Ferdinand Balfoort
Director
At a public hearing on 31 January 2020, the British Courts found Airbus SE guilty of bribery in a large number of countries globally, and ordered it to pay nearly one billion pounds in fines as part of a Deferred Prosecution Agreement. This was part of a total estimated global fine of around three and half billion pounds, to be additionally paid in France and the USA. So far, bribery evidence has been found and confirmed in around 13 countries, many of these low ranking on the recently published Transparency International Corruption Perceptions Index (TI-CPI), including China, Russia, Saudi Arabia and Nepal.
Airbus’s fines are extraordinary. To put into context, the British fine is greater than the total of all the previous sums paid under other judgements. It is more than double the total of fines paid in respect of all criminal conduct in England and Wales during 2018.
The judge found the criminality involved has been grave. Airbus and its employees, in order to increase sales, paid bribes in various forms to third parties to induce them to act improperly. The judgement also noted that Airbus had no proper and effective systems in place to prevent such behaviours. This is a surprising finding because in 2019, Airbus was the largest global aircraft producer by number of aircraft sold. Also notable is that Airbus is still substantially owned by the governments of Britain, France, Germany and Spain, in addition to private-sector shareholders.
Lessons learnt are that no matter how large and reputable an organisation regardless of whether it is private or public, systems and anti-corruption preventative measures may still be weak and ineffective to prevent bribery.
This should be a wake-up call to all New Zealand organisations to review the risks around corruption and bribery internally, to ensure these risks are effectively tested and managed. Boards and stewards of organisations cannot relax in the belief that such a thing does not happen in their apparently well run and successful entities.
A final lesson, I believe, is that when doing business with countries that are poorly ranked on the TI-CPI index, companies should be especially vigilant. This is especially the case when engaging with third-party intermediaries and service providers, who should also be legally bound to prevent them from becoming bribery gatekeepers.
Facts have been checked by reference to this legal judgement: Director of the Serious Fraud Office v Airbus SE. See also Airbus bribery fallout investigations launched worldwide.
We note that Air NZ owns about 30+ Airbus aircraft.
