While much of the country was embarking on preparations for the festive season, in December 2014 three company directors were found guilty and sentenced to a combined 28 years in prison for their part in a £23m biofuel fraud. They were also disqualified from acting as directors for a combined total of 40 years and will become the subject of confiscation proceedings and compensation orders.
The Company was Sustainable Growth Group and two of its subsidiaries, Sustainable AgroEnergy plc and Sustainable Wealth (UK) Investments Ltd.
The fraud was the misleading sale and promotion of investment products based on “green biofuel” Jatropha tree plantations in Cambodia.
The relevance of this is that the fraud and the charges included offences under the Bribery Act 2010, which the judge said was an aggravating feature.
Since it came into force in July 2011, there has been a perception in some circles that the SFO has not had the appetite to prosecute bribery offences. Were it needed, this is confirmation that the SFO will prosecute and with the advent of the New Year it is a timely and sober reminder to organisations that engage in business to re-appraise the adequacy of their anti-bribery and corruption procedures.
Organisations in business should know that the Bribery Act 2010 created a number of bribery offences including the offence of “Failure of commercial organisations to prevent bribery”. If a person or corporate performing services for an organisation (an employee, agent, contractor, etc.) commits an act of bribery intending to obtain or retain business for the organisation, or an advantage in the conduct of business for the organisation, then the organisation is also guilty of an offence and liable to prosecution. The offence is one of strict liability (i.e. no knowledge of the offending behaviour or fault on the part of the organisation is needed).
It is a defence to such an offence for the organisation to prove that it had in place “adequate procedures” designed to prevent such persons associated with them from carrying out bribery activity.
Given that it is a time for New Year resolutions, it would be a sensible to include a review, and where necessary an update, of the adequacy of your organisation’s anti-bribery procedures. This should include the following:
- Re-evaluation of the risk model and the nature of your business and the corruption risks that it might be exposed to (e.g. have you started to trade/engage in business relationships in oversees jurisdictions where bribery may be more prevalent? Have you expanded your network and the nature of those you do business with e.g. agents, contractors, a joint venture perhaps?).
- Ensure that a senior individual within your organisation has responsibility for overseeing anti-bribery measures and their implementation. There needs to be top-level commitment to the issue of bribery.
- Ensure that your organisation has a clear, ethical business code of conduct and statement of values which includes an anti-corruption element and that this is well published and understood internally by employees and externally by those you do business with.
- Ensure that there is a clear and well documented gifts and hospitality policy and that there are measures in place to monitor and audit this.
- Where possible, ensure that contracts with parties you engage with contain clauses that expressly prohibit bribery and corruption and include similar clauses in your contracts with employees.
If you implement and document, clear, appropriate and proportionate procedures then if something, or someone, does go awry you give your organisation a chance of avoiding prosecution.
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