Construction firms 'unprepared' for Bribery Act in July

Many small and medium sized construction companies are unprepared for the Bribery Act, which comes into force in less than two weeks’ time, according to a survey.

Law firm Russell Jones & Walker revealed this month that while companies have a broad awareness of the new offences under the act, they have limited knowledge of the details which could leave them at risk of breaching the new legislation.

Results from the survey, which covered the finance and media sectors as well as property and construction, showed that 29% of businesses had put in “an place anti-bribery policy although only 16% were providing anti-bribery training for “relevant staff”. It also showed that 22% of businesses have no plans to implement policies or procedures to take account of the act.

Forty-seven per cent said they were reviewing their approach to major corporate events - specifically MIPIM

However, on the issue of corporate hospitality the construction and property respondents indicated that the act would cause them to change their policies, with 47% saying they were reviewing their approach to major corporate events where hospitality is routinely offered - specifically MIPIM and EXPO.

The act, which comes into effect on 1 July, repeals all the UK’s existing anti-bribery legislation and creates four principle offences of bribing another person, receiving a bribe, bribing a foreign official and the failure of commercial organisations to prevent bribery.

Craig McAdam, a solicitor at Russell Jones & Walker, said: “Because of the long duration of many construction projects, this sector can be viewed as high risk in terms of the potential for corruption. Indeed a number of high profile prosecutions brought in recent years have involved construction companies.

“Risks faced in the sector include the need to operate in high risk jurisdictions, joint venture partners, projects linked to family members of government officials and the requirement to work through agents.”

Rod Fletcher, head of the business crime & regulation team, said: “Businesses cannot avoid the rigorous demands of the act - it demands a change in mind set, risk management tools, policies, training and procedures, and these requirements fit squarely into an international context that is less and less accepting of both bribery and systems that fail to guard against the risk of bribery. Business as usual is no longer an option.”

Individuals and companies found guilty of breaching the legislation could face unlimited fines. Individuals will be liable for imprisonment for up to 10 years; under the current law that is seven. Under separate EU legislation they also face the possibility of automatic and perpetual debarment from tendering for EU public contracts.