European Standing
Committee B
Wednesday 12 February 2003
[Mr. David Taylor in the Chair]
Combating Corruption in the Private Sector
2 pm
The Parliamentary Under-Secretary of State for the Home Department (Mr. Bob Ainsworth): Mr. Taylor, I welcome you to the Chair. It is pleasing to see a potential member of the awkward squad tied up in the Chair instead of making difficulties. It is an admirable direction in which we should travel. I know that you will welcome those comments.
We are here to discuss the draft framework decision, which replaces the joint action on combating corruption in the private sector agreed in 1998 by the Government and cleared through scrutiny. It is already in force. The joint action contains the same requirements in relation to the points at issue as those in the framework decision.
Why then, the Committee may ask, did the Danish presidency take the trouble to restate the law? The problem is that the joint action is not legally binding and has not been implemented by several member states, notably France, Spain, Portugal, Italy, Greece, Austria and Luxembourg. The Danish presidency aimed to oblige those that have lagged behind to introduce an effective law on corruption within the private sector. The Government support that aim: the UK has applied wide-ranging law on corruption to the private sector since 1906.
While we understand the European Scrutiny Committee's concerns we do not therefore see any difficulty for the UK in agreeing to the framework decision. Moreover, we are not the only European Union member state intending to rely on the terms of the Prevention of Corruption Act 1906 in meeting its requirements. The 1906 Act is also still in force in the Republic of Ireland.
I hope and expect that this Committee will support the Government and ask its members to bear in mind the fundamental point that if we do not agree to the framework decision, the joint action that the Committee has already agreed will remain in force. The requirements in place on member states under the joint action will remain the same, but will not be legally binding. The only results of such a decision would be to give comfort to those member states that have not implemented the joint action and to reduce the pressure on them to introduce a law on corruption in the private sector.
The European Scrutiny Committee has expressed concern that the offence in the framework decision does not expressly require an element of impropriety. We appreciate the Committee's position but we believe that the concern is misplaced. The framework decision requires member states to criminalise the payment of ''undue advantages'', at least in cases of a breach of duty. The term ''undue advantage'' is used widely in
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international law; for example, in the Organisation for Economic Co-operation and Development convention on the bribery of foreign public officials in business transactions.
In its stringent examination of UK law, the OECD has not suggested that there is any difficulty about our compliance in this respect, even though our law uses the adverb ''corruptly'' to qualify the action rather than the adjective ''undue'' to qualify the advantage. The fact that the term ''undue'' is undefined in the framework decision as in other instruments leaves a margin of appreciation to member states, which we think is both necessary and desirable.
We accept that the lack of definition will allow other member states to take a broader view than we do of what should be criminalised. However, that is not a practical problem, but quite the reverse: several member states have a very limited concept of corruption in the private sector or no concept at all. Discussions at European level have led us to understand that the concept simply does not exist in Italian law.
The framework decision sets minimum standards that member states may go beyond. We made that point clear to the Confederation of British Industry in our consultation on the measure. In a letter dated 5 September 2002, which we have placed before the Committee, the CBI said:
''we welcome all action against corruption in the private sector.''
Industry is, after all, the victim of the corrupt persons within it. The CBI also reminded us that the Law Commission found in 1998 that
''breach of duty was not an adequate concept on which to base an efficient code.''
It concluded:
''it would be a pity if the development of a modern and efficient UK law on corruption, as proposed by the Law Commission, were to be constrained by the UK's obligations under a Framework Decision.''
That is another good reason why we should not constrain people against going further if they want to. The Government agree with the Law Commission and the CBI, and we therefore welcome the flexibility provided by article 1 of the framework decision, which sets out only a minimum standard for what constitutes a ''breach of duty''.
The European Scrutiny Committee also expressed concern that the framework decision on the European arrest warrant does not use the definition of corruption contained in the draft measure before us today. However, the use of the broad term ''corruption'' in the earlier measure is entirely consistent with other broad headings under the European arrest warrant list. Those include ''fraud'' and ''swindling'', neither of which is a term used in our criminal law. The Committee suggested that ''corruption'' under the European arrest warrant would bear the same meaning as it does under the framework decision when the acts fall within its scope, but not otherwise. I do not think that such a provision would clarify the framework decision on the European arrest warrant. That framework decision is not before us today. It cleared scrutiny in the House last April. Moreover, in the Government's view it is desirable to
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use broad headings to ensure that serious offences of a similar nature are caught in all countries.
That approach is fully consistent with the UK's overall preference for mutual recognition and judicial co-operation over measures to harmonise completely the substantive criminal law across the European Union. I believe that our approach is consistent with European law but allows us the freedom and flexibility to operate in consort with it. That is a freedom that we rightly wish to preserve. The present framework decision is a modest measure designed to give additional legal force to existing arrangements that have not been implemented in some of our partner countries.
The Chairman: We have until 3 o'clock for questions to the Minister. I remind hon. Members that questions should be brief and asked one at a time. There is likely to be ample opportunity for all hon. Members to ask a number of questions if they so wish.
Mr. Nick Hawkins (Surrey Heath): May I welcome you to the Chair, Mr. Taylor? Not many members of the Chairmen's Panel are welcomed to the chairmanship of a Committee as you were—by the Minister placing it officially on the record that you are an acknowledged member of the awkward squad and that he is delighted to see you as a member of the Chairmen's Panel instead.
It is also a fascinating Committee that becomes quorate only as the clock ticks round and the third Government Member arrives. I am sure that the hon. Member for Greenock and Inverclyde (David Cairns) was welcomed with relief. Indeed, I am sure that he has never been so popular with Ministers. It was interesting that even the Government Whip did not appear until two minutes after we had started. Perhaps the fact that so few Government Members were here on time reflects their increasing disillusionment.
David Cairns (Greenock and Inverclyde): Will the hon. Gentleman give way?
Mr. Hawkins: I do not think that I am allowed to give way, because I am about to ask a question. I would happily give way to the hon. Gentleman otherwise.
The Minister quoted with approval some words from the CBI's letter, which is at the back of the document bundle. Will he similarly endorse the whole letter, which contains some quite trenchant criticisms in a later passage that he did not quote? Will he comment on the critical parts of the letter and not refer only to the parts that support him?
Mr. Ainsworth: May I clarify something, Mr. Taylor? I was careful to qualify my comments about your membership of any particular faction in the House. I felt pretty confident that you would not be the slightest bit upset by the title that I gave you.
In addition, before the hon. Member for Surrey Heath (Mr. Hawkins) comments on the attendance on the Government Benches, he should at least look at the Opposition Benches. His colleague, the hon. Member for Henley (Mr. Johnson), is here now, but he arrived some time after the Committee had started,
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and when he did arrive there was no one on the Liberal Democrat Benches.
The Chairman: Order. May I bring the Committee to what we are dealing with, which is questions to, and replies from, the Minister on the matter under debate?
Mr. Ainsworth: That will teach me, Mr. Taylor.
I quoted the relevant parts of the CBI's letter as it related to the decision before the Committee. If the hon. Member for Surrey Heath wants to place other quotes on the record and have them addressed, he is free to do so.
Mr. Kelvin Hopkins (Luton, North): What a great pleasure it is to serve on the Committee for the first time under your chairmanship, Mr. Taylor. ''Awkward'' is not a word that I would apply to you. In all our time in Parliament, I do not think that we have ever disagreed, but perhaps that says something about me, too.
I have looked through the document to try to find a definition of the private sector. Can my hon. Friend the Minister enlighten me? The private and public sectors often work together on contracts. There are public-private partnerships and mixed-ownership companies. Are we talking simply about transactions or relations between private companies?
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