Logistics companies exposed under UK Bribery Act

August 07, 2012 by Peter MacLeod
Logistics companies exposed under UK Bribery Act

Logistics companies and their clients run the risk of prosecution under the Bribery Act.

Research* carried out by business ethics experts GoodCorporation has revealed that twelve months after the Bribery Act was passed, a significant number of logistics companies appear to have insufficient procedures in place to prevent corruption, which puts themselves and their clients at risk. A third have no published anti-corruption policy or statement and more than half make no statement at all regarding facilitation payments.

This flies in the face of Ministry of Justice Guidance on the Act, which states: “top level management commitment to bribery prevention is likely to include communication of the organisation’s anti-corruption stance.”

The UK’s new bribery law has made it easier for prosecutors to bring about charges, it also demands that businesses be fully accountable for the activities of all third parties and intermediaries working on a company’s behalf.  Directors of businesses that cannot demonstrate that they have taken ‘adequate procedures’ to stamp out corruption, in their own organisation and throughout their supply chain, may be liable to unlimited fines and up to ten years in jail.

Commenting on the findings, Michael Littlechild of GoodCorporation said: “From the work that GoodCorporation carries out in this area, we know that a failure to publish an anti-corruption policy or statement is likely to indicate that little or nothing is being done to prevent bribery. The fact that the multi-billion dollar logistics industry is doing so little of this is worrying. Logistics is one of the most exposed sectors to corrupt activities, with companies in this field often working in some of the world’s most ethically challenging environments.

“This is also of concern for global businesses, as most of them will use logistics companies for part of their operation. By failing to demonstrate clearly that proper measures are being taken to eradicate corruption, logistics companies are putting themselves and their clients, at risk.“

The impact of this is already apparent. In the United States, every prosecution in 2011 under the US Foreign Corrupt Practices Act was related to the corrupt activities of third parties.

And it is not just a fear of prosecution that should be driving change; businesses are losing contracts as a result of investigations into, or suspicions of, corrupt activities.

Littlechild continued: “We advise businesses to work only with organisations with strong and active anti-corruption policies and procedures. This has to include their approach to facilitation payments. These are illegal under UK law, but hard to detect. The fact that more than half the logistics companies in our research made no statement on these payments is a major concern.”

 

 

*GoodCorporation studied the publically available information on Bribery and Corruption of 30 leading international logistics companies

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