Bribery Act 2010: Post-legislative Scrutiny (Select Committee Report)

Lord Hain Excerpts

Wednesday 3rd February 2021 Grand Committee

[Lord Hain (Lab) [V]]

My Lords, I thank the noble and learned Lord, Lord Saville of Newdigate, for his instructive introduction and welcome the report of the committee.

The international scope of both the UK Bribery Act —introduced by Labour when I was a Cabinet Minister —and the US Foreign Corrupt Practices Act is important, with anti-corruption campaigners reporting a continuing rise in global bribery and corruption. For instance, Goldman Sachs has agreed to pay $2.9 billion, or £2.2 billion, to settle a US-led investigation and its Malaysia division also agreed to plead guilty to violating foreign bribery laws linked to the alleged looting of the country’s sovereign wealth fund, 1MDB. Airbus had to set aside $3.6 billion last year to cover settlements with authorities in the US, France and Britain after admitting it had paid huge bribes on an endemic basis to secure contracts in 20 countries. Furthermore, the Covid-19 pandemic has opened up opportunities for bribery and contracts for cronies worldwide, including in Britain where an uncommon number of ministerial mates seem to have benefited.

Nevertheless, as the committee reported, the Bribery Act does not seem to have prejudiced UK business. Perhaps, as the noble Lord, Lord Gold, suggested in a recent article, the Act has resulted in companies improving their governance and compliance by not using third-party agents and therefore, as he wrote, has,

“frightened many companies into honesty”.

However, perhaps the strikingly low rate of prosecutions under the Bribery Act, as the committee pointed out, is because of the slow pace of bribery investigations, with a number of witnesses criticising the time it had taken for bribery charges to be brought and cases to reach trial. The committee rightly recommended that the director of the Serious Fraud Office and the Director of Public Prosecutions publish plans outlining how they will speed up investigations into bribery and improve communication with those placed under investigation for bribery offences.

However, is not the real problem that there are simply not enough resources being invested by the Government into enforcing the Bribery Act and money laundering legislation? Enforcement and investigative agencies, such as the Serious Fraud Office, the National Crime Agency and the Financial Conduct Authority, require proper resourcing to utilise the legislation to conduct investigations—some very complex—and bring prosecutions. Yet across the world that has not been the case. In the UK, these agencies have not had anything resembling the resources required to combat financial crime in recent years, leading to a request in 2019 from the head of the National Crime Agency for an additional £2.7 billion in funding for that agency alone. That is just one of the agencies involved in combating bribery requesting an additional £2.7 billion to enable it to do its job properly. No wonder London is regarded by many as the money laundering centre of the world, where the legislation is stringent but the enforcement and policing is certainly not.

As I demonstrated in debates in 2017-18 in your Lordships’ House on the Sanctions and Money Laundering Act, London-based global corporates such as HSBC, Standard Chartered and Baroda Bank facilitated massive looting and money laundering from South African taxpayers under former President Zuma and his cronies the Gupta brothers. London-based corporates McKinsey, KPMG, and Bain & Co admitted to raking off multi-million fees from President Zuma’s regime, its state agencies and state-owned enterprises. So guilty of complicity in corruption were these corporates that, when it was exposed, they sacked their top South African-based executives and made promises to pay back millions of fees they had received.

Why, however, were they not prosecuted in London under the Bribery Act? Is it because, like another London-based corporate guilty of whitewashing corruption and securing a lucrative fee, Hogan Lovells, the international law firm, told the Solicitors Regulation Authority that their South African arm enjoyed the same name only for “branding purposes”, and that London bosses were therefore not culpable in any way? You could have fooled me looking at their website and their activities internationally: they are a global corporate like the others that I have named. Surely corporates operating from London should be bound by the Bribery Act. Otherwise, people will ask: is it worthless? I hope the Minister will reassure me on these questions and I will be interested in any observations by the noble and learned Lord, Lord Saville of Newdigate.