The Bribery Act 2010: The Role of Anti-Bribery Training in Demonstrating Adequate Procedures

The first test of the “adequate procedures” defense under the UK Bribery Act highlighted the importance of anti-bribery training for businesses. In this blog post, we explore why effective elearning is so important to companies looking to avoid risk and ensure rigorous compliance.

When a court declared interior design company Skansen Interiors Limited guilty of bribery earlier this year, the finding had serious ramifications for the company’s directors and the wider compliance landscape.

At the center of the trial, the business’s former Managing Director was found to have paid a total of £10,000 in bribes in 2012 and 2013¹. The recipient was a project manager at an organization in charge of awarding contracts relating to prime commercial property in London. Skansen won contracts totaling more than £6 million, and a further bribe of £29,000 had been offered to the project manager².

The potential misconduct was only discovered when a new chief executive joined Skansen in 2014³ and filed a Suspicious Activity Report (SAR). The outcome of this case highlights a number of critical compliance lessons for companies.

Adequate Procedures in Action: A Defense Strengthened by Proper Anti-Bribery Training

The Skansen case is the first time a company has attempted to defend bribery charges in court using the “adequate procedures” defense, and the ruling sets the bar high for success. Writing in the introduction to the updated legislation, Kenneth Clarke, the then-Secretary of State for Justice, called bribery a “scourge” and the legislation “an important step forward”⁴.

Having been charged with the Act’s Section 7 corporate offense of failing to prevent bribery, Skansen pleaded the Section 7(2) defense of having adequate procedures in place. Skansen believed it had enough mitigating factors to make its case successfully.

These included:

• Making the Suspicious Activity Report to the National Crime Agency and filing a report with City of London Police
• Questioning and stopping the proposed further payment to the awarders of the contracts
• Launching an internal investigation and establishing a new anti-bribery and corruption policy
• Cooperating with enforcement authorities
• However, the measures the company had taken proved insufficient.

Interestingly, Skansen was a dormant company at the time of the court case. Despite this, the Crown Prosecution Service decided that the public interest test for a prosecution was satisfied so that a message could be sent to other organizations.

So what can we learn from this case? Let’s review.

1) Keep Anti-Bribery Training Up-To-Date and Continuously Communicated

Anti-bribery training is a vital tool for ensuring compliance. In the case, the prosecution focused significant attention on the lack of records evidencing the organization’s efforts to embed a compliance culture—specifically the lack of training records.

It is essential that compliance training, including eLearning, is kept up-to-date to reflect the latest knowledge and keep training fresh.

Skansen had a series of historic policies encouraging staff to ensure their third-party dealings were conducted with transparency and integrity. Tellingly, though, the company had no specific anti-bribery policy in place at the time of the misconduct. The outcome provides a powerful reminder that frequent and effective training on organizational values and anti-bribery and corruption policies are a fundamental part of “adequate procedures”. This includes ensuring that all employees fully understand their individual responsibilities in this area.

2) Self-Reporting Does Not Atone for a Lack of Anti-Bribery Training

It is critical that companies and individuals are fully aware of how to report potential non-compliance. However, financial authorities have stressed that internal and external disclosure alone cannot protect organizations.

Deferred Prosecution Agreements (DPAs) have been secured by some organizations who have self-reported incidents, but the most major cases of these have still seen huge fines implemented. Rolls-Royce, for example, paid £497 million⁵ in respect of bribery and corruption.
Skansen’s full cooperation with investigators, including supplying confidential and legally privileged documents to police, was insufficient to prevent prosecution.

3) Anti-Bribery Training Cannot Be a Reactive Process

Successful anti-bribery training teaches employees the systems and controls in place to deter and deal with non-compliance. When people know the potential risks and the steps they can take to correctly navigate them, any potential problems are much more likely to be dealt with at the earliest possible stage.

In the case of Skansen, who had a team of fewer than 30 employees in a small open-plan office⁶, implementing a strategy to ensure compliance across the organization could have been a relatively straightforward process. Without this, they were forced into a reactive approach, and the price was non-compliance and prosecution.

Implementing a policy and stopping payments after acts of bribery have been committed falls a long way short of the approach required to prove adequate procedures. Working ahead and using anti-bribery training to create a strong foundation of knowledge can go a long way towards preventing major problems in the future.

Would Your Organization’s Anti-Bribery Training Convince a Jury?

For small organizations, a specific, robust anti-bribery and corruption policy is essential in order to meet the “adequate procedures” test. Even at large corporations, long-established policies and dedicated financial crime and compliance departments are no guarantee of compliance. Success depends upon being able to clearly evidence a culture of compliance and training.

At LEO GRC, we specialize in giving staff at all levels a comprehensive, practical understanding of the knowledge and behaviors needed to meet compliance requirements on a day-to-day basis.

In effective anti-bribery training, this includes:

• Providing learners with a broad overview of the basic elements of compliance and non-compliance
• Showing learners where the risks lie in their role and improving their judgment and understanding
• Giving employees the confidence to raise and escalate potential issues

We’re constantly assessing how to give our clients and their learners experiences that embody their company values and ensure they are inspection-ready.

Meeting Bribery Act Requirements Through a Strong Learning Strategy

As we’ve seen, in the face of potentially severe risks, a focused, proactive approach to continuous anti-bribery training is the best way for firms to protect themselves. The reward is an alert workforce acting collectively to prevent compliance problems and training that can be demonstrably shown to have worked.

Our anti-bribery and corruption courses are also an ideal way to provide high-quality anti-bribery training across a range of sectors. To find out more, visit our full catalog of off-the-shelf courses.