In the run up to the London Olympics and other major events like the forthcoming Queen’s Jubilee, business risk experts at Interchange Solutions are advising hotels and hospitality businesses to be mindful of the UK Bribery Act.
With the London Olympics under 100 days away and The Queen’s Jubilee
celebrations even sooner, the hotel and hospitality sectors are
relishing the prospect of visitor and tourist bookings for accommodation
and other corporate hospitality and revenue earning activities. Major
sporting events are an opportunity for individuals to part with their
money, especially if they have the chance to witness a truly historical
event such as Jamaican sprinter Usain Bolt smashing a 100 metres world
record. The Queen’s Jubilee is also expected to attract hundreds of
thousands of foreign visitors to the UK.
But with the UK Bribery Act now in force and with the Serious Fraud
Office on a mission to find and prosecute wrongdoers, many hoteliers
and hospitality businesses will be mindful of the need to stay on the
right side of the law as they go about their daily business.
The Bribery Act applies to all companies, regardless of their business
sector. The particular sting in the tale is the Section 7 offence of a
company not having in place procedures to prevent bribery. The Guidance
issued with the Act sets out six principles to help companies
proportionately and appropriately implement so-called “adequate
“B&Bs and small hotels in the UK are no different to any other small
business and are operating in a relatively risk free environment,” says
John Burbidge-King, business risk expert and CEO of Interchange. “They
would not be expected to have volumes of polices, but they might
consider a simple ethics policy that makes it clear to staff that
accepting bribes (as opposed to normal tips) and other unethical or
criminal behaviour is unacceptable.
“Larger hotels and hotel chains are a in a different field. The sort of
risk they might face, for example, is a food or fittings buyer taking
backhanders or excessive gifts so that the buyer is influenced to place
contracts with a particular supplier; perhaps the promise of lavish
hospitality from a beverages supplier to market their drinks in the bar?
If there was a subsequent allegation – such as from a competing
supplier who refused to pay bribes - those individuals might be
investigated under the Act for giving or receiving bribes.”
The hotelier would then be investigated to determine whether it had
adequate procedures in place to have prevented the buyer accepting
bribes. Under the Act, the burden of proof falls on the company to show
those procedures were in place.
If convicted, the hotelier faces fines and the potential imprisonment of
individuals, even if they were not directly involved in the act of
bribery. It is therefore in the interests of the hospitality industry
to consider the nature of its exposure and act appropriately.
“Hospitality by its very nature is a grey area,” says Burbidge-King.
“People and companies buy hospitality packages and services to nurture
business relationships – it’s a sector that has thrived for many years,
especially around major sporting events such as football, rugby, horse
racing and others.
“As part of normal business relationship building, hospitality and
entertainment are not envisaged as immediate grounds for prosecution
under the Act, despite some scare stories to the contrary.”
For businesses wishing to remain on the right side of the law, Interchange has set out some simple rules:
- Keep hospitality proportionate, appropriate and sensible
- One to many is better than one to one.
- Lavish, inappropriate and constant entertainment, focused on a single
person or entity might be construed as a bribe if the motive is to
unreasonably influence a business decision favouring the giver of the
- It is also prudent to check the integrity of key subcontractors and suppliers – you need to know whom you are dealing with.
- An important note to UK exhibition companies is where they might be
setting up an exhibition stand abroad. Exhibitions are just-in-time
delivery businesses and vital materials can become ‘stuck’ in unfriendly
foreign customs. Sometimes a small payment (a facilitation payment) may
be demanded to resolve the issue. Such payments are illegal under the
- Subcontractors - particularly for key events where there is greater
chance of unethical or criminal behaviour - should be vetted, sensibly
and proportionate to the risks, to ensure that the company knows the
background of whom they are dealing with.
For further information about bribery, visit: www.interchange-solutions.co.uk