Joint Committee on The Draft Corruption Bill Minutes of Evidence


Examination of Witness (Questions 348-359)

PROFESSOR MARK PIETH

2 JUNE 2003

  Q348  Chairman: Professor, we are very grateful to you for coming to help us in this inquiry. We understand that there is a time limit because you have to catch an aeroplane but thank you very much for coming. We understand that you are the professor of criminal law at the University of Basle and that you are chairman of the OECD Expert Group on Bribery in Commercial Transactions. Obviously, we want to ask you quite a bit about the OECD and some of the other international conventions which we want to look at when examining the terms of this Bill. We have had a bit of difficulty in getting some of our witnesses perhaps to identify what exactly "corruptly" involves. That is at the heart of this inquiry. We have been told by a famous judge that any jury would know exactly what it means so you do not need to define it. What do you consider to be the key ingredients, the key aspects, of bribery or corruption offences? Is it simply dishonesty, secrecy, or are there other factors that matter?

  Professor Pieth: I would like to thank you for this opportunity. It is well viewed by the OECD that we have a chance to talk before the law is enacted in some states. The question you are referring to is a very specific one and, from my view, it only arises in the British context because if one followed the wording of the Convention we use a different word. We use "undue payment". The advantage of that term is it is an objective term saying that this is not, for instance, what people are entitled to receive like tax collectors will take taxes or employees will receive a salary. Clearly, undue payment means it is illegal from the beginning. Your concept of "corruptly" puzzles us quite a bit. That is one of the difficulties we have. I have understood "corruptly" to mean "intentional". So far we have no problem but as far as you use the concept of "corruptly" to take out other bits and pieces I think it is rather vague. I am not an expert in common law. The role we have in the OECD is quite a different one. We work under a concept called functional equivalence which basically means you do whatever you have to do under the obligations of the treaty in your own legal spirit, with your own approaches. We just test whether you meet the goal at the end.

  Q349  Chairman: If one gets away from the actual wording of the OECD Treaty and the other international treaties, you ask yourself what is "corruptly"? What does it involve? You said "intentionally" is one aspect of it.

  Professor Pieth: To go through the concept that we are applying, we first of all consider bribery. You know that we are just talking about the supply side of bribery in the OECD; we are just talking about active bribing of a foreign, public official. You have two parties, one who promises or pays to someone else for an act or omission. The advantage that he has to pay or deliver is an undue advantage. That is the qualifier we use and require. You can do what you want with it but we will certainly come back and ask questions if you write "corruptly" into your law, because the concept of "corruptly" is, for us, too vague. It gives you much too much leeway to throw out cases we do not want you to throw out.

  Q350  Chairman: It is important that we have an idea of corruption. Otherwise, we cannot say whether this Bill is achieving what we think it should be.

  Professor Pieth: Yes. The point is that somebody promises illegal payments. That is to say, payments the recipient is not entitled to, for specific behaviour in his profession, be it acting or omitting. We insist on that being illegal. Otherwise, you capture perfectly legal activities and that is one of the problems I have with your law. It is very broad at the beginning. Clauses one and two capture next to everything and then you have to, in six and seven, try to take bits and pieces out of it which are absolutely normal behaviour. We would say why do you not use the convention that says very clearly, in five lines, what is to be forbidden. 34 countries in the world representing all your competitors in the international terrain have simply done that. They have just copied it. I have no quarrel with you in using a different concept, an agent concept. That is up to you, but we will test in the end whether we are convinced. The burden of proof is on you. You prove to the OECD that you are choosing an adequate manner to transpose what you have been signing up to.

  Q351  Chairman: As professor of criminal law, in your concept of "corruptly", can you corrupt or be corrupted or can you bribe or be bribed honestly? Does there have to be an element of dishonesty in it?

  Professor Pieth: We do not make that distinction. We say if somebody meets the objective requirements here—promises, pays—to somebody who is a foreign, public official with an undue advantage, we are not concerned whether that is honest or dishonest. It is a speciality of British law that you have a concept of dishonesty. Frankly, we are not bothered. We want to see that you capture the cases that you have signed up to. The Convention gives you the framework. We will test you against the Convention. Frankly, you have fallen through the exam once, in the first round. The second round you have slipped through but you are trying to take away that legislation that you passed and we are giving you, hopefully, a third chance. We hope to reach a common result but the difficulty is that we are getting a bit restless because we are asking ourselves what is the reason that Britain, as one of the only countries, has such difficulty with an issue that is so fundamental in international business? Are you protecting your business for some reason?

  Q352  Lord Waddington: One thing is clear, is it not? That is that the idea of an undue advantage is well established in a number of international conventions. Is it right that you get this concept of an undue advantage both in the OECD Convention, in the EU Convention and in the Council of Europe Convention?

  Professor Pieth: That is perfectly right. Additionally you find it in one of your common law rules in the reports. In the common law language in case law, you use the word "undue". You do not use the word "advantage", but something that amounts to the same thing.

  Q353  Lord Waddington: Can I take it a stage further? None of those conventions, the OECD Convention, the EU Convention and the Council of Europe Convention, envisages that it should be an offence merely to offer money to the agent of a government or a public body. They all envisage that there has to be something more. There has to be more than the offering of money. There has to be the offering of money with some improper motive in order to get an undue advantage. Is that correct?

  Professor Pieth: It is. There is an element already on the objective side that this person is not entitled to the money because we want to exclude with the word "undue" all the cases where somebody is allowed to receive taxes or a salary. It is not only the subjective perspective of doing something unduly or corruptly; on top of it, the money is not due.

  Q354  Lord Waddington: Do you not therefore find it surprising that this Draft Corruption Bill seeks to criminalise the payment of money to an official without any guilty intent at all?

  Professor Pieth: If I understand the Bill rightly, in all fairness, one has to say it first defines the crime very broadly. It has to specify later on in clauses five and six and take out the cases that were not intended.

  Q355  Lord Waddington: We have already had, for instance, a witness with a very prominent firm of solicitors in the City of London saying that this Bill would criminalise the payment of a toll to an official collecting money at the entrance to a toll road. There is nothing whatsoever, even if you look in clauses six or seven, to suggest that it would not be criminal for that agent of that public body to receive a payment. This Bill is odd, is it not, in that it seeks to criminalise the payment of money to an agent without any improper motive at all?

  Professor Pieth: If what you say were the case, we certainly would find it strange. I was trying to give clauses six and seven, as far as possible, the benefit of the doubt. I must admit that clauses six and seven are, for me, unintelligible as a continental lawyer, but maybe your lawyers can do better. I have the problem that our requirement is that not only your lawyers and your jurors but your exporters understand the law. Anything below that will not be accepted by the OECD.

  Q356  Chairman: You emphasised earlier the objective nature of this as far as your concept of corruption is concerned. There has to be, has there not, a mental element?

  Professor Pieth: The mental element is the intent and even there it would be enough that somebody is speculating with the idea that somebody could misunderstand or understand the right way. The mental element is toned down very much in our concept. We are concentrating on the objective nature and you are perfectly right. You should not qualify perfectly legitimate behaviour because then you are making what we are aiming for ineffective. Our problem is not that you might be too broad. Our problem is basically that, in this wording, it is very difficult to understand and maybe even more so we are lacking one element which does not come out very clearly. The one requirement we are looking for is that it says the active bribery of a foreign, public official is captured. We are reading that this is the case but we had difficulties with the situation in 1906. We were not convinced that this was really the case fully. We had questions to judges and Members of Parliament. Now in the Anti-Terrorism Bill 2001, I think we have the idea. You were more explicit there. You did capture explicitly foreign, public officials. Here again, it is so broad that it does not say anything. We will be puzzled and we have doubts that your engineers, to take an example, know what they have to do. That is the point where we are going to dig in.

  Q357  Chairman: What you have said raises two things. The first is that following on from the note we had from the OECD secretariat they say that a statute which is so broadly drafted and theoretical cannot or is unlikely to achieve the objectives of the OECD Convention. How would we get away from that objection on the part of the OECD?

  Professor Pieth: We have two interests. We have the interest that you, as fast as possible, fulfil the requirements and we have the interest obviously that you fulfil them fully. We have been asking for that in what we call phase 1bis, the document you have at your disposal. We will soon have new legislation. There are two ways, basically. We have no quarrel with the approaches you take because that is your own responsibility. That is not our issue. You could save a lot of the situation if you inserted one clause making it very clear that the foreign, public officials are covered. Then I would only have about five more difficulties. I have six major difficulties with your law as it stands at the moment. That would be our three star deficiency, which would mean that we would have to express in some diplomatic language that we would have to re-examine you again under this phase. This would be very difficult because your counterparts in Nigeria and Kenya etc., are looking at this situation. You can offload texts on the internet and they are reading that the UK, next to Japan, has one of the only laws that flunked the exam under phase one.

  Q358  Chairman: Apart from the fact that the Bill does not specifically refer to bribery of foreign, public officials, why is this Bill so broadly drafted and theoretical and therefore not one which practically can be enforced?

  Professor Pieth: It appeared to us when we read it that in clauses one and two near to everything is captured and later on you have to take things away again. I am taking a salary from the university. Is that corruption? I think it is difficult if you bring that remotely into the area of corruption. People are bound to misunderstand. There is a certain hesitation from outside to come in and say, "Draft your laws differently". I have with me this folder and all the other countries have simply picked up in one way or the other the language of the Convention. Take Australia, Canada and the US. The law is a bit more complicated but most common law countries simply replicate what you have in the Convention.

  Q359  Lord Carlisle of Bucklow: Do they all use the word "undue"?

  Professor Pieth: Yes, mostly.


 
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