Joint Committee on The Draft Corruption Bill Minutes of Evidence


Examination of Witnesses (Questions 1-19)

MR LAURENCE COCKCROFT, MR JEREMY CARVER CBE AND MR GRAHAM RODMELL

13 MAY 2003

  Q1  Chairman: Thank you all very much for coming and for the paper which you provided for us. This is the first session in which we have taken oral evidence. The Committee has already received 20 or so statements from various interested bodies and groups. From now until early June, we shall continue to take oral evidence on the basis of some of the written documents which we have. It is hoped that we can have our report ready to be presented in July. May I invite you to answer questions and to add any further comments if you would like to do so on the report you presented? Perhaps you would be good enough to introduce yourselves and could you tell us what the company is and what its objectives are?

Mr Cockcroft: My name is Laurence Cockcroft. I am the chairman of Transparency International (UK). We are part of a set of 90 national chapters of the international network of Transparency International which is an NGO that is 10 years old and has been providing advocacy and lobbying on the corruption issue worldwide for the last 10 years. We are active in the UK and in a number of places. Our secretariat is in Berlin.

  Mr Carver: Jeremy Carver. I am also on the board of management of TI (UK). I am an international lawyer and until very recently I was a partner in Clifford Chance. I am still a consultant and I have been concerned in corruption issues and corruption cases for at least the last seven or eight years and, in some senses, possibly even longer, for as long as I have practised law, primarily international law, representing and advising governments.

  Mr Rodmell: Graham Rodmell. I hold the post of director of corporate and regulatory affairs for Transparency International (UK). I am a solicitor but not practising. I am a consultant, but I spend most of my time working for TI (UK). I was formerly general counsel for CDC, a government owned investment organisation.

  Q2  Chairman: We have been told already that the main problem here is in relation to the public service, broadly understood. Professor Robert Neild has suggested that perhaps the opportunity for corruption has increased with the way in which the work of the Civil Service has been changed over recent years, with much of the public service work being contracted out to other bodies, with new agencies acting in the sector which previously would have been done by the Civil Service and perhaps it may have been increased by the changes which have been made to the managerial structure of the Civil Service. Do you agree with that? Has this added to the possibility of corruption and to actual corruption?

  Mr Cockcroft: I am familiar with Robert Neild's line of argument and I think it is quite persuasive because he has shown that the code of conduct that might be assumed to govern written or unwritten Civil Service procedures and ethos has been seriously changed by those institutional arrangements. One has to give some credence to that as a threat, because it simply means that the opportunities for people to behave according to a different set of values to those which historically have been preserved in the Civil Service have changed.

  Q3  Chairman: The Committee on Public Service investigated these matters and commented on them. Why do you think this has happened?

  Mr Cockcroft: Simply because the decisions being taken within the devolved institutions are much more complex, much more diverse and involve dealing with a much larger number of contractors and subcontractors than would have been the case before that devolution took place. The appointment of the individuals concerned is being carried out on a completely different basis, not by the Civil Service, but by those companies who are providing the service.

  Q4  Chairman: Yet the main prosecutions have not covered people in the private sector in the way they have in the public sector, properly understood.

  Mr Cockcroft: That is true.

  Mr Carver: The public sector as such has become a much broader and less well defined body of people. The complexity, I suggest, of modern life is such that wherever you have any deterioration in definition of function you will always find corruption creeping in. It is simply a complement of the process whereby complexity breeds deterioration, breeds corruption or the propensity for corruption. Much of corruption is not to do necessarily with straightforward greed. It is simply a response to the fact that things do not get done in the right way. I suggest that it is largely a factor of the increasing complexity of life where public service is no longer clearly defined at all; where many, many functions are performed by private sector actors. It is not so much that the private sector is intrinsically more corrupt than the public sector. I do not believe that at all. But I do believe that where you have this confusion you will have an increasing tendency for corruption.

  Q5  Chairman: I understand that very well but does it apply in the same way to the contracting out of services which by definition are contracting services to the private sector where you do not have the same extent of the problem?

  Mr Carver: I am not in a position to say dogmatically that that is the reason for it. I believe instinctively that, where you have confusion, you will inevitably find corruption in a variety of different manifestations. It is not necessarily the classical form of taking money for the delivery of service.

The Committee suspended for a division

  Q6  Chairman: We have considered the change in the structure of the Civil Service. Are there any other factors in the way that government operates these days, whether in this sort of country or another type of country, which add to the risk of corruption? The World Development Report last year identified a number of factors which increased the risk of corruption, including different methods of regulation and so on. Apart from changing the Civil Service structure, are there any other factors in this country which have increased the risk of corruption?

  Mr Cockcroft: Generally speaking, the close relationship between some areas of government and the export drive, which is entirely desirable and legitimate in itself, creates in some sectors—particularly construction and the arms trade—a conflict of interest which is not being dealt with very adequately. We think that is one of the explanations for the wording of this Bill which I am sure you will want to come on to.

  Q7  Chairman: These are not peculiar to the United Kingdom?

  Mr Cockcroft: That is correct.

  Q8  Chairman: Are there ones which are particularly relevant here?

  Mr Cockcroft: This country has certainly taken a very high profile in its own promotion of the arms trade and to some extent in the construction industry. If one wants to look at the way in which our arms exports are handled and supported by DESO, the Ministry of Defence and so on, one can see the quite close relationship between that export drive and UK leading exporters. In that case I think there is an issue. Secondly, on the question of privatisation; not only in this country but overseas, privatisation has run apace during the last 10 years. That has created a hugely different climate in many countries where decision making has therefore been taken well away from government; where the privatisation arrangements themselves have frequently been corrupt and where the follow-up activity between the privatised agency, which may be providing a service to the public such as water, and contractors and subcontractors is a very different cup of tea to that which prevailed 15 years ago.

  Mr Carver: I would urge the Committee not to under-estimate the importance of export business for the United Kingdom. It is not so much what is revealed by official statistics but a vast volume of business is assembled through the United Kingdom and it is very important, in our view, that we have an exemplary law which demonstrates that there is no tolerance at all for the type of business practices that have developed in a very fluid market, with opportunities being taken without really any reference to clear laws. There is one other factor that is very important which is the clarity of law. If law is not clear, business does not know quite what to do. They will find whatever level is appropriate in order to secure business. If the law is clear, business by and large, 99 per cent of business, will abide by it. They have clear reference points against which to conduct whatever activities they carry out, but where the law is unclear it will simply always be shaved. Clarity of law is another vital issue, in my view.

  Q9  Chairman: There are two very different issues here. One is whether what the Bill is proposing to do is the right thing and, secondly, whether, accepting its objectives and what it is trying to do, it has made it as clear and simple as possible so that businessmen know what it demands and how its procedures are going to be enforced. Is this present Bill as clear and simple as possible?

  Mr Rodmell: We rejoice that there is to be a reform of the law on corruption because the present statutory law has endured for about 100 years. When you come to look at the 1889 Act and the 1906 Act, at least, allowing for the quaint language of that period and the curious forms of public body that existed at that time, when you read the sections you know what it is driving at. You are not left in any doubt as to what you cannot do. When you compare that with the Bill with which we are presented, you probably have to read the entire Bill to understand what it is you are really driving at. You certainly have to read the whole of part one. I find that I and numerous other lawyers to whom I have spoken are struggling with it. This is what has driven us in our paper to suggest that there should be much more in the way of specific offences, particularly if you come to apply those in an overseas situation. If you take as an example a specific offence which there is in the South Africa Bill—I do not know whether that has been supplied to the Committee—when you read the specific offence, it is self-contained and you understand what it is driving at.

The Committee suspended for a division

  Q10  Chairman: Assuming that the approach, the road map, they have taken is the right one, could it be done in a more simple form to make it easily understandable to people or do you have to go through all these technical provisions that we have in this Bill?

  Mr Rodmell: I think the technical provisions in the Bill will make a field day for lawyers but will not be helpful to the average person who has to refer to it in terms of seeing what it is driving at.

  Q11  Chairman: How would you do it?

  Mr Rodmell: Could I illustrate this by taking you to the South Africa Bill? There is a specific offence which is of interest to us. Picking up on the OECD Convention for Bribery of Foreign Public Officials, when you read this offence, it says, "A person is guilty of an offence if he or she, in order to obtain or retain business or an improper advantage in the course of business, corruptly gives or agrees to give a gratification, whether directly or indirectly, to a foreign public official (a) as consideration for such official performing or failing to perform any of his or her public functions; or (b) to induce that official to use his or her position to influence any acts or decisions of the foreign state or public international organisation concerned." That is a self-contained section. There are terms within it that are defined in a definition section of the Bill. When I try to imagine how I would put that offence within the current Bill, I find I have to look at numerous clauses. I have to look at least at one and three or two and three. I then have to look within the body of the Act at what is meant by conferring an advantage. I then have to look at an extremely complex clause five to decide what is the meaning of "corruptly" which involves proving questions of what are the elements which primarily affected the person doing the act or refraining from doing the act. I also have to look at whether he believes that that is the primary purpose of what was being done. Even as a prosecutor, I then have to think about whether one of the defences in clause six or seven applies. I then have to look at eight and nine as to what is really meant by an advantage in clause two. I may have to look at 10 if I am dealing with an agent performing his functions as such. There is again a very complex and difficult clause dealing with what is the meaning of "agent" and "principal". If you leave any of those out, you do not get a sense of what the Bill is driving at. If I think about translating that into obtaining evidence from another country and issuing commissions rogatoires translated into the language of that country, which could be French, Spanish or Swahili; these are concepts which are difficult enough in English, so I think it is absolutely formidable. I do not think one needs to go wholly for this broad approach, which I know has been welcomed by some other people who have put in papers to the Committee, or wholly for specific offences. The broad approach is so complex that it will be totally ineffective. I am not exaggerating, I do not think.

  Q12  Chairman: Apart from the South African model, have you had a go at drafting a very simple Bill which would follow the broad approach that we have here?

  Mr Rodmell: No, I have not.

  Q13  Chairman: Has anybody done it in an effective way in other countries or in any other form of legislation?

  Mr Rodmell: I do not feel that we have made a sufficient study to say. I think the South African one presents what I might call a third way in that you have a number of specific offences. If something is clearly within the mischief at which that section is aimed, no one is going to have any difficulty in understanding it. No one is going to have any difficulty in another country in understanding it and the thing can go forward. That does not mean to say that there should not be a more generally expressed offence to sweep up and catch those that might otherwise escape through there not being a specific offence targeted at that set of circumstances. I think it would be a great mistake to have to rely upon judges' directions throughout.

  Q14  Mr Stinchcombe: What is the definition of the word "corruptly" in South African law?

  Mr Cockcroft: Providing gratification to an individual, enabling an individual to be gratified by a payment or some other favour.

  Mr Rodmell: I can quote the first two or three lines: "`Corruptly'" means in contravention of or against the spirit of any law, provision, rule, procedure, process, system , policy, practice, directive, order or any other term or condition pertaining to certain relationships . . . the performance of any function in whatever capacity." It is very wide.

  Q15  Chairman: It seems extraordinarily wide.

  Mr Rodmell: It is. I am not necessarily commending the drafting. I think a smart parliamentary draftsman could probably do better but it does convey the impression of a sense of impropriety and dishonesty which is not obvious in our Bill.

  Q16  Chairman: It certainly does not scream out that you are talking about dishonesty or impropriety.

  Mr Carver: Probably the drafting of this Bill has largely been informed by a concern not to leave things out, not to leave gaps. Therefore, one has virtually an all-encompassing Bill catching virtually anything. One of the particular concerns that has been expressed to you in writing is that there are vast areas of ordinary interfaces between the public and the provision of services which are almost certainly "corrupt" by definition, although there is no element of dishonesty involved in the process at all, even to the point of paying for motorway tolls and things like that. That sort of activity can be caught. The essence of what is corruption is caught in that definition in the South Africa Bill which is that it is "contrary" to something. The difficulty one has in drafting a definition of corruption is that most people say, "It is like an elephant. I will know it when I see it", but that is not satisfactory for law making. You have to have something clearer. If you confine it to breaking something , what are you breaking? The South African definition takes a very broad sweep through something being broken in order to produce a corruption. That is why it is a more commendable effort than this Bill which strives to be part of a process whereby you include everything and then you exclude certain things. In the process, you rely upon an exercise of discretion which, to my mind, makes the Bill something that is really for the benefit of just a few of us. You, my Lord Chairman, and I are lawyers. Is it a Bill just for the benefit of lawyers in terms of interpreting and all the other elements that a lawyer will exercise his or her skills on, or is it something that is supposed to be for the citizen or business that needs to understand how to conduct a business life in ordinary, social intercourse?

  Q17  Chairman: In the general approach in this Bill, there is obviously still much emphasis on the agent/principal relationship. Is that something that is necessary? Is it something which, if it is kept, could be dealt with more simply, more clearly, in the Bill or could it be got rid of altogether?

  Mr Rodmell: I do not have a problem with the agency concept as such but that is in the language the Law Commission uses—"agency of the type recognised and understood by lawyers." Where I have a problem is when the concept of agency gets stretched to such an extent that almost by definition it is not of the type understood by lawyers. That is the danger. That may be the trap the draftsman has fallen into here. They have stretched the meaning of "agency" beyond what is going to be understood not just by lawyers but by the normal people who are going to have to refer to the Bill. The whole concept of agency for the public is a very difficult one, particularly when you look at the way "public" is defined. If I can refer to that clause dealing with agent and principal, clause 11(3): "A person is an agent performing functions for the public if the functions he performs are of a public nature." Functions of a public nature are very difficult to define in today's world because I do not know where they begin and end. I think it means those sorts of things that have been privatised and are now all in the private sector, but we should not have to refer to the history of services to define what is of a public nature. "A person is an agent performing functions for the public . . ." is one thing. They have to resort to that because clearly "agency" is not capable of being extended to a functions basis without defining an authority for which a person or company is an agent. It is a difficult concept. Agency is there already in our existing 1906 Act, section one, so with more modern language that could be brought up to date. There the agency concept is not being unduly stretched. It is what lawyers understand by the meaning of the word.

  Q18  Chairman: Another topic that also comes from the past is the presumption of corruption. Is it necessary or desirable that the law today be still kept in the present form?

  Mr Carver: My understanding of the Bill is that the draftsmen have sought to eliminate the presumption on the basis that it might infringe the European Convention of Human Rights. I have never been convinced that this is the right analysis. What is needed is a definition of the offence that is sufficiently clear so that the prosecutor knows what the ingredients are that he or she has to demonstrate in order to present the case to court. If you get the definition of the offence right, there is not any problem about whether or not you are going to transgress the European Convention or any other human rights covenant. The fact is that you will have satisfied the necessary ingredients in order to establish the offence.

  Q19  Chairman: If you do that you do not need the presumption?

  Mr Carver: You do not need the presumption as such. It is what the jury is entitled to infer from a set of circumstances. That is what is necessary. If you have been clear about that, you do not have to get into the problems about presumption or otherwise.


 
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