Transparency International Anti-Bribery Training Launch
At The Law Society, 113 Chancery Lane, London WC2A 1PL
Wednesday, 18 January 2012
How effective is anti-bribery training?
Speech by Richard Alderman,
Director, Serious Fraud Office
Good morning everyone and welcome to the event this morning. I am very grateful to Robert and Chandu from TI for inviting me here to join you this morning for the discussion that we are going to have. I am also very grateful for the opportunity to say a few words by way of general introduction.
It is very tempting at this time of the year to do what many others are doing and to provide forecasts of what is likely to happen in 2012. Curiously, perhaps, few people at the end of a year look back at the forecasts made at the beginning of the year to see how accurate, or not, the forecasts were. Perhaps this is just as well. Who would have forecast in January 2011 that we would have seen the events that we witnessed during the year. Of course, I refer in particular to the Arab Spring. What has also been very novel and noteworthy has been the prominent role that social media are playing now in many other countries in the fight against corruption. I do not recall anyone talking about any of this 12 months ago.
With the need for humility in mind, therefore, I am not going to comment on the discontinuities that might happen in 2012 but I will talk about some trends that are currently happening and I see developing further this year.
The first is this. The fight against corruption took a very major step forward last year. We saw a very visible demonstration of the fact that the citizens of corrupt countries do not want to see corruption as part of the culture of their countries. They are fiercely resistant to paying amounts of hard earned money to obtain the services they are entitled to and for which they already pay taxes.
There are lessons here for governments as well as for individuals and companies that invest in countries with corrupt institutions. The possibility of regime change needs to feature in their risk assessments.
What we have seen as well is that citizens of these countries are looking for more information. Indeed more transparency. They want to know more about where their money goes. This is a trend that has started but to my mind still has a long way to go. Citizens want to know far more about budget setting by authorities at all sorts of levels in countries from central government to local and district authorities. They want to know how that money is being applied. There will need to be much greater openness by Governmental authorities and indeed others in this area linked perhaps to the need for legislation about the citizens' right to information and effective enforcement of that right.
We all know that transparency is the best way of exposing abuses wherever they are. I see more coming to light as a result of this trend in 2012.
The next trend is also one that is happening but where I think there is much more to come. This involves the role of business in fighting corruption. Businesses can be in the front line here when they seek to do business in other countries. Their employees are asked for bribes, whether large ones to secure contracts or small ones to get Government services.
I see businesses playing an ever increasing role in recognising that they have to do something themselves about the demands for corruption. I have seen a number of initiatives by business people in this area. They come to talk to me about this and about what they are doing. I am always very interested in what they tell me.
I detect though nervousness on the part of business initially in having these discussions with us and also nervousness about how they discuss these issues with NGOs or indeed about what the NGOs might say about them in public.
We have been developing our relationship with business over the last few years and there is now a much greater readiness to be open with us about what they are doing and to seek advice. I wonder though whether there is more that the NGO community should be doing to engage with and support business in these very difficult circumstances. NGOs have a wealth of experience in dealing with these issues. They also have a very high and deserved public reputation. The public trust them. I would like to see more coming together of businesses and NGOs in this area because after all they are trying to work to the same objective.
One further trend will be the actions of the SFO. Many of you will have seen the press coverage last Friday of an innovative result by the SFO in which we focused on dividends paid out by Mabey & Johnson to its shareholders. We recovered a portion of the dividends.
I am glad to see that Peter Lloyd is here this morning. It will be very interesting to hear Peter's comments on this. From my perspective, Mabey and Johnson have behaved in a very proper and ethical way. I believe that they are a stronger company as a result and that they are better placed to win contracts and earn the profits that we all want to see as a country. It is an example that I would commend to other corporates.
I was very interested to see the commentary on the decision. One comment, for example, by the distinguished academic and practising lawyer, Professor Jonathan Fisher QC, was that the SFO was pushing the law to the limits. I was in fact very pleased with that comment. I see the powers that we have been given as being powers to do justice. They are not just formal rules; they are there for a purpose and that purpose is justice. If justice means that we should be pushing the legislation to its limits, then so be it. There are other cases we are looking at where we shall do this again.
There were other comments as well on how wide this decision went. Also, there was criticism about what was seen as a further burden on shareholders, particularly institutional shareholders. I have to say I do not understand that.
Institutional shareholders are not just passive recipients of dividends; they also have regular discussions with the management of the businesses in which they hold shares.
I am going to have discussions soon with representatives of institutional shareholders. I am going to ask them whether any of them have asked management if they are satisfied that their companies have adequate procedures under the Bribery Act. If they have not asked that question, I shall want to know why not. After all, we all know that a corruption investigation can have a devastating effect on the share price of a company. If institutional shareholders are not concerned about that, then it seems to me that they are not living up to their ownership responsibilities and are not doing what society expects from them.
My final trend concerns training. I have been very pleased to see the way that businesses have been investing in more training for their employees on corruption. I encourage this very much and I have been very pleased to see the way that TI have been able to assist in this area themselves with their help on training. This follows on from the excellent publication by TI on adequate procedures. I welcome what TI is doing in this area and I am looking forward to what Robert has to say to us.
Sometimes people say to me - 'Have we done enough in our organisation?' The answer to that generally, looked at in some absolute manner, tends to be 'No'. After all, if somebody says to me - 'Am I content that the SFO has done enough' I would say 'No'. There is always more that can be done.
On the other hand we live in the real world and we all have pressure on budgets and we all have lots of work to do. My answer in terms of the SFO would be that there is lots more that we can do and a lot that I would undoubtedly want the SFO to do and that we plan to do in the future. However, looking at where we are at the moment, I would take the view that we have done as much as we reasonably could with the resources at our disposal and bearing in mind all of our various responsibilities.
If a CEO of an organisation said this to me about their approach to anti-corruption, I would have every sympathy because that is, after all, the environment in which we all work. It does not mean complacency and I would certainly expect to hear from the CEO about plans for the future. The fact though that there are plans for the future does not mean that what is being done at present is necessarily inadequate and unacceptable. Far from it. All it means is that this is a journey that we are all on and we all need to make progress from year to year.
Thank you for listening to me. I shall pause here because we have an interesting session ahead of us. Let me thank you for everything that you are doing in working against corruption. There is no doubt in my mind that what you are doing is making the world a better place.
