Examination of Witnesses (Questions 720-739)|
11 JUNE 2003
Q720 Lord Campbell-Savours: Mr Cridland,
what would your view be on the question of policy on that issue
of transparency? Small facilitation payments and the possibility
of a greater regime of transparency in relation to particular
Mr Cridland: We are trying to
build a construct here derived from practical experience of our
member companies. So, the experience that Andrew described is
very relevant here. On that basis, we are fully supportive of
disclosure because clearly, every time one of these payments becomes
an issue, the questions that other members of the Committee have
raised are an issue for the relevant management as to which side
of the line it falls. Therefore, there should never be a case
where this is simply dealt with with some cover-all excuse that
it is a facilitation payment. The procedure Andrew describes is
Q721 Lord Campbell-Savours: I thought
he was talking about this statement made by the Chairman.
Mr Cridland: The chief executive
of the relevant business unit, the signing off. There is usually
a cascade system of signature saying, "In the area for which
I have responsibility, I have checked what has been done and there
is no bribery."
Q722 Lord Campbell-Savours: My question
is more specific to particular contracts. Is there room there
Mr Cridland: Are you meaning public
disclosure, disclosure outside the business?
Q723 Lord Campbell-Savours: Yes,
Mr Cridland: I think we would
be prepared and happy to consider that. I think clearly it raises
a lot of issues of proportionality. If we achieve the objective
that we are seeking and we are talking about a £100 or a
£50 payment, then actually the appropriate place for that
to be dealt with is within the business unit. Where it cascades
upwards is if it influenced the size and nature of the contract
as a whole, then there would be a case for public disclosure.
At that point, to be honest, I think we would be back to the fact
that the outside of the remit are the sort of things that we consider
as facilitation payments. There is no objective in raising this
issue and I agree with Andrew in the sense that because of the
way in which the conversation has flowed, it has developed an
importance which is out of proportion to the position it has in
our evidence. There is no wish here by the CBI to use this to
drive a "coach and horses" through a position which
is that corruption is abhorrent and corporations should have management
practices that ensure that their operatives fall within the law.
Q724 Lord Campbell-Savours: However,
you have sought an exemption.
Mr Cridland: We have sought an
exemption. We seek a ministerial reassurance that criminality
will not be applied to matters of this kind on a de minimis
Q725 Chairman: It is one thing for
management to have to decide whether something is an acceptable
facilitation payment is good business, good management. It is
a different problem when the jury has to decide whether a facilitation
payment is in fact corrupt.
Mr Cridland: Yes.
Q726 Chairman: That is a very different
sort of question because the act has to cover both.
Mr Cridland: Indeed, forgive me,
and that is why we believe that this matter needs explicit coverage
in one way or another in statute or the process of statute.
Q727 Lord Carlisle of Bucklow: In
your paper, you argued very persuasively for the fact that there
should be exemptions not only for facilitation payments but also
for corporate hospitality, for promotional functions and for offset
payments. Yet, when we look at the individual ones, for example,
we have looked at the question of facilitation payments, I think
you will agree that one immediately runs into definition difficulties
in defining what is a facilitation payment. If instead we took
the other view which you commend and put the word "improper"
before the word "advantage", would that not cover all
the things you are concerned about and do you actually think yourselves
that either a prosecutor, a juror or a businessman would have
any difficulty in understanding what the word "improper"
Mr Cridland: We believe that using
the word "improper" would considerably strengthen the
Bill and considerably aid in its understanding particularly in
the lay community. I think we go beyond that to say that some
of the specific matters need dealing with more clearly than have
been dealt with to date. We leave it to yourselves to design a
way in which to do that.
Q728 Chairman: You said that your
task is to solve the problem. Do not feel reluctant to suggest
definitions in drafting if you have ideas in your mind. We should
be only too glad to hear them.
Mr Cridland: I am trying to give
perhaps too clever an answer and say that we would like our cake
and eat it. We would like "improper" and we would also
like some of these matters clarified either by exemption or by
Q729 Lord Carlisle of Bucklow: But
Mr Berkeley himself said that there would be difficulty writing
into a Bill a quantitative test.
Mr Cridland: We are not saying
Q730 Lord Carlisle of Bucklow: I
have faith enough in juries to believe that, if you ask a jury
a question, "Was that payment improper?" they will know
what is meant by that. They will know whether it was improper
when it was £100,000 as against £50. I just wondered
whether in fact that sort of approach would meet many of your
problems under this Bill.
Mr Cridland: It would certainly
go a long way. I think that we would need to consult further as
to whether our member organisations felt that the Bill that might
result from your deliberations better satisfied them. At the moment,
I have to say that there is a relatively high level of concern
about the inadequacies of the Bill and therefore we are seeking
to build in as much reassurance and confidence building as we
can. We would be very happy to present a slightly different Bill
to the membership and see if it passes their test of clarity and
Chairman: Just before you come on to
another matter, Mr Stinchcombe, do you want to pursue anything
else? I know that you wanted to pick up on this point.
Q731 Mr Stinchcombe: Very interestingly,
you have used the word "improper" as part of the inflection
of the meaning of the words "corruption" and "corruptly".
You previously, in answer to questions by my colleague Vera Baird,
looked at the intention of the person who might be making the
payment or doing the act. How do you actually define the word
"corruption"? Does it, to you, import always an element
Mr Berkeley: Perhaps this is a
major doubt about the Bill. It seems to us that the Bill at the
moment does not have this element of requirement for dishonesty.
In fact, in the Home Office's commentary, I think it says specifically
that dishonesty is not a necessary ingredient of the offence.
We feel that, as regards the industry, managers, people working,
the ordinary person and the ordinary businessman, if it were made
clear that it is dishonesty and that dishonesty is part of the
thing, this would be a much more powerful tool than the rather
abstract scheme which exists at the moment.
Q732 Mr Stinchcombe: You wish to
see some specific reference to the moral wrongness of the act
as part of a defining element of the offences?
Mr Berkeley: Precisely.
Q733 Mr Stinchcombe: And it would
not worry you that the word used, whether it be dishonest, wrong
or whatever, might have around it some blurred?
Mr Berkeley: We have suggested
"improper" merely because that is used in the OECD Convention
and we have also mentioned "undue" because that is used
in the Council of Europe Convention.
Q734 Chairman: Is the objective in
a corruption case to tackle what is immoral or what is illegal?
Mr Berkeley: What one is saying
is that it would be more effective if the wording of the Bill,
while of course being legally adequate, nevertheless mentioned
something like "undue", "improper", or some
note of moral condemnation.
Q735 Lord Carlisle of Bucklow: This
Bill, as drafted, allows the defence that a person cannot be guilty
of corruption if his principal consents to what he has done. Are
you happy with that as a defence or not?
Mr Campkin: Yes, I think that
on balance we are.
Chairman: We have three different offences:
1 and 2 which fall together, and Clause 3 of the Bill is a different
sort of offence.
Q736 Mr Stinchcombe: You criticise
the Clause 3 offence in paragraph 17 of your evidence, saying
that it seems to make an act criminal before even an advantage
might be being conferred and merely because of the hope that it
might be conferred. I wonder if I might tease out from you exactly
what your objections are. The Clause 3 offence is further clarified
by Clause 10. You have to take the two together rather than in
isolation. Taken together, it seemed to be targeting those acts
whereby somebody dishonestly performs their functions, for example
as an agent, in the expectation that some corrupt advantage will
be conferred at a later stagewhether it be a ticket to
Wimbledon or whatever. If it is the moral wrongness of the act,
the breach of the duty, with which we are concerned, I wonder
why you say that should not be criminalised. I wonder further
whether it is not criminalised in any event as being an attempted
offence of corruption.
Mr Cridland: Perhaps I may just
make a general statement about that and ask Andrew to give a more
legal perspective. The concern of our member companies on Clause
3 derives from the way that, over the last several years, they
have been trying to evolve sensible policies which have statements
of clear intent: "We will not accept any bribery or corruption
in this business. It is a sackable offence", down to, "Living
with the world as it really is, dealing with some very tough and
dubious situations and borderline issues". The concern of
many of our member companies is that, because Clause 3 talks about
"in hope", it is very difficult to apply management
policies and practices to it; that it will lead to endless debate
within the business; that there is too much ambiguity. That is
the concern. If a way can be found in which Clause 3 can be tightened
up to reduce the ambiguity, I do not think that it is the CBI's
wish or intent to seek to invalidate the clause.
Mr Berkeley: If I may say so,
perhaps you suggested the answer to the question yourself at the
end of the question. You said, "Would it not be an attempt?".
Our point is that Section 2 is probably enough, if you also bring
in the notion of an attempt under Section 2. We therefore question
the necessity for Clause 3. To go back to a more practical illustration,
supposing that, in a company that is trying to do a negotiation
with another company to have something done, the executive of
this company comes back to the office one day and says, "Do
you know, I think Jimmywhatever-his-name-is from that other
companyis after something. He's after a bribe, I think".
Nevertheless, we do need this equipment. Should I, for that reason,
break off negotiationsalthough the company actually needs
to do the deal? How is management, in the face of that, to deal
with the situation? Is it going to say, "Go on with it"?
He may be after a bribe, and that is an offence. Then the man
from our company says, "But that would make me some sort
of accessory to an offence under Clause 3". We think that
(a) it is not necessary and (b) it is very difficult to manage.
Q737 Mr Stinchcombe: I think that
the answer the draftsman of the bill would give to the latter
point is that he has not used the word "hope", but he
does invite the jury in due course to come to a conclusion as
to what was the primary purpose of the ultimate act. Does that
Mr Berkeley: The word "hope"
was used both by the Law Commission in its analysis which led
to this clause and I thinkI may be wrongthat it
is also included in the explanatory memorandum which is attached
to the Bill.
Q738 Mr Stinchcombe: But it is not
actually in the words of the legislation itself, is it?
Mr Berkeley: No, it is not actually
in the words of the legislation itself. If it were, it would be
the first time one of the three Christian virtues of faith, hope
and charity was made a necessary ingredient in a criminal offence!
Q739 Mr Stinchcombe: And those words
that make you look to the primary purpose of the act or omission
in question do not reassure you?
Mr Berkeley: I must be frank and
say that they do reassure me to a certain degree. That is true.
Chairman: We are getting a picture and
obviously, at the end of the day, the question is what this Bill
means and what effect it will have.