On February 7, 2022, the Serious Fraud Office released the statement of facts following its July 2021 Deferred Prosecution Agreement (DPA) with Amec Foster Wheeler Energy. It was released after the SFO confirmed that it would not pursue legal action against those linked to the investigation.
Amec Foster Wheeler was the SFO’s 10th DPA since the introduction of the DPA scheme in February 2014.
The conduct described in the Statement of Facts is egregious and endemic. In approving the DPA, the judge was scathing in his assessment of the conduct of senior Amec executives. He noted that had it not been 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 valuable insights and lessons for companies that may find themselves involved in a law enforcement investigation of a similar nature.
Have a clear strategy for dealing with material covered by legal professional secrecy (LPP). Although the material may be properly concealed by the LPP and does not require disclosure for cooperation credit, it is important to consider whether a limited LPP waiver is appropriate in the circumstances of the investigation and the alleged violation. If the company has decided to cooperate with the investigation, it may require some pragmatism about the privileged elements in its possession that will allow the investigation to proceed quickly and help the authorities reach a conclusion. In Amec, there was a limited waiver by LPP of legal advice received by the company in connection with its dealings with agents and officials. The SFO viewed this waiver as part of the company’s broad cooperation. However, the parameters of a limited derogation from the LPP must be clearly documented and sufficiently detailed to avoid any misunderstanding as to the scope of the derogation.
Policies and procedures do not affect change. People do. Who is responsible for the actual implementation? Do they have the required visibility into frontline operations? Lack of visibility and access to information can be a major barrier to ensuring that policies and procedures effectively manage behavior and mitigate risk. At Amec, an employee handbook was published in 2001, which contained a code of ethics and set out procedures on the use of agents. In 2004, the company published a Code of Ethics and Business Conduct, and subsequent policies and procedures were followed. All were bypassed and ignored by employees who were determined to pursue corrupt practices without the knowledge of the compliance department. They seemed to have been blind to the “culture of contempt” or powerless to stop it. Those responsible for implementing policies and procedures must have visibility into high-risk operations and the power to effect change.
Avoid “paper” internal surveys and reviews. The simplified essence of an internal investigation is to identify the problem, fix it, and mitigate the risk of recurrence. Gathering factual information alluding to corporate misconduct and potential criminal offenses should be a call to action and not proceed regardless. Senior managers must commit to taking the necessary steps to resolve identified issues and implement measures to prevent such behaviors from recurring. Amec commissioned the same law firm to conduct four separate internal investigations, between 2007 and 2010, into suspected corruption in India, Malaysia, Saudi Arabia and Nigeria. Each investigation has revealed evidence of corruption, yet senior Amec executives have done the bare minimum to address these issues.
Persons mandated as external resources must ensure that they have the required independence and impartiality. Otherwise, the investigation is undermined and is a wasteful and costly exercise.