Examination of Witnesses (Questions 40-49)|
CBE AND MR
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
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
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
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
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.