Examination of Witnesses (Questions 1-19)|
CBE AND MR
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
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 sectorsparticularly construction and the
arms tradea 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
BillI do not know whether that has been supplied to the
Committeewhen 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
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
Q15 Chairman: It seems extraordinarily
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
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,
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.