Treasury coffers are reaping the rewards of foreign bribery fines
Over the past year something extraordinary has happened. The governments of countries in the Global South where British multinationals paid bribes and faced penalties in the UK have started demanding a fairer share of the huge criminal fines that have up to now gone to the UK Treasury.
Since 2014 the Serious Fraud Office has brought in £1.8bn in financial penalties to the UK Treasury relating to foreign bribery cases following criminal investigations into 15 companies. In just four of these cases did any money – £16.2m in total – make it back to the people of the countries harmed by these corrupt practices.
The individual amounts returned have generally been paltry. Nigeria received just £210,610 after Amec Foster Wheeler was fined £103m in 2021 for using a corrupt agent to pay bribes to get oil contracts. The only case where a company paid more to an affected country in compensation than it paid as a fine to the UK Treasury was when Alstom Power paid £10.9m in compensation to Lithuania for bribes on a power project.
The ethics and the optics of many millions of pounds going into the UK Treasury when it is people in some of the poorest countries who suffer the damage done by corporate bribery has always been terrible.
Principles introduced in 2018 by law enforcement to consider victims and compensation in overseas corruption cases offered a good start and on paper put the UK far ahead of the game compared to countries like the US. But they have failed on their promise to deliver compensation.
First came a claim for compensation by the Nigerian government in late 2022 as part of the SFO’s £276m penalty against mining giant Glencore. But after the SFO failed to back their claim, the court said its hands were tied and Nigeria was left empty handed. And then earlier this year the Indonesian government was reported to be withholding cooperation on a new SFO bribery investigation into aerospace company Bombardier after being shut out of the UK’s massive £824m fine against Airbus. In September it emerged that Indonesia is even thinking of suing the UK for its share of the Airbus settlement.
These kinds of challenges add urgency to the growing consensus that the UK must change how it distributes the spoils from foreign bribery enforcement. A major UN anti-corruption gathering in Washington DC in December and the UK’s long awaited anti-corruption strategy offer a vital opportunity for the UK to show it is serious about ensuring a fair deal for victims of corruption.
But this needs concrete action not just fine words.
Most importantly, there needs to be a change to the law. Courts must be empowered to award compensation in complex cases; currently case law prevents this. The calculation of the costs of corruption also has to change. At the moment the only compensation that has been returned has been limited to the amount of bribes paid, ignoring the wider economic and social damage. UK law enforcement agencies should also provide proper guidance to those affected by corruption about how they can seek compensation in the UK.
Finally, civil society groups and experts, particularly those from affected countries, must be involved in discussions about how any compensation will be spent to make sure it is used to benefit victims and is not lost to corruption again.
The UK’s international standing, and increasingly its ability to conduct effective investigations that rely on the goodwill of law enforcement bodies in affected countries, is on the line.