14th April 2022

Three lessons from the Amec Foster Wheeler DPA

The SFO recently released the Statement of Facts following its Deferred Prosecution Agreement (DPA) with Amec Foster Wheeler Energy Ltd (Amec) in July 2021.

It was the SFO’s tenth Deferred Prosecution Agreement (DPA) since the DPA regime was introduced in February 2014. The Statement of Facts was released following confirmation by the SFO that it would not be proceeding with prosecutions against any individuals connected to the investigation.

The conduct set out in the Statement of Facts is egregious and endemic. The judge, in approving the DPA, was scathing in his assessment of the conduct of senior leaders at Amec. He noted that, but for the fact that the company had been acquired by an innocent party, the John Wood Group, he would not have granted the DPA. The Statement of Facts offers some valuable insights and lessons for corporates who may find themselves entangled in a law enforcement investigation of a similar nature.

1. Have a clear strategy for dealing with material that is covered by legal professional privilege (LPP)

While the material may properly be cloaked by LPP and does not require disclosure for cooperation credit, it is important to consider whether a limited waiver of LPP is appropriate in the circumstances of the investigation and the alleged offending.

If the company has decided that it will cooperate with the investigation, then it may require a degree of pragmatism over privileged material in its possession that will enable the investigation to proceed at pace and assist the authorities to reach a conclusion.

In Amec, there was a limited waiver of LPP over legal advice that had been received by the company in relation to its dealings with agents and public officials. This waiver was regarded by the SFO as part of the extensive cooperation of the company.

However, the parameters of a limited waiver of LPP should be clearly documented and sufficiently detailed to avoid any misunderstandings as to the extent of the waiver.

2. Policies and procedures don’t effect change, people do

Who is responsible for the effective implementation? Do they have the required visibility into frontline operations? The lack of visibility and access to information can be a major impediment to ensuring that the policies and procedures have the desired effect of managing behaviour and mitigating risk.

In Amec, an Employee Handbook was issued in 2001 which contained a Code of Ethics and set out procedures on the use of agents. In 2004, the company issued a Code of Business Ethics & Conduct and subsequent policies and procedures followed over the years. All were circumvented and disregarded by employees who were determined to continue corrupt practices, without the knowledge of the compliance department. They appeared to have been blind to the “culture of disregard” or powerless to stop it.

Those responsible for implementation of policies and procedures must have the visibility into highest risk operations and the authority to effect change.

3. Avoid ‘paper’ internal investigations and reviews

The simplified essence of an internal investigation is to identify the issue, resolve it and mitigate the risk of reoccurrence.

The collection of factual information that alludes to corporate misconduct and potential criminal offending should be a call to action and not to carry on regardless. Senior leaders should be committed to taking the steps needed to resolve the identified issues and implement measures to stop such conduct from reoccurring.

Amec instructed the same law firm to conduct four separate internal investigations, between 2007 and 2010, into suspicions of bribery in India, Malaysia, Saudi Arabia and Nigeria. Each investigation uncovered evidence of corruption and yet senior employees at Amec did the bare minimum to tackle these issues.

Those who are instructed as an external resource should ensure that they have requisite independence and impartiality, otherwise the investigation is undermined and is an expensive exercise in futility.

Advice and support from ESA Risk

For advice and support on fraud prevention and investigations, please contact Lloydette Bai-Marrow, Serious Fraud and Economic Crime Consultant at lloydette.bai-marrow@esarisk.com, on +44 (0)843 515 8686 or via our contact form.

 

First published in the Parametric Global Consulting newsletter.

 

Image: IgorGolovniov / Shutterstock.com

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