Joint Committee on The Draft Corruption Bill Minutes of Evidence


Examination of Witnesses (Questions 40-49)

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

13 MAY 2003

  Q40  Mr Garnier: Are there sections and clauses from the South African legislation, I think you have read out bits, but also from the other foreign acts which you commend, which we could usefully steal and make useful for our purposes?

  Mr Rodmell: There are a number of provisions but I do not know whether they fall within our brief or that of the Committee. For example, there is a duty in the South African Act for people to report bribery. I do not know whether policy-wise the UK legislature would go quite that far. Obviously because corruption is such a covert offence, if you take away, in view of Jeremy's comments, a presumption clause because that raises Human Rights Act issues you should think about an evidential inference clause. If that is to be removed totally, you are losing one tool. If you then remove or do not insert something which compensates for that, be it disclosure of assets by public officials for the public area or be it a duty to report corruption which comes within the knowledge of particular public servants, or indeed within the private sector, either to report to superiors or outside to the police, those need further examination. However, they do not fall within the concept of this Bill so we did not put them in our paper. Yes, given a free hand there would be a number of other provisions that we would like to see.

  Q41  Mr Garnier: But if we are in the business of "bringing up-to-date" the law of corruption I do not think we need to be confined to the draft Bill with which we have been provided. If that is not right, our advice should be to do something else and if you have got some information to make that advice better I for one would like to hear it.

  Mr Carver: It seems to me that is part of the homework the Committee may be setting us!

  Q42  Mr Garnier: Just on a matter of detail, is it your view as an organisation that the granting of soft loans, loans below the current market interest rate, are prima facie corrupt?

  Mr Cockcroft: It depends on the context.

  Q43  Mr Garnier: Let's take the case of a company that would not do it, Shell or BP, the ones that you say have zero tolerance. If they wanted to have a deal with a foreign company or even a foreign government, and part of the way of getting that deal successfully through was to lend the buyer a huge amount of money at a below market rate, would that be an acceptable commercial practice or would that, in your view, be an unacceptable, corrupt practice?

  Mr Carver: I think the test may well be the same test which is; can it be disclosed? If it cannot be disclosed, then the automatic inference is that it is corrupt, it seems to me.

  Q44  Mr Garnier: So there is no room for commercial confidence?

  Mr Carver: I think not; and certainly the way in which the oil industry is reacting to the some of the criticisms it has received over the last four or five years suggests that the oil companies have already accepted that it is essential that they be totally open about the payments that are made. But the mere fact that some sweet deal has been done goes into another area of concern which the Parliament has been concerned with over a number of years, which is state aid. State aid which is given and is of a somewhat covert nature which is not disclosed by government and not sufficiently understood and analysed within the public sphere, is itself a source of corruption, and that is something that has been the subject of criticism in the past.

  Chairman: We have not said very much about the European Union. Have you anything relevant to ask?

  Q45  Mr Stinchcombe: Coming from the last point that you have made, is there any evidence or suggestion of which you were aware that the system of EU subsidies has caused corrupt practices to spread?

  Mr Carver: Anecdotally, I would say that the general perception is that the CAP is rife with corruption, but I have never made a sufficient study of it to be able to say whether that is true or not. It is just the general perception that subsidy produces corruption. I suspect that is probably a generalisation which TI generally accepts.

  Mr Cockcroft: Yes, I think if you extend that to EU-sponsored aid programmes both in the ACP states and in the accession states and further into Europe, that aspect, unfortunately, of the Commission activities is generally considered to be extensively corrupt, much more so than our own bilateral aid programme.

  Chairman: Unless anyone has any specific questions perhaps we could just consider briefly whether, even if you had a general catch-all provision, there are other areas of the law that perhaps we ought to look at?

  Q46  Vera Baird: You drew our attention to two omissions of the Bill, first the offence of misuse of public office, and we have had some submissions from the CPS to suggest that misfeasance in a public office, which exists and has been revised quite a bit recently, would need to be amended to fit that gap. What are your views about that? I think you suggested unless we had an offence of trading in influence we might not meet our international obligations. Is that your view and what ought we take on from that? Should we do something about that, make a recommendation?

  Mr Carver: Yes, we would like to see trading in influence included in the Bill. Misfeasance of public office is rather complicated and we are not so definitive about that.

  Mr Rodmell: If I could offer a comment on the abuse of public office. The point I think we made in our paper is that there may well be a case for having such an offence because it may be very clear that a public official has breached his or her duty. But the main corrupter might be beyond jurisdiction and very difficult to define or catch. I was looking recently at the Law Commission consultation paper and I notice that they referred to some Australian law reform proposals which had a very simple definition, that it was an offence for a public official to exercise functions or influence that the official has because of his or her public office, et cetera. Very neatly defined, not very difficult to prove and which might well be salutary and useful. I do not know what is going to happen to the common law misfeasance in public office offence. I think this Bill is only sweeping away common law corruption, so presumably the misfeasance will stay. I think we need to examine whether it is necessary to have it, but it would be quite neat and it is corruption related.

  Q47  Vera Baird: I do not know if this applies abroad at all, misfeasance in a public office.

  Mr Rodmell: Yes, of course because abroad it would be the concern of the host country, so to speak.

  Chairman: Any other questions?

  Q48  Baroness Whitaker: When you think about all these other things perhaps this is one you would like to think about. It occurs to me that some of these areas of company good practice might be better dealt with by an improved Code of Practice where non-compliance would be prima facie evidence of breach of statute. Thus the company would have to prove they had met the objectives of the statute as set out in the Code. It might do quite well for the facilitation payments issue for instance. It is rather like the Highway Code or obligations under the Health and Safety at Work Act, so guidance is given with a statutory backing where, as I said, you have to show that if you have not complied with it you have done something which achieves the objectives of the statute as well.

  Mr Carver: My understanding is that with the Foreign Corrupt Practices Act in the United States, one of the perceptions that the prosecuting authorities take of a company involved in the payment of corrupt practices is an extensive audit of their control and compliance systems, and it will have an effect on what the Department of Justice, or whichever prosecuting authority is involved, does in response to it. They are tough in enforcing it. Prosecution can often be very difficult. They face the same difficulty prosectors have all over the world in bringing home successful prosecutions of complex crime, but this is certainly one of the things that they expect. I have been struck by the extent to which the Department of Justice in particular has been able to work with companies involved in large-scale bribery in order to ensure that the whole system changes and is seen to change in a way that it is unlikely to manifest itself again. I think this is an important element which companies in this country are beginning to realise has to be done too.

  Q49  Chairman: Thank you very much indeed. It has been an extremely valuable session. We are most grateful to you for coming and for the time you have given. We reserve, if we may, the opportunity to write to you if we have anything else to raise with you. I am sorry you have been kept so late.

  Mr Carver: I have been struck, my Lord, by the absence of any question about Attorney General consent which suggests to me either there is not enough time or, alternatively, the Committee is not concerned about this issue.

Chairman: On the contrary, we were reserving that one. It is one of the first matters we will turn to tomorrow afternoon. Sorry we have been delayed and thank you very much indeed.





 
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