Old dogs can learn new tricks

A DPA in the UK is an agreement reached under judicial supervision between the prosecutor and an organisation, and it allows a prosecution to be suspended for a defined period provided the organisation meets certain specified conditions. Although there are many differences between DPAs in the US and in the UK, the principles are the same.

The UK has come late to the DPAs party, but their introduction is a positive development and a change from how the UK has traditionally viewed corruption in both its jurisdiction and overseas. Corruption is a global problem that demands international solutions and a modern approach of fighting. It is for national and international prosecutorial authorities to work closer together and develop systems that encourage self-disclosure like DPAs. The UK has generally relied upon its own rich legal history, but the introduction of DPAs squarely based on the US model is a welcome addition to the armoury of mechanisms available in the global anti-corruption fight, and the mere fact that the UK is prepared to adopt a foreign system is promising.

More needs to be done, however, as the same old problems remain (e.g., lengthy and expensive proceedings that are difficult to prove and that are not rehabilitation based) and we need to look beyond criminal law if we are to progress faster than corruption advances. In this regard, lots more can be learned from the investigative units and anti-corruption offices of the International Financial Institutions (IFIs) and Multilateral Development Banks (MDBs), where not only are intelligence sharing and self-reporting mechanisms prolific, but a more “commercial” sanctions-based civil system is the norm.

The IFIs/MDBs such as the World Bank and the Asian Development Bank (AsDB) provide funding for development projects undertaken by companies around the world. Vast sums of money are loaned each year and the MDBs must ensure that their funds are being properly managed. Each MDB is equipped with an investigative unit (such as the Office of Anticorruption and Integrity in the case of the AsDB), whose mandate is to carry out independent investigations into allegations of corruption, fraud and other sanctionable practices in IFI/ MDB financed operations. In contrast to the investigative office of the World Bank, those of the AsDB and African Development Bank are more effective because they take a more commercially expedient view.

The IFIs/MDBs have their own sanctions procedures that are in stark contrast to traditional national enforcement mechanisms and have helped shape the future in the fight against corruption. Examples of these international developments and procedures include:

• endorsing the 2006 IFI Uniform Framework for Preventing and Combating Fraud and Corruption and Principles and Guidelines for Investigations which guarantee harmonisation of guidelines for the investigative offices of each institution globally, meaning greater consistency and intelligence sharing;
• harmonising sanctions through the introduction of cross-debarment by all MDBs. Under the 2010 Agreement for Mutual Enforcement of Debarment Decisions, each participating institution agreed to adopt harmonised definitions of sanctionable practices and implement mutual enforcement of debarment decisions in appropriate circumstances, so that not only are companies which are found to have engaged in corrupt practices debarred consistently, but they are debarred from bidding on MDB-funded projects across all participating institutions;
• widening the definition of offences and lowering the threshold for a finding of wrongdoing so that the sheer breadth of conduct that might constitute a sanctionable practice within the jurisdiction of MDBs far exceeds that of national systems. Under the current 2011 World Bank Procurement Guidelines, fraud, for example, need not be deliberate. This definition may appear outlandish to a criminal lawyer, but the widening of the definition to include “reckless” behaviour such as the taking of risks has certainly widened the playing-field in administrative proceedings against companies; and
• granting of immunity to companies in certain circumstances following self-reporting, in exchange for a lesser penalty (e.g., a lower period of debarment) and for providing the IFIs/MDBs with essential intelligence such as the wrongdoing of other companies.

These developments in the IFI/MDB world have modernised the international fight against corruption and provide companies with the ability to minimise the impact of findings of guilt, whilst offering them a constructive way to reform and prevent repetition of misconduct. Moving away from categorising corruption as a purely criminal matter has opened the door to lowering the standard of proof and increased international settlements. It is, perhaps, too early to introduce all of the measures used by the IFI/MDB community in a national jurisdiction like the UK, but we should not shy away from the progress achieved by other entities in the global fight against corruption.