Case 1- Backhanders
Case 2- Sweet poison
Case 3- Leaks
Case 4- At the crossroads
Accepting free services and excessive entertainment
A project engineer was entrusted with the task of supervising the construction
of bored piles at a residential development project. Without the knowledge
and permission of his employer, the project engineer started to socialise
heavily with the contractors. They then offered to cover his expenses
for a number of things, including trips outside Hong Kong, hotel accommodation,
lavish meals, night-club entertainment, hostess escort services, and mobile
phone charges. He ended up accepting these "free" services and passages.
Sweetened by the contractors, the project engineer then compromised his responsibilities. He accepted the defective piling carried out by the contractors and was lax in site supervision on other piling work. When the completed foundation piles were inspected, most of the work was found to be substandard.
Legal concerns
1. Advantages are not confined to money and gifts:
- Alongside money and gifts, the free services, free passages and discharge
of payment offered in this case, such as all-expenses-paid trips, escorts,
hotel accommodation and phone calls, etc., are also considered advantages
under the PBO. If the project engineer accepts these advantages without
the permission of his employer and then omits to carry out the necessary
supervision of the contractors, he may contravene
Section 9 of the PBO.
- Attention should also be paid to the fact that
under the PBO, advantages also cover any loan of money, offer of employment
or contracts and the discharge of obligations or liability. Please click
on Advantages for more details.
2. Consequences of corruption:
The project engineer will be open to the charge of accepting illegal advantages
as a reward for lax supervision of the foundation works and attempts to
cover up the defective piling. If he is found to have breached Section
9 of the PBO, he can be subject to a maximum penalty of seven years' imprisonment
and a fine of $500,000.
Morals and ethical concerns
1. Avoid sweeteners: Corruption does not always
start with a direct bribe at the outset. As in the situation faced by
the project engineer in this case, it may begin with a sweetening process
laden with free meals and small gifts which, at the time they are offered,
do not seem related to work.
2. Avoid excessive and frequent entertainment:
Although entertainment is an acceptable
form of business practice and not considered an advantage under the PBO,
it can easily lead to a situation where you feel obliged to return a favour,
or compromise your role and responsibilities which you are required to
perform officially. You may find it difficult later to refuse a request
for a favour related to your work. Avoid putting yourself in this position,
you should turn down invitations to meals or entertainment that are too
frequent, excessive or lavish in nature. It is also important for engineers
to realise that under the HKIE's Rules of Conduct, they should avoid accepting
any gift and entertainment from those having a business relationship with
his employer or clients. Apart from this, care should be taken to avoid
frequent and excessive gambling of any kind with your clients. If you
have any doubts, you should always consult your company's management before
accepting such offers.
3. Assess the nature of the benefit/favour offered:
Before accepting any benefit or favour that are offered to you, you should
always carefully assess the motive behind it. You may check the provisions
of the Anti-Corruption Legislation as well as your company's policy on
accepting advantages or seek the advice of your management.
4. Lax site supervision puts public safety at risk:
The project engineer fails to perform the necessary site supervision with
due diligence and care, and turns a blind eye to the substandard bored
piling works. This kind of irresponsible act puts the safety and lives
of the public at risk and may cause innocent people to suffer. According
to the HKIE's Rules of Conduct, an engineer in discharging his responsibilities
to his employer and the profession shall be governed by the overriding
interest of the general public, in particular those related to the environment,
welfare, health and safety of the public.
Advice on preventive actions
1. Know your company guidelines: You always
need to understand thoroughly your company's guidelines on receiving entertainment
and gifts. When you are tempted to accept a benefit or favour outside
of the circumstances prescribed, you should report the situation to the
company's management and seek approval as appropriate. "Tips
on handling the offering and acceptance of advantages" provides
practical tips on dealing with these issues.
2. Assess corruption risks in project management: To help plug corruption loopholes and detect early signs of irregularities, engineers can conduct a corruption risk analysis of different areas of a project and implement proper controls on related procedures.
3. Tighten up site supervision measures: It is sometimes difficult to carry out adequate site supervision. Your hands may be tied by limited manpower, a tight budget or a rushed project schedule. But to comply with the standards, an engineer should always keep a tight rein on supervisory controls. If necessary, you should delegate the supervisory duties to a person with sufficient competence.
Section 9 of the PBO
It is an offence for an agent (normally an employee)
to solicit or accept an advantage without the permission of his principal
(normally the employer) when conducting his principal's affairs or business.
The person who offers the advantage is also guilty of an offence.
It is an offence for an employee to use any false document, receipt or
account to deceive his employer.
Advantages
Anything of value: money, a gift, employment, service,
a payment, a loan of money, discharge of liability, or a gift of money
such as "lai see" etc., but not including entertainment, which
means food or drinks provided for immediate consumption on the occasion.
Although "lai see" is normally given during the Chinese New
Year, it is not an excuse to say that it is customary to accept it during
festive seasons. According to Section 19 of
the PBO, it shall not be a defence that any such advantage is customary in any profession, trade, vocation or calling, and the court will reach its verdict based on whether permission
to receive it has been given by the principal.
Entertainment
means the provision of food or drink for consumption on the occasion when
it is provided, and of any other entertainment connected with, or provided
at the same time as, such provisions.
Tips on handling the offering and acceptance of advantages
(a) Seek guidance from your employer: clarify
with your employer if there is any written policy on whether employees
can accept advantages from clients or business associates in the course
of business.
(b) Avoid being "sweetened": avoid accepting benefits
or favours from anyone with whom you have official dealings if these favours
are:
- unreasonably generous, excessive or frequent;
- likely to cause you embarrassment in the
discharge of your duties;
- likely to make you feel obliged to the party offering them; and/or
- likely to bring either you or your company into disrepute.
(c) Before offering an advantage, ensure the recipient has his principal’s
permission to accept it: obtain confirmation from the recipient's
principal that he is allowed to accept advantages from clients or business
associates.
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