UK companies face ending up on an international export blacklist as a result of coalition government moves to water down the Bribery Act, an international anti-corruption watchdog has warned.
Mark Pieth, chairman of the Organisation for Economic Co-operation and Development’s (OECD) 36-member anti-bribery group, issued the warning after Ken Clarke, the justice secretary, said yesterday that implementation of the Act had been pushed back as a result of intense business lobbying. The government’s ongoing “growth review” will include an assessment of the impact of the new anti-graft rules.
The decision came to light on the same day that John Cridland, the new head of employers’ lobby group the CBI said that the recently passed legislation was “not fit for purpose” as it lacked clarity and could harm British business.
But Pieth told the Guardian that he was “disappointed and concerned” at the prospect of further delays to implementation and that patience was “running out fast” among other industrialised nations. The last Labour government passed the Act only after protracted holdups.
“This move will hurt the competitiveness of British industry at a moment when it is most vulnerable. Allowing companies to continue to generate business by bribery actually weakens their competitive clout as they become dependent on illegal means,” Pieth said.
He added that the OECD had “already threatened to blacklist British companies if they remained under-regulated”, following a highly critical UK inspection in 2008 after criminal investigations into corruption allegations against arms company BAE were terminated by the Labour government.
“Competitors are getting ready to take robust action against the UK in the light of continued lack of compliance with international law,” Pieth said, adding that “the new [UK] law is by no means stricter than the laws of other OECD member states”.
US, French and German firms in particular are thought to be particularly irritated by what they perceive to be attempts by UK companies to steal a march on other countries.
The new anti-corruption regulations were intended to bring the UK more closely into line with the US, which has taken a much tougher approach to rooting out corruption in foreign business deals. They were meant to be implemented in April, but no new date has been set following the latest delay, although the Ministry of Justice has said that the Act will not come into force until three months after any guidance was published.