Bribery laws – nearly 50% of companies do not vet suppliers’ compliance

New research has revealed that nearly 50% of companies failed to vet suppliers’ compliance with the Bribery Act, which came into force in July 2011.

The research by Ernst and Young found that 48% of “mid-market” firms surveyed (those with a turnover of between £5 million and £50 million), did not check if suppliers were compliant with the law.

60% of those surveyed said they did have processes in place to assess whether suppliers’ business practices complied with the new rules, however 16% said they would do nothing if they uncovered wrong doing.

According to the survey, only 40% of larger firms, with turnovers above £50 million, would remove suppliers from their supply chain if they uncovered evidence of non-compliance.

The Bribery Act created a new offence of failing to prevent bribery by people working on or on behalf of a business, unless the company can show that it has “adequate procedures” in place to prevent bribery. Companies who do not carry out due diligence to ensure that their suppliers are fully compliant under UK law can thus be found guilty under the offence.

Ernst and Young also point out that many directors are still unaware that they can be held personally accountable for breaches of the law. This means that directors and senior managers can risk significant sentences or fines for non-compliance of the Bribery Act, even if the breach is caused by a third party.

40% rise in corporate manslaughter cases

Cases of corporate manslaughter investigated by the Crown Prosecution Service (CPS) have risen by 40% from the previous year.

Since records began in 2009, the CPS has opened 141 corporate manslaughter cases, with 56 currently being investigated with a view to prosecution.

According to new figures, 63 cases were opened in 2012, up from 45 in 2011 and 26 in 2010.

In April 2008 the law was changed which meant that large and medium-sized companies could be prosecuted for corporate manslaughter if deaths were proven to be as a result of negligence by an organisations’ management.

While there have only been three successful prosecutions under the new rules, it is understood that the CPS is ramping up its pursuit of companies under corporate manslaughter charges.

The first successful prosecution occurred in 2011 and related to a death in 2008, with the remaining prosecutions in 2012 relating to deaths in 2010 and 2008 respectively.

The Corporate Manslaughter and Corporate Homicide Act created an offence whereby the Crown will rule on whether the way in which the organisation’s activities were managed or organised contributed to a person’s death, and crucially whether there was a “gross breach” in the duty of care by the organisation to the victim. How the activities are organised or managed by senior management must be a substantial element of this “gross breach.”

Previously companies and public bodies could only be found guilty of an offence if a senior figure, acting as an organisation’s “controlling mind”, was also guilty.

Whistleblowing rules strengthened to protect against harassment from co-workers

The government has announced a strengthening of whistleblowing rules to protect workers who publicly disclose bad behaviour or harassment from bosses or co-workers.

The amendment to the current whistleblowing rules will see employers become responsible for “detrimental acts” of co-workers against colleagues who blow the whistle, by treating those actions as being done by the employer.

The change follows in line with similar provisions already under equality legislation, where employers can be found “vicariously liable” for the discriminatory acts of their employees.

According to the new rules however, employers that can show they have taken “all reasonable steps” to prevent that behaviour will not be liable, the government has said.

Employment minister Jo Swinson said the new protection will place whistleblowers in a better position, while having no impact on “good employers who see it as their responsibility to make sure their staff have a good working environment.”

The amendments will be introduced in the Enterprise and Regulatory Reform Bill which is currently before Parliament.

If passed, the Bill will introduce several changes to whistleblowing rules including replacing the current requirement that a disclosure must be made in “good faith” in order to be able to benefit from legal protections. Instead tribunals will be given a discretionary power to reduce compensation awards where a disclosure has not been made in good faith, while the Bill will also strengthen public interest requirements.