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Case Studies
Awarding contracts through favouritism
A plant engineer of a hi-tech electronic product manufacturer was responsible for maintenance of the company's production facilities. The plant engineer came to know a maintenance service supplier who frequently treated him to lavish entertainment at clubs and leading restaurants. Later, the supplier invited the plant engineer to join his company as a partner and promised him a share of the company's annual profits if the plant engineer agreed to award more contracts to him thereafter. Mindful of the supplier's past generosity, the plant engineer felt embarrassed to turn down the supplier's offer.
Case Analysis
The plant engineer might contravene the Rules of Conduct of the Hong Kong Institution of Engineers if he concealed his personal interest in the supplier's company and secured business for the supplier who might not be the best capable service provider for his company.
Both the plant engineer and the supplier might violate Section 9 of the Prevention of Bribery Ordinance (POBO) if the partnership, which could be an advantage under the POBO, was offered and accepted without the permission of the electronic product manufacturer.
Although entertainment is common in business practice, the plant engineer should avoid accepting excessive entertainment that may affect his objectivity in discharging duties. He should also check whether his company has any policy on the acceptable level of hospitality offered by contractors/vendors to prevent any conflicts of interest or the potential for such a conflict.