Kenya’s New Bribery Bill: It Takes Two to Tango

By AAT Senior Contributor, Michael-James Currie

Corruption has long been recognised as one of the biggest challenges which entities wanting to do business in Kenya must contend with.

The frequent demands for bribes by public officials has led to increased business costs, particularly for foreign investors. According to figures published by GAN Integrity Solutions in their GAN anti-corruption Portal, one third of all firms reportedly experienced extortion regularly and were required to make facilitation payments and give gifts to carry out basic business operations such as obtaining operating licences, construction permits and utility connections.

Accordingly, the approval and adoption of Kenya’s new Bribery Bill by Cabinet in December 2016, which aims at facilitating an effective coordination and accountability framework for the prevention, investigation and prosecution of acts of bribery, shows an overwhelmingly positive intent by the Kenyan authorities to turn the tide against corruption.

Corruption has generally been viewed as a ‘public sector’ crime in Kenya. In other words, public officials ‘demanding’ bribes from private entities. Prior to the amendments, it was the ‘demand’ side of corrupt practices which was targeted by legislative prohibitions.

The Bribery Bill, however, recognises that both parties to a corrupt transaction ought to be held accountable and, therefore, the Bribery Bill’s predominant focus appears to be the extension of the fight against bribery directly to the private sector via the introduction of various obligations together with onerous sanctions including criminal sanctions targeted at the private sector or the “supply side”.

In essence, the Bribery Bill focuses on both the offer and the acceptance of a bribe by both local and foreign individuals. The Bribery Bill, however, places further obligations on private entities which include:

• imposing a positive duty on every person to report to the Ethics and Anti-Corruption Commission any instance of bribery within twenty four hours of becoming aware or suspecting an instance of bribery; and
• introducing obligations on firms to “have in place procedures appropriate to their size and nature of operations for the prevention of bribery“.

These provisions effectively mandate firms to take positive steps in order to comply with the Bribery Bill such as implementing internal rules that will preclude employees from paying or receiving bribes.

Importantly, the Bribery Bill also imposes strict liability on a private entities when an employee or person closely associate with that entity is involved in a case of bribery which has the effect or intention of obtaining or retaining business or any other advantage for that private entity.

The Bribery Bill further introduces substantial liability for non-compliance. In this regard, falling foul of the Bribery Bill could result:

• in a hefty penalty of up to KES 1 million and or imprisonment for a period not exceeding 10 years imposed on individuals who are found to be in contravention of the Bill;
• directors, partners or senior officers of private entities facing jail time of up to 12 months if the entity does not comply with the mandatory obligations; or
• in individuals being barred from serving as a director of a company or a partner of a firm in Kenya for a minimum of 10 years, whilst firms may receive a ten year ban from transacting with the National or County Government.

John Oxenham, a legal practitioner with Pr1merio Ltd., admonishes that “[t]here can be little doubt that the proposed bill will have a significant impact on entities looking to conduct business in Kenya. It remains to be seen, however, whether the dual approach to targeting parties involved in instances of bribery will effectively curtail the ‘demand side’.”  In this regard, as with most anti-bribery or anti-corruption pieces of legislation, the success of curbing such practices depends largely on the effective enforcement efforts of the relevant agencies. Accordingly, in order to meaningfully combat corruption, a collective effort is required by all enforcement agencies as many individuals who engage in corrupt activities, are not deterred by the knowledge of engaging in unlawful conduct, but rather by the risk of getting caught and successfully prosecuted.