Section 8 of the new Act provides liability to an organisation for all parties associated with it i.e. providing services on its behalf. Now this is very interesting, for two reasons; first because no-one yet knows which parties your organisation deals with might be considered to be associated with it.
We at the BriberyLibrary believe it could be interpreted to include employees and agents, subsidiaries and parents (obviously) but also distributors, consultants, joint venture partners, and maybe even (shock, horror) professionals advising the corporation. What of your business partners’ business partners? If they are doing something on your behalf, you might well be liable for the actions of people you do not even know.
Now this associated liability probably works both ways: associated parties who cross the line could infect your organisation with liability, and you could infect theirs. So both organisations should ask the other to agree to comply with the Act and to demonstrate their own policies and compliance efforts.
So if you were as a business a risk taker and not interested in compliance, this head-in-the-sand view might not last long as the compliance will be forced on you by other more ethical business partners who may just refuse to do business with you otherwise.
Think how many contracting and associated parties you might have as a large organisation, and then think how long this compliance exercise could take!
The trickle down/waterfall effect of the Act is already beginning. As reported recently by The Lawyer, Shell’s chief ethics and compliance officer Richard Wiseman and global legal services coordinator Leanne Geale are asking non-panel firms with which Shell does business for details of their anti-corruption compliance procedures (but why limit it to non-panel firms?). I would wager that there are plenty of big reputable law firms out there which don’t have any anti-bribery compliance systems, unless of course they have some US footprint and are already FCPA compliant. And those that are FCPA compliant will need to upgrade their compliance, as the Bribery Act is wider and deeper than the FCPA.
My ‘waterfall effect’ view was further reinforced when I received an email from my own firm’s US general counsel late one night recently asking me to tell him more about the Bribery Act. Apparently our New York based underwriters are (quite rightly) asking us what we are doing to comply with the new British Act. So its a British Act, but the commercial pressure to comply on our firm (which has offices in three countries) is coming from American underwriters.
So then we will, in turn, ask all our contracting parties to do the same, and so on and so forth.
The Act does truly have extraterritorial reach. Fast forward five years and the waterfall effect will in our view have forced most well run large and medium sized companies to do what is required to comply, whether they like it or not.