Joint ventures and anti-corruption procedures are two key topics affecting the shipping and commodities sectors according to experts at global law firm Clyde & Co.
The firm, which has 27 offices worldwide, held a seminar for a host of industry specialists as part of International Petroleum Week at The Dorchester Hotel in London on Wednesday.
Partner Nick Austin discussed the possible impact of the UK Bribery Act on the shipping industry after its introduction last year, while legal director Owen McHugh spoke to delegates about joint ventures.
Nick said: "The seminar looked at two quite separate topics, but these are both issues we are increasingly being asked about by clients and which are going to be a key focus in the future."
Owen said: "We have seen more and more joint ventures over the last 18 months to two years and it seems to be a sign of the times."
Members heard Owen's assessment of the market and the best ways to approach joint ventures – but were warned not to avoid the difficult topics.
He added: "People tend to shy away from talking about deadlock issues or termination issues – no one likes to talk about the end of something when it's just beginning. But it is important, especially in 50/50 JV's, to control the balance of power and you need to lay out what would happen should deadlock or dispute arise."
Nick spoke about the main elements of the UK Bribery Act and its impact on the shipping, oil and commodities industries, stressing the importance of ensuring that adequate procedures are in place to prevent bribery by anyone associated with the company.
"Precautions will need to be more rigorous and detailed in the shipping and oil sectors as these industries are generally high risk areas. In the shipping and oil business in particular, several practices which were previously seen as as normal will now fall foul of the legislation," Nick added.
"Although the Serious Fraud Office understands that the practice of making facilitation or "grease" payments cannot be eradicated overnight, they are looking to businesses to ensure that they are taking the necessary steps."
Members were also advised of six guidelines, released by the SFO, to help businesses understand when the SFO might tolerate facilitation payments being made:
- Whether the company has a clear issued policy regarding such payments;
- Whether written guidance is available to relevant employees as to the procedure they should follow when asked to make such payments;
- Whether such procedures are being followed by employees;
- If there is evidence that all such payments are being recorded by the company;
- If there is evidence that proper action (collective or otherwise) is being taken to inform the appropriate authorities in the countries concerned that such payments are being demanded;
- Whether the company is taking what practical steps it can to curtail the making of such payments.
Nick added: "If the answers to these questions are satisfactory then the SFO has suggested that the corporate may be shielded from prosecution."