Anti-bribery Clause Employment Contract
An anti-bribery clause employment contract is the result of governments wishing to take a tougher stance against bribery and corruption.3 min read
An anti-bribery clause employment contract is the result of governments wishing to take a tougher stance against bribery and corruption. Anti-bribery legislation is continuously being passed and prosecution is ongoing against corporations and individuals who break these laws.
The Foreign Corrupt Practices Act of 1977, the Bribery Act of 2010, and the Criminal Code Act of 1995 brought dramatic change to the global anti-bribery and corruption scene. International organizations are especially vulnerable to these laws and need to work hard to avoid prosecution. It's wise to institute corporate compliance programs, as well as anti-corruption clauses in your contracts.
Steps to Combat Corruption
Here are the steps every corporation should take to combat corruption.
- Review current compliance codes, policies, and programs and make improvements where necessary. Focus on external and internal compliance reporting mechanisms to ensure employees are well aware. It's important to have a strong compliance program, coupled with ongoing employee training and a thorough understanding of whistle-blowing obligations.
- Cultivate a culture, from the managerial level, that emphasizes compliance and ethical conduct. Make sure corporate compliance programs have oversight from the board level. It's important to consult with experienced legal advisers who specialize in matters pertaining to compliance and can develop action plans in the event a violation occurs.
- Be sure the organization's response to a bribery or corruption complaints is well-documented. Maintain privilege over material whenever appropriate, whether that's through in-house counsel or outside lawyers.
- Review and update compliance policies, especially regarding provisions for anonymous reporting, hotlines, and whistleblower policies.
Programs That Comply with Anti-bribery Laws
In order to counteract corruption, organizations should consider the following:
- Programs that encourage employees to make internal reports, rather than going to the press
- Incentives for employees who resort to internal reporting in an ongoing investigation
- An action plan that immediately responds to whistleblower tips, ensuring a speedy resolution to an investigation
- Regular training on internal reporting policies so employees are well-informed
What to Include in Anti-Bribery Contracts
Corporate compliance contracts that are well-executed may provide some comfort to organizations. It's helpful to know they're taking proper steps to avoid corrupt practices inside.
Things become a bit more difficult when bringing in outside contractors or retaining third parties. It's not as easy to dictate how those third parties will conduct internal components of their business. This is where organizations become vulnerable to prosecution, even though they adhered to strict due diligence and performed risk assessments.
To fight this vulnerability, the International Chamber of Commerce (ICC) created an anti-corruption clause that needs to be included in contracts where third parties will commit to comply with ICC rules that combat corruption. Such a requirement will help preserve trust between both parties and prevent corruption in the negotiation and performance of the contracts.
ICC Anti-corruption Clause
The ICC anti-corruption clause applies to any contract that incorporates it either by referencing it or writing it out in full. The purpose of the model clause (or a similar one) is to provide all parties with a contractual provision that can reassure them of their counterpart's integrity. The clause also assigns certain rights to each party, should corrupt practices be discovered.
An anti-corruption clause allows all parties to claim they have not and will not give or receive bribes or conduct other corrupt practices. If any party breaches the clause, suspending or terminating the contract is possible. Damages may even be claimed.
The ICC suggests all organizations include an anti-corruption clause in every significant contract. This will not only comply with best practices but also decrease the likelihood of prosecution over bribery and corruption laws. Whether the courts will enforce such clauses, strictly interpret them, or allow them as a defense against a bribery prosecution remains to be seen.
As for a response to such an allegation, whether or not an anti-bribery clause should be deemed invalid should not diminish the importance of its intent, especially when combined with robust internal policies.
An anti-corruption clause signals that unethical practices will not be tolerated. Including such a clause in your contracts is an important first step that will allow your business to reflect a strong internal culture to every party it works with.
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