Is bribery really a concern for Higher Education institutions?

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The third conviction under the Bribery Act 2010, in March this year, was of a graduate student at Bath University who was convicted of attempting to bribe his course supervisor with £5,000.

This case is pretty transparent and there are few people who would not have realised that what was offered was a bribe and a criminal offence (the gun falling from his pocket being a particular give away). Of far more concern is the issue faced by Oxford University Press last year, when it discovered that there were irregularities in the way that its overseas subsidiaries were dealing with third parties.

Although the acts pre-dated the Bribery Act, the case still resulted in OUP having to pay a Civil Recovery Order of £1.9m.

With the change to higher education funding over the last few years, higher education institutions have increasingly paid attention to donations and fundraising, and many have sought to increase the recruitment of international students.

Several institutions have also established partnerships with educational establishments in other countries or have established campuses overseas. This increasing globalisation may be necessary to ensure that institutions remain competitive and have a strong financial base; there are, however, corresponding risks.

Following the second anniversary of the implementation of the Bribery Act, this article acts as a reminder of some of the main risk areas in respect of bribery and corruption, and ways that institutions may be able to manage that risk.

Donations & fundraising

If you followed Lord Woolf's inquiry into LSE's links with Libya and the donations made, you will be aware that donations can be a source of considerable risk in respect of bribery.

Major donations are obviously a valuable source of funding, and universities understandably want to tread carefully to avoid offending a possible donor. A balance needs to be achieved to enable institutions to raise funds while reducing and managing any risks associated with donations.

Key points to consider are:

  • Who are the donors?
  • Have you done due diligence?
  • Are they linked to any current or potential students?
  • Where are the funds coming from?
  • Why are they making the donation?

Asking these questions and recording the answers, perhaps as part of a general conversation about the proposed donation, together with clear documentation, should be a key part of measures to prevent bribery or corruption as well as being good practice.

Agents & third parties

Under the Bribery Act, a university could commit an offence if an agent or other person associated with them gives or offers a bribe: even if it happens in a different country, is part of the usual way of doing business in that country, and the university knows nothing about it.

As universities expand their overseas operations, particularly where this happens quickly, the associated risks – not only in respect of bribery but also reputation - increase.

Key points to consider are:

  • Know the agents or third parties you engage: carry out thorough due diligence
  • Obtain references from other UK institutions
  • Get a clear contract in place with clauses requiring compliance with the Bribery Act (and other legislation)
  • Ensure staff are aware of "red flags"
  • Have financial controls in place: monitor invoices and payments
  • Consider providing training to agents and third parties on what practices are not acceptable (whether under the Bribery Act or generally)

Foreign public officials

If your institution deals with overseas educational establishments, education departments or any quasi governmental body, then it is likely that you will be dealing with foreign public officials ("FPOs").

There is a specific offence under the Bribery Act in respect of FPOs – essentially, you could be guilty of an offence if you offer something which may be seen to influence the FPO in their role, even if all you are trying to do is to get the FPO to carry out their role properly.

This offence also covers "grease payments": for example, a border official trying to get you to pay an extra "fee" to bring in goods or to enter the country. Particular caution should be applied when dealing with FPOs.

Key points to consider are:

  • Do you know if the person you are dealing with is an FPO?
  • Has due diligence been carried out?
  • Are any agents or third parties on your behalf dealing with FPOs?
  • What is your policy on offering corporate hospitality to FPOs?
  • Do you have a policy or procedures to assist staff who may face requests for "grease payments"?

Policies & procedures

The recommended approach to protect against bribery offences is to carry out a regular risk assessment, to identify likely risk areas and ensure that your policies and procedures are adequate and proportionate to those risks. Key to implementing this is, of course, ensuring that your staff understand and apply the policies and procedures properly in order to protect themselves and the institution from risk - rather than seeing it as a "tick box" exercise.