been attempts to legally define what you do and don’t want public officials to do, in terms of financial relationships with those that they have dealings with.
Organisations may have a general anti-corruption policy in place, and procedures to deal with conflict of interest, fraud, misappropriation and so on. But it’s important to have a robust policy in place and to make it specific. It’s often very difficult to define what is a bribe, what a gift is and what is hospitality. There is not really any cut off points to say this stops being a gift and becomes a bribe. The purpose of the policy is to make people aware of the risks they might face in terms of their relationships with contractors, developers, customers and so on, and to define what is acceptable and what isn’t acceptable in the eyes of the organisation.
There tends to be a difference between public and private sectors and how they approach bribery. The private sector is very much focused on the legislation, ‘You tell us what we can and cannot do, and we won’t do it, or at least we’ll try and avoid not doing it’. The public sector goes beyond that, it says there are sets of conduct that are not acceptable, leading up to bribery itself, so there are probably much tighter rules on hospitality, and on gifts, across the public sector than there are in the private sector. The private sector is very much driven by what the law says you can and cannot do. The public sector is driven very much about what is acceptable and isn’t acceptable, in terms of official conduct.
One of the problems with defining a bribe, or understanding if someone is trying to bribe you, is this continuum between hospitality, gifts, and bribes. One of the reasons why the public sector has a different approach to the private sector and why there is guidance, policies and procedures in place is that anything that’s offered to you or someone connected to you, or offered to somebody for your benefit that might, or might not, relate to your work but would certainly relate to a customer, client or contractor who has dealings with you, or your department, is a red flag area.
You need to understand that anything, whether people say its hospitality, or a gift, or a bribe, in terms of the current legislation, can be a bribe. The legislation calls it an ‘advantage’ and doesn’t define that. The legislation does not say, ‘yes, we understand the difference between hospitality and a gift, and a bribe’. The legislation very much focuses on what type of obligation you think you might be under as a consequence of receiving something or being offered to receive something and whether you understand that you might be expected to do something on behalf of the giver, or somebody related to the giver. That is all, whether you like it or not, that is covered by the current legislation.
There are a whole range of circumstances whereby you might need to be concerned about whether or not a colleague or somebody working for you could be involved in bribery. It might be things like over close relationships with certain types of contractors or clients or it might be that somebody is having dealings with them outside of office hours. It might be excessive hospitality or it might be that their lifestyle doesn’t appear to reflect their salary or their position. It might simply be because they are in a very vulnerable or risk related post, in terms of the decisions they make, and so on.
How do watch out for it? You have to understand that there are means of monitoring relationships between the potential giver and receiver. You can’t assume everyone is guilty but you have to assume that there should be procedures and controls in place where the risk is greater because of the relationship or the activity, planning and contracting, and so on. You expect to keep an eye on that. You would expect procedures to be in place whereby you could identify the vulnerable areas such as hospitality, after hours contact, and so on.
You can’t assume everyone is guilty but there are a range of issues and red flags that you should be aware of. Staff should feel comfortable to report any areas of concern or relationships that are being developed that they are uncomfortable with.
The qualification is important because it gives you awareness. You will learn to understand not only what the legislation says but what the areas of risk are and also what the red flags might be. It also makes you an intelligent customer. If you receive a complaint or an allegation from someone inside the organisation saying that they have concerns about their own behaviour, or concerns about someone else’s, you will know what you’re looking for.
More importantly these days, in terms of anything that might go to court - because the police are still very interested in public sector bribery - is how you then deal with the information, how you then open the case files to begin the investigation. You need to be an intelligent customer of the legislation and the issues it raises before you can then proceed as an effective investigator.
One of the interesting areas about bribery, as opposed to corruption in its general sense, is the type of activities that are particularly prone. The most common is contracting or procurement.
The most famous case was the Poulson case which began in the 1940s and ran right through into the late 1960s. This concerned a developer that was working on behalf of building companies to identify contracts in the public sector, particularly in local government. The relationship was based around him trying to find out what the council or public sector organisation wanted and trying to tailor his particular delivery and contract to their particular needs, and so on. He developed an over familiar relationship with councils. In many cases he was providing technical expertise that they lacked and they were overwhelmed by his ability to provide everything they wanted. In the end he was running the contracts for them.
There were lots of other cases around that time and this continues to be an area of concern today, with suppliers to big organisations wanting to win and retain business. The Act now covers retaining business, as well as winning business in the first place. It now involves everything from licences, to jobs, to insider information and so on. Any service or function, provided by a public sector organisation, that has a benefit or cost to the external person, is all at risk, be it getting a licence, getting permission or winning contracts.
Very little has changed throughout history and most of the bribery you see today has been happening for the last 100 years or so.
The existing legislation is still extant for cases before 2010/2011 and the enactment of the Bribery Act. The last three bits of legislation, 1889, 1906 and 1916, were all driven by contract bribery and indeed the legislation today is partly driven by that. The Poulson era, combined with a number of scandals involving Parliament, triggered a need to reform the law and make it more comprehensive.
There were also external drivers, with successive British governments signing various bits of international legislation or conventions which required the UK to revise its laws, in particular, revising what is called the ‘jurisdiction eye’, or where bribery can take place. There was a change to this in 2001 but the 2010 Act essentially brought all of this together and cleared up the anomalies of the existing legislation. It widened the jurisdiction globally so that a bribe that takes place overseas can still be tried in UK courts. It also addressed the issue of private sector companies and their ability to demonstrate that if they get involved in bribery, they have adequate procedures in place to try and prevent bribery happening in the first place. This largely relates to the activities of British companies overseas but the legislation makes it applicable to the UK context. That’s unusual, as most countries don’t have that requirement on the private sector. This makes it very important for British private sector companies to have their own set of bribery policies and procedures in place, as well as those in the public sector.