Woolf's BAE Ethics Review Calls for Tougher Anti-Bribery Controls

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BAE Systems, the defence giant which has been dogged by corruption allegations, has admitted eth-ical failings in the conduct of its business, a report revealed yesterday.

An independent inquiry chaired by the former Lord Chief Justice, Lord Woolf, revealed that "both the chairman and the chief executive [of BAE], in discussions with us, acknowledge that the company did not in the past pay sufficient attention to ethical standards".

The report, commissioned by BAE in the wake of a series of scandals, concluded that while it had cleaned up some of its business practices, it still had "a substantial task ahead if it is to meet higher standards".

The disclosure comes as the House of Lords prepares to rule whether the Serious Fraud Office should re-open its inquiry into BAE's arms deals with Saudi Arabia. The Law Lords are reviewing whether the SFO unlawfully terminated its investigation into claims that BAE illegally paid hundreds of millions of pounds in bribes to secure part of a 43bn arms deal between Britain and the Saudis in 2006. The al-Yamamah deal was signed in the 1980s but continued into the 1990s, and involved BAE selling Tornado and Hawk jets, as well as other weapons, and also included long-running maintenance and training contracts.

BAE has been dogged by allegations of unethical practices, which have damaged its reputation and also drawn in the Government. Lord Woolf's report sets out 23 recommendations for the company, which BAE has pledged to implement. Both the chairman, Dick Olver, and the chief executive, Mike Turner, "acknowledged that the company did not in the past pay sufficient attention to ethical standards and avoid activities that had the potential to give rise to reputational damage", said the report. …