The sector was the subject of the highest number of completed cases over the past four years, according to the Ernst & Young UK Bribery Digest , which reviews completed bribery and corruption cases in the UK. This includes a completed case undertaken in 2012 of individuals involving confidential information supplied to bidders for projects in the oil and gas sector.
Of 26 completed corruption and bribery cases since 2008 the oil and gas sector made up nearly one-fifth of prosecutions (5 completed cases). This was followed by prosecutions concerning the medical goods sector; insurance; and engineering and construction, which each saw three successful prosecutions.
Though there have been no major cases under the UK Bribery Act to date in its first year of being enforceable, completed cases under older bribery and corruption laws provide a useful template for how the enforcement of the stricter new laws act may play out across sectors and which are most at risk.
Oil and gas is traditionally seen as higher risk because it operates in difficult environments, with the attendant risk of bribes and of facilitation payments. Facilitation payments, often to expedite bureaucratic actions, remain illegal under the new act. Furthermore, joint ventures involving oil and gas businesses, other companies, foreign governments and state-owned entities continue to be a feature of the industry, and carry corruption risks. Those involved in joint ventures are at risk of being liable for any bribes or corrupt activity by any partners acting on their behalf.
Jonathan Middup, UK Head of Ernst & Young’s Anti-Bribery and Corruption team said: “There is no suggestion that individuals or companies that operate in the sector are more corrupt, and in fact the corporate compliance structure evident in the world of oil and gas should be the envy of many others. The findings have more to do with the nature and location of operations specific to the sector. Many operations are developed in countries with higher levels of corruption, making global operations inherently risky.
“This has led to one fifth of cases being taken in oil and gas, most often involving payments made abroad or kickbacks to foreign government officials.”
David Lister, Oil and Gas sector lead for Fraud Investigation & Dispute Services added: “Given the record of prosecutions, it is safe to assume that the oil and gas sector will be subject to more action than most. In order to reduce exposure to risks, companies must undertake a detailed risk assessment for each country they operate in. This should involve developing and implementing training for all staff and contractors, and exercise global best practice guidelines that can be tailored to meet local legal, cultural and commercial requirements.”
Source : ey