HC Deb 14 March 2001 vol 364 cc1039-44 4.40 pm
Mr. Tony Colman (Putney)

I beg to move, That leave be given to bring in a Bill to make provision for combating the bribery of foreign public officials in international business transactions by implementing the OECD Convention of 1997; to amend the Prevention of Corruption Acts 1889 to 1916; to make further provision for the investigation of, and about the jurisdiction of courts in England and Wals in relation to, certain bribery offences; to amend the Criminal Justice Acts 1987 and 1993; to make provision about the powers of the Attorney General in relation to such offences; and for connected purposes.

This is a modest Bill. It addresses an urgent need for this country to comply with, and be seen to be in compliance with, the OECD anti-bribery convention of 1997. I hope that the measure will command all-party support. Its effect substantially accords with the declared policies of Her Majesty's Government to criminalise the bribery of foreign public officials and to make detection and prosecution of such bribery effective. Bribery of public officials to obtain or retain business is a two-way process. It may be driven from the demand or extortion side, or from the supply or bribing side. The convention addresses only the supply side, as does the Bill.

I am privileged to be a member of the Select Committee on International Development. We are just concluding an inquiry into corruption, during which the immensely damaging effects of bribery on economies and investment have become clear. Those who suffer most are usually the poorest in society. There is mounting anger among those who, through corruption, are denied the fundamental services that we take for granted.

The Government, and the previous Conservative Government, are to be commended for co-operating with the OECD states to bring forward the convention in record time. The OECD's original recommendations on corruption and on ending the deductibility of bribes for tax purposes were made in 1994 and 1996. The recommendation to proceed to a convention came in May 1997. The convention was signed in December 1997, was ratified by the UK in December 1998, and came into force in February 1999. The preamble states: Bribery is a widespread phenomenon in international business transactions, including trade and investment, which raises serious moral and political concerns, undermines good governance and economic development, and distorts inter national competitive conditions. My right hon. Friend the Home Secretary, in a foreword to the Home Office paper of June last year, said: Corruption is like a deadly virus. Left unchecked it weakens economies, creates huge inequalities and undermines the very foundations of democratic government. The international business community is increasingly coming to re alise that a culture of corruption is a disincentive to investment and trade. We are committed to the fight against corruption wherever it is found. Corruption knows no boundaries. And the development of e-commerce makes it increasingly difficult to pin down the physical location at which a corrupt transaction has taken place. The law has to catch up with these realities. As chairman of the all-party group on socially responsible investment, and a in member of the anticorruption non-governmental organisation Transparency International (UK), which has numerous leading companies as corporate supporters, I can confirm that responsible and progressive companies in this country, operating internationally, have already appreciated the need to safeguard their corporate reputations in the area of corruption, as they do already in connection with the environment, health and safety and child labour. Through ethical business codes, compliance procedures and training, and in other practical ways, such companies are sending out a clear message that corruption is to be outlawed as a means of obtaining or retaining business. Again, legislation in this country must now catch up.

This matter is urgent. The OECD working group on corruption, in an evaluation issued in June 2000, concluded that UK laws were not in compliance with the convention and urged the enactment of appropriate legislation by the end of 2000. The Government accept the need for this legislation, but apparently they would prefer it to be part of a comprehensive measure reforming the general law of corruption, including the bribery of parliamentarians and other potentially controversial reforms. That measure will come before the House when parliamentary time allows.

Meanwhile, other leading G7 nations and most of the signatory states have taken steps to bring their laws into line with the convention. Some of them now view the UK's inaction with increasing frustration and irritation. While there is no clear offence of bribing foreign officials, offshore bribes, incredibly, remain tax deductible, as is confirmed by the Treasury's guidance to inspectors of taxes.

There is no compelling reason for this limited but vital reform of our criminal law to await a much wider Bill at some indeterminate future date. The offence stands alone. It needs to be dealt with urgently for the UK to maintain credibility in its determination to deal with international economic crime.

My Bill reads the offence into existing legislation. It therefore in no way prejudices a future comprehensive Bill which I am sure will come forward in due course. Also, at a single stroke, it cures the scandal of UK tax deductibility of foreign bribes. Mercifully, domestic corruption in this country is not too serious; when it is discovered, our existing legislation, although unchanged since 1916, has proved to be an adequate basis for prosecution.

The publication by the World Bank of its list of companies found to have behaved corruptly in regard to Bank-funded procurement reveals a significant number of British businesses. In no case has it been possible to prosecute in this country. The UK and the City of London must not be allowed to be corruption and money-laundering havens. The report last week of the Financial Services Authority showed that $1.3 billion, the proceeds of corruption and looted funds of the late President Abacha of Nigeria, had been laundered through London banks. Easy laundering of funds leads to greater extortion in corrupt regimes. The reputation of the City demands that we show the world that we are not soft on economic crime.

In addition to creating the offence of bribing foreign public officials, the Bill would enact the Government's proposals for expanding the jurisdiction of the courts of England and Wales. It would include nationality based jurisdiction, so that even if all the components of an offence—offer, acceptance and payment—took place offshore, it could still be prosecuted here.

It will never be easy to detect and prosecute international bribery, but to give the authorities the greatest chance of success, the Bill proposes expressly to widen the powers of the Serious Fraud Office to investigate and conduct criminal proceedings for serious and complex corruption in the same way as it does for fraud. The SFO has the advantage of exceptional compulsory powers of investigation and over the years has gained unique experience in dealing with such offences. However, the SFO investigates a case of corruption only if it includes fraud, which it frequently, but not always, does. The distinction is artificial and, I believe, unnecessary.

The Bill also proposes to remove the requirement for the consent of the Attorney-General to institute a prosecution for the new offence of bribing foreign public officials. The Law Commission, in its recent review of the law of corruption, recommended that. The OECD convention requires that to protect the independence of prosecution, the discretion whether or not to investigate and prosecute foreign bribery should be based solely on professional motives and is not to be subject to improper influence by concerns of a political nature. No one suggests that a Law Officer would exercise his or her powers improperly, but the Attorney-General is a member of the Government. For this reason, the OECD working group recommended that the UK should reconsider that requirement.

I should like to pay tribute to the Departments and organisations that are working hard to curb the damage wrought by corruption worldwide, but particularly in poor and emerging economies. The Department for International Development is at the forefront of UK initiatives in this area. Following the recent review of the Export Credits Guarantee Department, new business principles and practices have been introduced to ensure that publicly funded support does not go to business induced by bribery. The ECGD's policies now expressly include promotion of the full implementation of the OECD convention.

The World Bank has in recent years initiated an anti-corruption strategy. Transparency International never ceases to keep the issue at the forefront of world concern. There is much more to be done, but these and comparable initiatives are changing the way in which business is done. The enactment of the Bill is essential as a priority in any future commitment to legislation. I commend it to the House.

4.49 pm
Mr. John Bercow (Buckingham)

I oppose the Bill presented today by the hon. Member for Putney (Mr. Colman), but wish to make it clear at the outset that it is nothing personal. Indeed, without wishing to overstate the case, it pains me somewhat to oppose the hon. Gentleman, who is one of the most courteous Members of the House. He is a likeable cove, and a man for whom I have considerable respect. However, he has not done himself justice today, because the Bill will not achieve its stated objective. It is important to emphasise to people listening to this debate that it is not even intended to do so. In short, it is a classic example of a triumph of style over substance—something that we have seen consistently from this Government for nigh on four years.

I want to explain why that is so. The hon. Gentleman, who serves on the Select Committee on International Development, is well informed about the issues and reads closely from a carefully prepared script. As he knows, the Government set out their thinking as recently as November 1997, when they stated in their White Paper "Eliminating World Poverty: A Challenge for the 21st Century" their support for measures to counteract bribery and corruption in the specific context of international business transactions. Thereafter, however, no legislation was introduced to give effect to the OECD convention.

In a written answer published in column 33W of the Official Report on 10 April 2000, a Minister—I think that he spoke for the Department for International Development, but he certainly represented the Government—said that the Government intended to introduce legislation is soon as possible to give effect to the provisions of the OECD convention. That answer was given 11 months ago, but nothing has happened since. No action has been taken and the Government have made no progress. I assume that the answer was provided at least partly in response to the justified criticism made in January last year by George Moody-Stewart, head of the UK chapter of the anti-corruption non-governmental organisation Transparency International. He pointed out that although the Prime Minister and the Foreign Secretary were said to have an ethical foreign policy, it was difficult to make that claim without support for the OECD convention.

A most remarkable and instructive development occurred when my hon. Friend the Member for South-West Devon (Mr. Streeter) challenged the Secretary of State for International Development on that subject. Hon. Members will have observed that the right hon. Lady was in an especially tetchy mood. She demurred when my hon. Friend teased her by saying that the Government had done absolutely nothing to give effect to their high-falutin' declarations of good intent and had become embarrassed by the fact that the hon. Member for Putney had introduced a Bill to deal with those good intentions. She dissented and said that she was not embarrassed for the simple reason that it was her idea that he should introduce the Bill. The hon. Gentleman is shaking his head—that is not a career-enhancing move. It is a dangerous initiative and I would expect better of him. The Secretary of State said that it was her idea, but now he is claiming parentage . Let there be an argument between Birmingham, Ladywood and Putney, but those involved should bear in mind that the issue is of the greatest importance.

As someone who believes passionately in the integrity and efficacy of the House of Commons and who wants to see those two qualities restored, I am concerned that if we support the Bill we will be engaged in humbug and nonsense—it will be nonsense on stilts at that. The hon. Gentleman knows that the Bill will not be enacted before the election; indeed, it is not intended to become law. The Government could have addressed the issue in their recently published International Development Bill, which contains no fewer than 20 clauses and six schedules. He now tells us that that issue is both "essential" and "urgent", but the Secretary of State declined to use a Government Bill to achieve the objectives that we are considering.

Ministers are now seeking to spin to the public the impression that they are serious about those objectives and that a prominent Back Bencher, who is a very worthy, assiduous and trusted member of the International Development Committee, is going to deliver the goods. The public should know that that will not happen. The Bill will not become law and is not intended to be enacted. Of course, it might be intended to assist the hon. Gentleman, who has a majority of 2,976 in Putney, where he faces a formidable threat in the form of Mr. Michael Simpson, the constituency's energetic, talented and determined prospective Conservative parliamentary candidate. Mr. Simpson needs to secure a shift of only 1,489 votes to ensure that he becomes the representative of that constituency in this House. I therefore understand the hon. Gentleman's domestic diffic ulties, but I hope that he will understand that that cannot be my prime motivation.

The Government are doing themselves a disservice and the hon. Gentleman is compounding the sin. These people have the time to introduce a Bill to criminalise the country pursuits of tens of thousands of hitherto law-abiding people but, apparently, they do not have the time to introduce a Bill to give effect to the intention stated by Ministers as long ago as November 1997. That is shabby and unworthy.

I do not wish to divide the House on the matter, because we have other important matters to address today. However, I am genuinely disappointed in the hon. Gentleman. We all had high hopes for him. He should not reduce himself to being a craven lickspittle of the Secretary of State for International Development.

Question put and agreed to.

Bill ordered to be brought in by Mr. Tony Colman, Mr. Bowen Wells, Dr. Vincent Cable, Ann Clwyd, Barbara Follett, Mr. Nigel Jones, Ms Oona King, Ms Tess Kingham, Mr. Andrew Rowe and MI. Tony Worthington.