The reformed UK Bribery Act 2010 introduced Section 7, which directly refers to an organisation's involvement with bribery and corruption offences. Section 7, entitled "Failure To Prevent Bribery," states that an organisation is liable for corrupt activity within their organisation by an employee or associated person, if they cannot prove that adequate procedures to prevent bribery were in place. Consequently, an organisation can face an unlimited fine due to the misconduct of an employee. Therefore, if an organisation wants to protect its financial position and reputation against bribery, then they should offer anti-bribery and corruption training to their employees.
Why is anti-bribery and corruption training important?
Adequate procedures are intended to prevent bribery and corruption from taking place in organisations, therefore it is wise for an organisation to implement them.
The adequate procedures stated in the UK Bribery Act specify that training of anti-bribery and corruption legislation is expected in organisations:
The adequate procedure "Communication" states that an organisation's anti-bribery and corruption policy must be well communicated around the organisation, ensuring each employee understands the legislation and how to comply with it. The most effective way to communicate anti-bribery and corruption policy around an organisation is through training.
The International Compliance Association (ICA) have highlighted that new legislation and organisational policies are reflecting a serious crackdown on bribery and corruption offences. Furthermore, the new legislations which are being adopted by certain countries, such as the UK, can directly impact your business without you even realising. This is because an organisation can fall under the scope of the UK Bribery Act simply through having a footprint in the UK or through dealing business within the UK one time. KPMG, in their anti-bribery and corruption 2016 survey, highlighted that emerging economies, such as China and Brazil, are showing commitment to putting an end to corruption and laundering within the business sector.
Therefore, organisations need to conduct and implement training of their anti-bribery and corruption policy to simply ensure that they are protected against many different legislations which they might be subject to.
Kroll, a corporate investigations and risk consulting firm, issued a 2017 anti-bribery and corruption benchmark report to analyse the rise of reputational risk. This report was intended to analyse why certain corruption risks hadn't been solved, with one conclusion being that training of the company's anti-bribery and corruption policy needs to be better circulated around the organisation. Essentially, the way to do this would be through offering training to employees to educate them on the company's policy thoroughly.
In April 2018 Panasonic, the electronics industry company, was faced with the huge fine of $280 million for a corruption offence which was implicated under the US Foreign Corrupt Practices Act (FCPA). Panasonic were found guilty of violating the FCPA through employing consultants for improper purposes and covering payments which were intended for agents in Asia, which continued from 2007-2016. The FCPA discovered that, although Panasonic had established that some agents in China did not successfully pass the anti-bribery certificate, Panasonic executives re-hired these Chinese agents as subcontractors, despite them not being certified. Furthermore, these Panasonic employees were exposed for protecting $7 million worth of payments to approximately 13 people. The FCPA's discovery of Panasonic's misconduct led to fines of $143 million directed to the SEC, then $137.4 million directed towards the US Justice Department.
It is clear that if an organisation does not prevent bribery or corruption from occurring, then there is potential for severe repercussions. Therefore, an organisation must offer training to their employees to mitigate the risks of bribery and corruption from occurring within the organisation. This is becoming even more vital now that anti-corruption is becoming a critical field in business.