Melanie Watson 2nd February 2017
A UK court ruled last month that the UK-based engineering conglomerate Rolls-Royce must pay £671 million in order to settle corruption cases out of court.
“We have co-operated fully with the authorities and will continue to do so. The Board has taken extensive action to strengthen ethics and compliance procedures across the company so that high standards of business conduct are embedded as an essential part of the way we do business.”
Rolls-Royce faced 12 counts of conspiracy from the Serious Fraud Office (SFO), which proved it had ‘made corrupt payments’ or failed to prevent bribery in seven countries. The counts included:
- Agreeing to pay $5 million to a state-owned Chinese airline while negotiating the sale of T700 engines. The money was intended to pay for employees to attend a course while enjoying “four-star accommodation and lavish extracurricular activities”.
- Paying agents in Thailand $18.8 million to “act in Rolls-Royce’s favour with respect to a purchase by Thai Airways of T800 engines”.
- Paying $2.2m and giving a Rolls-Royce Silver Spirit car to an intermediary in Indonesia who “showed favour” for a contract involving T700 engines.
The SFO allows organisations to pay huge penalties but avoid prosecution if they confess to economic crimes, such as fraud or bribery.
While this is only the third such agreement from the SFO since 2014, “it shows very clearly that the SFO has teeth and that the SFO will not go away” (SFO director David Green, speaking to the BBC).
Mitigate the risk of bribery in your organisation
The UK Bribery Act 2010 requires most organisations to put appropriate mechanisms into place to guard against the risk of a member of staff bribing a third party. This law aims to do much more than deal with large-scale, multi-million dollar bribes; it is also designed to eliminate lower-level bribery, and affects corporate hospitality, gift-giving and facilitation payments. While large enterprises may be able to afford extensive legal advice to put appropriate safeguards in place, this cost is likely to be beyond the reach of many smaller organisations in the public, private and third sectors.
ISO 37001 is the internationally recognised standard for an anti-bribery management system (ABMS). It sets out requirements to help an organisation prevent, detect and respond to bribery, and comply with anti-bribery laws and any voluntary commitments applicable to its activities.