Enforcing foreign bribery: notes on some of the key issues

Gillian Dell, Programme Manager for Transparency International’s programme on international anti-corruption conventions joined the International Bar Association  conference on foreign bribery enforcement last week. Here’s what she reports back:

What happens if you get legal practitioners, consulting company representatives and company compliance officers to discuss corruption?

Deflating the anti-corruption giant: cartoon by Mehedi Haque (Bangladesh)

Last week, 20-22 September, I attended a lively International Bar Association (IBA) two-and-a-half day conference entitled “The restless giant of anti-corruption enforcement” in Prague on foreign bribery enforcement. Some of the issues addressed turned around multi-jurisdictional investigations and prosecutions, anti-corruption enforcement in the UK, prosecutions against individuals, and assessing the OECD Anti-Bribery Convention after 10 years. I’d like to share with you a couple of issues or trends that dominated the meetings.

We may be seeing a developing trend that can be traced back to the Lesotho Highlands Water cases begun almost ten years ago, where it is the  developing country that takes action against foreign companies.

Just this week, for example, in Nigeria the Attorney General and Minister of Justice were reported to have entered a US$ 29.5 million settlement with Julius Berger relating to bribery in connection with construction of the Bonny Island liquid natural gas facility. Newspapers also report that the Federal Government is planning to sue Halliburton for US$ 2 billion in the United States for bribes paid by the company in Nigeria. This is reminiscent of  the Iraqi government’s US$ 10 billion lawsuit in the US against dozens of companies for alleged damages in connection with the UN Oil-for-Food programme.

This refers to the whole issue of “social damages” where those found guilty of corruption are made to pay to  repair the damage caused to a society such as the example of Costa Rica’s “social damages” settlement with Alcatel earlier this year and the Bahraini government’s ongoing civil damages suit against Alcoa.

Another issue that is increasingly being discussed in these fora is foreign bribery enforcements against individuals, some of which have resulted in relatively long sentences. US lawyer Joseph Warin of Gibson Dunn discussed the controversial and long-running Giffen case involving alleged oil-related bribery in Kazakhstan, that sputtered to an end last August when Jim Giffen agreed to plead guilty to a tax-related misdemeanour plea and the corruption charges were dropped. Whether these kinds of settlements are acceptable stands on another page.

This discussion turned to Germany, where prosecutors have found it helpful to charge individuals rather than companies since companies are only administratively liable and not criminally liable. According to German lawyer Sabine Stetter, this provides criminal investigation channels that are far more likely to yield a successful prosecution.

In my next post, I will look at the discussions around the new UK Bribery Act and how people thought this would affect companies and business.