Resources
Case Studies
Accepting advantage from subcontractor with close personal relationship
Peter was an engineer in a private construction company. He had been assigned to supervise works carried out on site drainage in the eastern district of Hong Kong Island. The job was awarded to a subcontractor and the director Stanley was very happy as the project brought in good money and would be renewed annually.
Stanley knew that one of Peter’s hobbies was buying new cars. So each time they met the conversation would invariably turn to the purchase of cars of various makes. Peter realised that Stanley was indebted to him in a way as Stanley’s company secured the contract only by a twist of good luck when others failed to meet the stringent requirements set by Peter. One day, while chatting, Peter told Stanley he intended to place order for a new limited edition RV Van and he was about to pay the deposit. But he was in a bit of difficulty over the cash flow at the moment. Stanley discreetly offered to make the payment for him, and insisted that he need not bother about returning the money so soon.
“It can wait,” Stanley said, “You know it has nothing to do with our business relationship.”
Should Peter accept this loan? Did Stanley mean it to be a loan or was it an offer in disguise in appreciation of what had happened? What would be the best line of action? At the end of the day, could Peter let other people know about this arrangement without any scruples?
Case Analysis
Under Section 9(1) of the Prevention of Bribery Ordinance (POBO), it would be an offence if Peter (an employee), without the approval of his employer (the construction company), accepted advantage as a reward for awarding contract to Stanley.
According to Section 2 of the POBO, advantage means any gift, loan, fee, reward or commission, employment, contract, service, favour, payment, release or discharge of loan or liability, etc. Therefore, the deposit offered by Stanley for the car purchase can be regarded as advantage.
Stanley might also violate Section 9(2) of the POBO for offering bribes.
In fact, Peter faced a conflict of interest situation when having a close relationship with Stanley, a subcontractor under his supervision at work. Peter should exercise his professional judgement to keep a professional distance with Stanley in order to maintain his objectivities. He should also observe and follow his company’s policy on handling conflict of interest and made declaration when appropriate.
Moreover, Peter might also violate the Rules of Conduct of Hong Kong Institute of Engineers if he failed to discharge his professional responsibilities with integrity, dignity, fairness and courtesy and subject to disciplinary sanction, e.g. suspension of professional qualification.