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It has been widely reported that British Petroleum (BP) has been
in contact with the Serious Fraud Office (SFO) over recent
allegations of bribery and corruption carried out by one of its
contractors in Azerbaijan. The contractor self-reported incidents
of bribery to the SFO after it came to light late last year. The
name of the contractor has not yet been made public, however it is
understood that the contractor was working on an engineering
project on behalf of BP in Azerbaijan.
Neither BP or any of its employees are believed to have paid any
bribes, however if the self-reported acts of bribery occurred after
1st July 2011, BP could potentially be found strictly liable for
acts of the contractor as an associated person of BP. The Bribery
Act 2010 makes a company criminally liable for acts undertaken by
its employees, its agents and contractors.
Azerbaijan scores poorly on the Transparency International
Corruption Perceptions Index, with a rank of 143 out of 183, 183
being most corrupt. The extent of corruption is so great that it
scores a low 2.3 out of 10 on the corruption perceptions index.
Azerbaijan is clearly a high risk jurisdiction for BP to operate in
and these risks are compounded through the use of third party
entities where there is ordinarily a lack of control in respect of
oversight into their activities.
This is a timely reminder that businesses should be reviewing
all their business relationships with third parties. Contractual
controls should be introduced so that you can sever the
relationship where a contractor is involved in bribery
offences.
Before engaging a third party, all companies should conduct
appropriate due diligence on the third party candidate. This may
involve the engagement of external companies or agents who have
experience in the field. Decisions made in the appointment process
should be recorded as part of the audit trail. Third parties should
be informed of your company's Anti-Bribery Policy, where
appropriate participate in further training, and confirm at least
annually their ongoing compliance.
Third parties, if not carefully selected, pose significant
legal, regulatory and reputational risks to your company.
The material contained in this article is of the nature of
general comment only and does not give advice on any particular
matter. Recipients should not act on the basis of the information
in this e-update without taking appropriate professional advice
upon their own particular circumstances.
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The right of a person to discuss certain matters with their lawyer, no matter how nefarious, without fear of their confidence being broken is one that has been recognised since the 16th Century.
The ramifications for those found to be in civil contempt (as presided over by the High Court), and, in particular, the court’s power to enforce such a finding against a contemnor who resides overseas, are more far reaching than many (civil) lawyers realise.
The Bribery Act has made the news again following the conviction of a would be taxi driver. Earlier this week, at Minshull Street Crown Court in Manchester, Mr Mawia Mushtaq became the second person convicted of an offence under the Bribery Act by attempting to bribe a Licensing Officer.
In the previous edition of Corporate Focus we reported that the Bribery Act 2010 (the Bribery Act) came into force on 1 July 2011 and we considered procedures that commercial organisations could put into place in order to prevent bribery.
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