On Friday 23 December the President of Kenya assented to the
Bribery Bill of 2016. The Act comes to effect on 13 January 2017. The bribery
bill (now an Act or law of Kenya) had been in discussion for a long time. The
president’s assent provides Kenya with another piece of legislation aimed at
combating bribery and corruption. It adds to a list that includes other laws
such as:
- The public officers Ethics Act of 2003;
- The anti-corruption and economic crimes Act of 2003;
- The leadership and Integrity Act of 2012; and
- The proceeds of crime and money laundering Act of 2009.
The main objective of the Act which was a product of
engagements between the private sector and government is to extend the fight
against corruption to the private sector, the so called “supply side” of the bribery cycle. The Act does not discriminate
public and private actions that have been defined to constitute giving a bribe.
Private sector in this regard includes partnerships, companies, charitable
organizations, faith/religious organizations, clubs etc. Bribery of one
individual in private entity to another in another private entity is an offence
under the Act.
What constitutes a
bribery offence?
As with many acts the term bribery has not been defined. The
Act provides that
“a person commits the offence of
giving a bribe if the person offers, promises or gives a financial or other
advantage to another person, who knows or believes the acceptance of the
financial or other advantage would itself constitute the improper performance
of relevant function or activity” .
The term advantage has been stated to include among other
things; money, gifts, loans, fee, reward,
commission, employment, property, protection from penalty, facilitation payment
to expedite or secure performance, release from liability etc.
According to the Act it does not matter whether the person
to whom the advantage is offered , promised or given is the same person as the
person who is to perform, has performed, the function or activity concerned or
whether the advantage is offered, promised or given by a person directly or
through a third party.
It is important to note that the Act covers bribery offences
outside Kenya, for example the bribery of a foreign official by a Kenya
individual or entity. Basically any act of bribery by a Kenyan citizen in or
outside Kenya is an offence under the Act.
Recent corruption cases (scandals) in Kenya have clearly
demonstrated that the private sector plays a big role in corruption and bribery
in Kenya. Most corruption schemes involving government funds have an element of
private sector involvements, either paying kickbacks or direct bribes to
government officials. An equal number of private sector players and government
officers are before courts in regards to the NYS corruption case for example –
in this case the allegation is that private sector individuals facilitated
theft of funds and also benefited from the proceeds of such funds. The ongoing
cases have both an element of corruption and money laundering.
While bribery is very common in Kenya, it is hard to prove
and sometimes detect. From “small” acts such as payments to police offices to
look the other way for traffic offences to mega bribery schemes such as the NYS
scandal, bribery is very common.
At its heart, a bribe is a business transaction, albeit an
illegal or unethical one. Bribery within the private sector is also rampant and
therefore this Act is most welcome.
Objectives of the Act
The Act has 3 main objectives:
- Extension of the fight against bribery to the private sector;
- Provision of specific requirements for private entities to adopt bribery prevention procedures;
- Imposition of a reporting obligation on any person who becomes aware or suspects an instance of bribery has occurred; and
- Provision of an effective coordination and accountability framework for the prevention, investigation and prosecution of acts of bribery.
Of course, there are political reasons such as being able to
“attract investors”, beg for loans and grants and raise funds from international
markets (Euro Bond)
The Ethics and Anti-Corruption Commission is responsible for
enforcement of the Act.
The Act imposes a number of obligations both to individuals
and organizations in regard to prevention and reporting of incidences of
bribery. In this regard the Act states that “a public or private entity shall
put in place procedures appropriate to its size and the scale and to the nature
of its operation, for the prevention of bribery and corruption”. Where such measures are not put in
place, the officer responsible, e.g. director commits an offence under the Act.
My interpretation is that all private and public entities MUST have a document policy on prevention of bribery
and corruption.
For partnerships, proceedings for a bribery offence shall be
brought in the name of the partners and the partnerships (accounting and law
firms – be aware).
The Act requires individuals (in public or private entity)
to report acts of bribery to EACC within 24 hours of becoming aware or
suspecting an instance of bribery. This in my opinion increases the
accountability of individuals such as internal auditors, compliance officers
and accounts who in the course of their work are highly likely to encounter or
become aware of such instances. This may result into conflicts where
individuals may be bound by confidentiality agreements.
Harassment of whistle blowers who report cases of bribery is
an offence under the Act. Such harassment include, demotion, dismissal or transfer
to unfavorable working areas.
Penalties
An individual found guilty of a bribery offence:- Shall be liable to imprisonment for a term not exceeding 10 years or a fine not exceeding Kshs 5 (USD 50,000) or both.
- May be liable to an additional mandatory fine if, the person received a quantifiable benefit – the mandatory fine in this case shall be equal to five times the amount of the benefit or loss suffered. If the offence constituted a loss and a benefit, the fine will be 5 times the sum of the benefit and loss.
- In addition to the fine or imprisonment, courts may order the convicted person to pay back the amount or value of any advantage received by him to the government.
- Confiscation of property acquired through bribery
- If convicted person is a public officer, he shall be barred from holding office in accordance to the provisions of the constitution and other laws.
- If the convicted person is a director of a company, disqualification from holding the position of director in any other company in Kenya for a period of not more than 10 years.
- If the convicted person is a partner, disqualification from holding the position of partner in any other firm in Kenya for a period of not more than 10 years.
- Disqualification from holding public office for a period of not more than 10 years.
- A person other than a natural person convicted of an offence shall be disqualified from transacting business with the national or county government for a period of not more than 10 years.
Commencement of the
Act
The commencement date of the Act is Friday 13 January 2017.
In regards to ongoing investigations or prosecutions, the
act provides that “any investigations or prosecution
or court proceedings instituted before the commencement of this Act based on an
offence under this Act shall, with the necessary modifications, be treated or
continued as if they were instituted under this Act”
