Soliciting bribes in granting project approval

A government chief engineer solicited $400,000 from a project manager of a land development company for approving a company's car park development project.
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A government chief engineer took advantage of his office to solicit $400,000 from a project manager of a land development company as a reward for assisting the latter to obtain green light for the company's carpark development project.

Subsequent to the first application of the project being turned down by the relevant government department, the chief engineer asked for the advantage from the company. Frustrated at being asked to pay bribes to secure the project, the project manager reported the case to the ICAC.

Case Analysis

As a government employee, the chief engineer was not permitted to accept advantage in connection with his work. In soliciting illegal advantage from the land development company, he had violated Section 4 of the Prevention of Bribery Ordinance (POBO).

The chief engineer's plot failed before he could do anything to secure the project, but he could not escape from legal sanctions. Under Section 11 of the POBO, if it could be proved that an advantage was given to the acceptor as a reward for favours done to the offeror, the following should not be considered a defence: (a) “he did not actually have the power so to do”, (b) “he accepted the advantage without intending so to do” or (c) “he did not in fact so do.”

Business operators or employees who come into frequent contact with government employees have to be particularly careful when managing their relationship with them as they are governed by stringent laws and regulations, restricting their acceptance of advantages in their public and private capacities. The offering of advantages to government officers may also constitute a violation of the POBO.

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Connivance with substandard works

A proprietor of an engineering company bribed supervisory officer to secure the certification of substandard works. 

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An engineering company was awarded a contract to carry out waterproofing works to all bathroom floors of a newly constructed building, which was supervised by a clerk of works employed by an architectural firm.  In a water ponding test, the clerk of works discovered signs of water seepage at the ceiling of the lower floor, reflecting substandard waterproofing works.  To get substandard works accepted and certified, the proprietor of the engineering company paid a sum of money to and settled the entertainment expenses incurred by the clerk of works.

Case Analysis

Case Analysis

The clerk of work is an agent of the architectural firm.  He accepted advantages (i.e. money and payment of expenses) from the proprietor of the engineering company for conniving at the latter’s substandard works, which was related to the affairs of the architectural firm (i.e. his principal).  Without the permission of the architectural firm to accept such advantages, he had contravened Section 9(1) of the Prevention of Bribery Ordinance (Cap.201) (POBO).  The proprietor of the engineering company had also violated Section 9(2) of the POBO by offering the advantages under such circumstances.  Both the clerk of works and the proprietor of the engineering company were sentenced to imprisonment.   

 

Case in Perspective

Site supervisory staff carry a pivotal role in ensuring the quality and safety of all construction works.  They should diligently inspect and check the works against the required standard, and require contractors to rectify any irregularities and defects identified.  In this case, however, the clerk of works breached the trust placed in him by his employer (i.e. the architectural firm) and abused his authority for personal gain.  Apart from prejudicing the interest of his employer, his act might also put public safety at stake. 

A company or an organisation implementing construction projects should put in place adequate safeguards to ensure proper works supervision by site supervisory staff.  For example,

(a) Draw up a comprehensive supervision plan to set out the critical works items requiring inspection, the frequency and the rank of staff responsible for such inspection;

(b) Require inspection staff to record the inspection details, including time, location and description of works inspected and inspection results; and, as far as practicable, make use of technologies such as mobile applications that enable on-the-spot logging;

(c) Arrange independent technical audits on inspection work; and

(d) Issue guidelines on acceptance of advantages and entertainment, handling conflict of interest, etc.

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Offering bribes for contract constitutes an offence

An air-conditioning equipment supplier attempted to induce an engineer to award a contract to a designated sub-contractor and promised to reward the engineer with cash.
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An air-conditioning equipment supplier provided spare parts to an engineering company for an air-conditioning project of a large exhibition centre. As some of the parts supplied broke down due to manufacturing fault, the supplier engaged a sub-contractor to carry out repairing work at its own expenses. The work, however, was done unsatisfactorily. The engineering company subsequently reallocated the work to its own contractor and assigned an engineer to supervise the work. The supplier thus approached the engineer in a bid to get the job back to his sub-contractor and promised to reward the engineer by a sum of cash.

The engineer refused the offer and reported the matter to the ICAC.

Case Analysis

Case Analysis

The supplier offered an advantage (i.e. cash) to the engineer, who was an employee (i.e. agent) of the engineering company (i.e. principal), as an inducement or reward for showing favour in relation to his principal’s business by awarding the contract back to the supplier’s sub-contractor.  The supplier contravened Section 9(2) of the Prevention of Bribery Ordinance (Cap.201) (POBO).  Had the engineer accepted the bribe without the permission of his principal, he would have contravened Section 9(1) of the POBO. 

 

Case in Perspective

The use of bribery to obtain contracts will inflate the operation costs of the bidder and cause unfairness to other bidders who observe the principle of fair play.  The services procured may also fall short of standard and affect the overall quality of the job because no supplier can go on absorbing corrupt payments and still give the quality you want.  It is crucial for management to provide integrity training so that staff at all levels understand the anti-corruption laws and stay vigilant to the risks of corruption when performing their duties. 

The positive action of the engineer is a good illustration of the proper action to take when one is being offered a bribe or has discovered malpractices.  Staff members should refuse any bribes and promptly report any suspected malpractices or illegal activities to law enforcement agencies including the ICAC and/or the management.  Companies should establish a clear and confidential whistle-blowing mechanism.

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Offering bribes outside Hong Kong may also be prosecuted

Fred was an engineer responsible for approving equipment for construction projects. His cousin David, who worked in a Mainland production factory, persuaded Fred to use his factory’s products by offering Fred an illegal commission.
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Fred was an engineer of a construction company and was responsible for approving the electrical equipment and materials required for construction projects. He was going to get married, but due to financial problems, he could only afford a simple wedding. His fiancée was very upset.

Fred's cousin David, an employee of a Hong Kong enterprise engaged in home automation system business, was recently posted to a production factory in Shenzhen to handle the development of new products. He had to travel frequently between Hong Kong and the Mainland. David, in the hope of gaining recognition from his company and getting more funds for his R&D work, recommended a home automation system to Fred when they met in Hong Kong. David persuaded Fred to use the system in a local private residential project undertaken by Fred's company and suggested that an illegal commission of HK$200,000 could be paid to Fred by instalments.  Without hesitation, Fred accepted the offer. David then appropriated HK$30,000 from the company's entertainment account for partial payment of the commission to Fred, calling it a wedding gift.

Fred thought that he could use the money to subsidise his wedding, but unfortunately the system he had purchased were found defective. The incident aroused the suspicion of the construction company's senior management, which then referred the matter to the ICAC for investigation. With substantial evidence, Fred was arrested just days before his wedding.

Case Analysis

It is against the law to offer any advantage, whether directly or indirectly, to any  person  or  to  a  third  party having  connections  with  that  person,  if  the advantage is proven to have been offered in relation to his duties. Although David offered an advantage to Fred under the pretext of giving him a wedding gift, both of them were still guilty of a bribery offence.

The illegal commission was offered to an employee of a Hong Kong company by a company based outside Hong Kong. However, if any part of the act of bribery (including offering, soliciting or accepting a bribe) takes place in Hong Kong, the case may still be pursued by the ICAC under the Prevention of Bribery Ordinance (POBO).

Likewise, if non-local residents request their Hong Kong counterparts to deposit bribes into a Hong Kong bank account, both parties will be in breach of the POBO as part of the bribery transaction takes place in the territory.

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Make profit in bidding

Barry, a senior project manager of a subcontractor, faced a dilemma when bidding a project. The manager of the main contractor promised Barry with the contract, but Barry had to inflate the bidding price…
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Barry was a Senior Project Manager of a construction company in Hong Kong. Recently, his company was going to put in a bid to be the principal subcontractor of a project in the Mainland. The bid was RMB500 million. Barry then negotiated with Echo Ltd, the state-owned main contractor of the project that was asking for the bid. The Echo manager told Barry that his company would get the contract if he could inflate the bidding price from RMB500 million to RMB550 million. The manager further explained that the additional RMB50 million would be shared equally among the Managing Director of Echo Ltd, the manager himself and Barry as a hook to ensure Barry’s silence. Barry was disturbed because he had heard of stories like this which the bidder got physical harms as a return for refusal to cooperate.

Would Barry violate any bribery offence if he acceded to the Echo manager’s request? What should Barry do?

Case Analysis

When conducting business overseas, it is important to watch out for increased bribery risks that may come with business operations under different systems and cultures.  Companies should pay special attention to the local laws and regulations in different jurisdictions as well as foreign bribery laws with extra-territorial effect.

In the case study, if Barry agreed with the Echo manger to inflate the bidding price in order to win the contract, Barry, the Echo Managing Director and the Echo manager might violate the anti-bribery provisions in the PRC Criminal Law.

In case any part of the bribery offence took place in Hong Kong, Barry might also breach Section 9 of the Prevention of Bribery Ordinance if he, without lawful authority or reasonable excuse, offered bribes to the Echo manager as an inducement or reward for securing the contract.

To avoid breaching the law and protect himself from any physical harm, Barry was suggested to report the matter to his company and seek help from local authorities.

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Substandard work - piling

A works supervisor discovered that the length of the constructed piles did not match with the concrete delivery records for the piles. He suspected that some of the piles might have been shortened…
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In January 2001, Lee & Wong Holdings Ltd (LW) awarded a $1,000 million contract to a main contractor for constructing four 40-storey residential blocks, a commercial complex and a car park.   The main contractor then sub-contracted  the  piling  work  to  another  company.    The  latter  in  turn awarded the work to Saar Piling Company Ltd (Saar) by simply deducting 15% of his original successful bid.  LW also appointed a consultant firm Joe & Partners (JP) to oversee the construction work.   The project was scheduled to be completed in twenty months and five months were allowed for the piling works.

JP deployed an engineer as the Project Manager (PM) to oversee the project but he was not required to be resident on site.   Occasionally, he would go to the site for meetings but did not carry out site inspections himself. Routine site inspection was left to an Assistant Inspector of Works (AIoW) and a Works Supervisor (WS) who were resident site staff appointed by JP. However, the AIoW had very limited experience in piling work.

As there were only two supervisory staff on site responsible for overseeing the whole piling works, the AIoW and the WS found it difficult to check every detail during the work process.  They could only rely on the records of Saar and sign the completion forms taking the face value without checking.

Due to unexpected difficulty encountered during the placing of reinforcement casings, LAM, Director of Saar, found that the piling work was behind schedule and a one-month delay was anticipated.   Saar, being a small sub-contracting company, found it difficult to bear possible substantial liquidated damage (LD) of $800,000 per day as stipulated under the main contract.

LAM then discussed the making of shortened piles with the foreman and site agent of the main contractor, who were always away from work and thus failed to monitor the work progress.  They thought that the specifications stipulated in the contract were conservative and shortened piles should cause no severe harm to the completed buildings resting on top of the piles.   They believed that the buildings would not be structurally affected.

LAM instructed his workers not to excavate the pile bores as deep as the proposed founding levels.   Instead, after the length of the reinforcement casings had been checked by the supervisory staff of JP, LAM asked his workers to cut the casings during night time when the consultant site supervisory staff were off duty.   LAM then manipulated a measuring tape by removing parts of its central portion so that it gave a reading longer than the actual measurement.   When the supervisory staff of JP measured the pile bore depth using the manipulated measuring tape provided and re-examined the reinforcement casing, they were not able to detect that the piles had been shortened.

One day, the WS of JP discovered that the length of the constructed piles did not match with the concrete delivery records for the piles.   He suspected that some of the piles might have been shortened.   He immediately approached LAM for an explanation for the irregularities discovered and the proposals for remedial actions.

LAM, after discussion with the foreman and site agent, went to the WS’s office to hand him an envelope containing $300,000 and plead him to turn a blind eye to the substandard piling works.   The WS immediately refused LAM’s request.

The WS immediately  reported LAM’s  offering of bribes to the ICAC. LAM, the site foreman and site agent of the main contractor were arrested and convicted of conspiracy to offer an advantage to the WS as a reward for turning a blind eye on substandard piling work.

Questions

  1. Why were LAM, the foreman and site agent convicted of corruption offences? What actions should you take when being offered bribes?
  2. How devastating would the damages be if a construction professional accepts advantages for turning a blind eye to substandard works? What are the consequences of such behaviour?
  3. What is the importance of site supervision at a construction site?
Case Analysis

Section 9 of the Prevention of Bribery  Ordinance (POBO)

LAM conspired with the foreman and site agent to offer the Works Supervisor $300,000 for his turning a blind eye to the substandard piling work was an offence under Section 9 of the POBO.   This section states that:

  • 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; and
  • The person who offers the advantage also commits an offence.

Report Corruption

The positive action of the Work Supervisor was a good illustration of the proper action to take when one was being offered a bribe: refuse the bribe immediately and report the matter to the ICAC.

Consequences of Corruption

Turning a blind eye to substandard works would result in building defects, causing the company extra costs to rectify the problem.  Worse still, such hidden faults in construction works would be hazardous to public safety.

Construction professionals should bear in mind the implications of substandard works to public safety, as their responsibilities to his employer and the profession should at all times be governed by the overriding interest of the general public.

In similar court cases previously, the judge commented that the defendants “place in jeopardy not only the structure and those using it but also the reputation of Hong Kong.   The potential consequences of their actions may quite fairly be described as disastrous.   The conduct of these Accused casts a shadow over the entire construction industry…”

Corruption could also bring devastating damage to one’s career and reputation. Construction professionals need to live by a high standard of integrity so as to resist the corruption temptations facing them in the workplace.

Site Supervision

The allocation of adequate resources to site supervision is crucial to ensuring the quality of works.   Site supervisory staff are sometimes inadequate, both in number and experience, and may therefore not be able to monitor the work of the contractor effectively nor promptly detect any fraudulent acts. Employers/consultants should deploy sufficient on site supervisory staff with appropriate training and experience.

The deployment of only technical staff on site is inadequate and professional input is important especially at critical construction stages.

Infrequent site visits by professional staff is not uncommon in the construction industry.   In fact, regular supervisory check is crucial in ensuring that the work complied with the required standard.   Supervisory staff should use their own measuring tapes in checking the pile depth.   In addition, the role of independent internal technical audit should also be strengthened so as to guard against any possible malpractice.

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Falsifying attendance records

In order to facilitate the engineer’s monitoring of workers’ attendance and recording of their working hours, workers were required to punch an attendance card when reporting on and off duty every day in the Engineer’s office.

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In a construction project of a commercial complex valued over $500 million, the main contractor employed ten foremen to monitor the work of sub-contractors.  A site engineer of the company, who took charge of the foremen, was responsible for the overall supervision of the project.

The salaries of the foremen and other workers were calculated on a daily basis.  Each  of  them  was  required  to  punch  an  attendance  card  when reporting on and off duty every day.  The attendance cards and the punching machine were placed in the engineer’s office so that when the foremen and other staff  reported  on  or  off  duty, they  had  to  punch  the  cards  in  the engineer’s office.  The engineer was responsible for ascertaining that his subordinates personally punched the cards.  At the beginning of each month, the engineer was responsible for calculating the salaries of his subordinates based on their individual attendance records for the previous month.  His calculations and the punched cards were then sent to the Accounts Department of the company for processing salary payment.

As the family of one of the foremen, CHAN, was in the Chinese Mainland, CHAN would seek every opportunity to travel there to visit his family.  One day, CHAN went to see the engineer and requested for three days’ off.  CHAN, however, requested the engineer not to record his leave but instead punched the attendance card for him so as to show that he was working on the three days.  In return, CHAN offered the engineer $500 for assisting him in punching the attendance card and turning a blind eye to his absence.

The engineer turned down the offer and reported the matter to the ICAC.  Eventually, CHAN was convicted for offering a bribe to the engineer, contrary to Section 9 of the Prevention of Bribery Ordinance (POBO) and was sentenced to imprisonment.

Case Analysis

Case Analysis

The foreman, CHAN, offered an advantage to the engineer (i.e. an employee and hence agent of the construction company) as a reward for assisting him to falsify attendance records, contrary to Section 9(2) of the Prevention of Bribery Ordinance (Cap.201) (POBO). Irrespective of whether the engineer accepts or rejects the bribe, the act of offering (by CHAN) already constitutes a criminal offence.  Should the engineer have accepted the bribe, the engineer would have committed a corruption offence and be charged under Section 9(1) of the POBO.    In addition, regardless of whether the engineer accepted the bribe, if he assists CHAN in falsifying the attendance record, this would amount to an offence under Section 9(3) of the POBO.  This provision stipulates that it is an offence for an employee to use any false document, receipt or account to deceive his employer.  Improper ethical behaviour may also lead to the revocation or suspension of a professional registration with a professional body and as a result the engineer would be restricted/prohibited from practice.

 

Case in Perspective

The lack of supervisory control and reliance on a manual tracking system over localised staff attendance create opportunities for personnel to abuse delegated authority, engage in unauthorised absences, commit payroll fraud, or offer bribes to secure the collusion of checking officers.  To address this problem, the main contractor should establish a system to strengthen attendance tracking and staff administration by implementing the following control measures –

(a) Eliminate susceptible manual systems and implement a digital attendance management system (e.g. fingerprint or facial recognition);

(b) In the interim, supplement manual systems with CCTV to authenticate staff presence, deter impersonation and provide verifiable records of attendance; and

(c) Conduct surprise on-site spot checks and physical headcounts to verify real-time worker presence by supervisors and/or independent units. 

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Insider information in tendering

A young engineer was tempted by a sub-contractor during a tendering exercise. The sub-contractor offered him a handsome financial assistance for his new flat in exchange for leaking insider information.

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David worked in a construction company as a junior engineer after graduation. Through work, he became close with a subcontractor Mr. CHAN who often treated David lavish dinners and free trips to Macao. The two got along famously.

Recently, David’s company was conducting an open tendering exercise for a multi-billion project in Lantau, which Mr. CHAN was very keen. David was responsible for collecting the price quotation documents for the project. One day, Mr. CHAN invited David to a lavish dinner over which he made a proposal to David. He asked David to go through the quotations secretly and leaked him the price of the lowest bid. Then he would submit an even lower price just before the closing time to ensure the winning of the tender.

Knowing that David needed help for the down payment of his new flat, Mr. CHAN promised David a handsome contribution to the down payment if David helped him out. He also persuaded David that he was just as good as anyone else and that it would be a ‘win-win’ situation for both of them. David really needed a hand financially, and he did not want to sabotage the excellent relationship with Mr. CHAN.

Should David say yes to Mr. CHAN?  Would this be illegal?  Would it harm anybody in anyway?

Case Analysis

Case Analysis

Under Section 9(1) of the Prevention of Bribery Ordinance (Cap.201) (POBO), it would be an offence if David (i.e. agent), without the approval of his employer (i.e. principal), accepted the advantage (i.e. the financial assistance to the down payment of the new flat) as an inducement to assisting Mr. CHAN to get the tender.  Meanwhile, Mr. CHAN might also be liable for promising to offer bribes to David under Section 9(2) of the POBO.

By leaking the insider information to Mr. CHAN, David might also breach the Rules of Conduct of the Hong Kong Institution of Engineers, which prohibited engineers from disclosing confidential information and required them to act in the best interest of the employers.

Corruption would impair fair competition and put public safety at stake.  The quality of work would be in question as the sub-contractor was not chosen by an objective assessment of its competence and capability.  To uphold professional ethics and avoid breaching the law, David should say no to Mr. CHAN’s request and report the matter to his company and/or the ICAC.

 

Case in Perspective

Leakage of sensitive or confidential tender information (e.g. bid prices) by compromised personnel to favour a particular bidder will undermine fair competition and integrity of the procurement process.  To prevent such malpractice, the company should establish a robust procurement system to ensure the selection of the most suitable contractor based on merit.  For example, 

(a) Take precautionary measures to prevent leakage of tender information, such as receiving tenders through secure electronic channels with the password split and separately held by different staff members, and tasking an independent team to witness tender opening;

(b) Prohibit the opening of tenders received before the deadline, and ensure tenders remain in the custody of designated officer to minimise the risk of information leakage;

(c) Accept late tenders only with the endorsement of the management (or the tender board, if any) on justifiable grounds; 

(d) Require staff involved in procurement to declare whether they have any conflict of interest in the matter, and manage any declared conflict to mitigate integrity risks; and

(e) Maintain proper documentation of the tendering process, including but not limited to meeting minutes, tender evaluation and negotiation, correspondence, and declaration and management of conflict of interest, to facilitate independent audits and ensure accountability. 

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Expedition of payment

A proprietor of a subcontractor offered advantages to the inspector of works of the government department as a reward for expediting the checking of works orders.
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A Government Department (the Department) awarded a slope maintenance  contract  to  Chongs  Construction  Company  Ltd,  which  then sub-contracted the works to JKW Subcontracting Company (JKW), of which CHEUNG was the proprietor.

From time to time, the Department issued to the contractor works orders (WOs) describing the work required, location and estimated value of the work. Upon completion of work, an Inspector of Works (IoW) of the Department would physically inspect and verify whether the work done was in compliance with the required standard.   Based on the recommendation made by the IoW, the project engineer would approve payment to the contractor by signing on the WO concerned.   He was not required to physically inspect every piece of work completed as over a hundred WOs were issued every month.

When the engineer signed on the WO, the contractor could apply for payment by submitting the WO to the Accounting Section of the Department. A contractor could only apply for payment on completion of work as certified on the WO.

In conjunction with the payment process, the Quantity Surveying Section of the Department counter-checked the work of the contractor.   However, the Quantity Surveyors of the Section could only randomly check 10% of the WOs issued.   Both the project engineer and the quantity surveyors might therefore not be able to detect abuse in relation to the WOs.

YAU was an IoW of the Department responsible for overseeing the works carried out by JKW.   In March 2000, CHEUNG approached YAU and urged YAU to expedite the checking of WOs. Hence, CHEUNG could receive payment earlier.   In return, CHEUNG offered YAU a part-time job with $8,000 a month.

Between April 2000 and December 2001, YAU accepted a part-time job from CHEUNG as a reward for expediting the checking of WOs issued to CHEUNG.   On many occasions, YAU certified work completion on the WOs though the work concerned had not even commenced.

YAU and CHEUNG were later arrested by the ICAC and were found guilty of offences under Section 4 of the Prevention of Bribery Ordinance (POBO).   Both YAU and CHEUNG were sentenced to imprisonment.

Questions

  1. How did YAU and CHEUNG violate Section 4 of the Prevention of Bribery Ordinance?
  1. Besides the offer of a part-time job, what else can be classified as an“advantage”?
  1. What should be watched out for in site supervision to prevent malpractice?
Case Analysis

Section 4 of the Prevention of Bribery  Ordinance

YAU and CHEUNG were convicted of offering/accepting an employment as a reward for abusing YAU’s official position as a public servant, contrary to Section 4 of the POBO.   Under this section, it is an offence for:

  • a public  servant  to  solicit  or  accept  any  advantage  offered  as  an inducement to or reward for any action or inaction in connection with the performance of his official duty; and
  • any person who offers such an advantage.

Advantage

As stipulated in the POBO, an offer of employment or contract is defined as an advantage.   Attention should also be drawn to the fact that loans from contractors are also classified as advantages. Such dealings are often precursors to more serious corrupt arrangements and should be avoided.

Site Supervision

Site supervision is crucial in different stages of work.   Reliance on a single individual should be avoided.   Senior officers should conduct spot checks, closely monitor the quality and progress of work and keep thorough and accurate records.   The role of independent auditing should also be strengthened to provide a means to detect possible malpractice at an early stage.   In addition, corruption prevention awareness amongst all tiers of supervisory staff should be raised.

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Lax supervision

A proprietor of a subcontractor offered “laisee” to a site supervisor, requesting for “flexibility” in inspection and acceptance of work completed.
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A large building project developed by a public body (PB), involving five residential blocks and a commercial complex with a car park, should be completed by April 2003.   The PB awarded the project to a main contractor CK Holdings Ltd (CK) in May 2001 at $1,800 million.   Central Architects and Engineers Ltd (CAE) was appointed by the PB as the project consultant.

There were a number of sub-contractors responsible for different aspects of work for this project.   Among them, CK sub-contracted all plastering works to Diamondhead Plastering Company and CHONG was its proprietor.

Being the project consultant, CAE was responsible for monitoring and supervising the workmanship and progress of work including that for CK and its various sub-contractors.   CAE had recruited a team of five residential site supervisory staff headed by a Clerks of Works (CoW) Martin.   All of them were public servants acting as an agent for the PB in the project.

CHONG, Martin and other site supervisory staff of CAE always had dinner together and played mahjong after work.   Being a habitual gambler, Martin was in great debt and often borrowed money from his relatives and friends.

CHONG also invited Martin to Shenzhen on several occasions to have lavish meals and attend nightclubs.   CHONG paid all the bills on these occasions.   Furthermore, CHONG sometimes offered Martin loans and chips in the casinos in Macau.   Martin considered CHONG treated him well solely on friendly basis.

Shortly  after  their  visits  to  Shenzhen  and  Macau,  CHONG  went  to Martin’s site office and suggested to adopt a quicker method for laying screed. Instead of using a thorough mixture of cement, sand, aggregate and water, CHONG proposed to adopt a ‘semi-dry sand’ method in which a layer of sand was put onto a layer of cement and thereafter water was sprayed onto the layers.   Although this shortcut method of laying screed was used in some other projects, it was not allowed in this project and it was clearly stipulated in the Specifications.   Thus, Martin immediately objected to the suggestion.

On the day before Winter Solstice, CHONG approached Martin again and pleaded for relaxation on the screeding method.   He indicated that the screeding work had been behind schedule and the liquidated damage for delay was heavy.   CHONG offered a laisee packet of $50,000 to Martin claiming that it was for the forthcoming Winter Solstice and requesting for ‘flexibility’ in acceptance of work completed.  He also demanded Martin not to be too stringent when inspecting the work.   He further indicated that since he had been treating Martin well for so long it should be time for Martin to do something in return.   Finally, Martin decided to accept the bribe, accede to CHONG’s request and connive at the shortcut screeding method.

CHONG and Martin were later arrested by the ICAC and were found guilty of offences under Section 4 of the Prevention of Bribery Ordinance (POBO).

Questions

  1. How did CHONG and Martin violate the POBO?
  2. What do you think about the over-socialisation between Martin and CHONG?
  3. Is customary practice, such as giving laisees during festivals(開工利是), a defence to accept an advantage? Why?
  4. Being a habitual gambler, what is the possible risk of Martin in respect of corruption?
Case Analysis

Section 4 of the Prevention of Bribery Ordinance (POBO)

Section 4 of the POBO deals with corruption relating to public servants. Under this section, it is an offence for:

  • a public servant to solicit or accept any advantage offered as an inducement to or reward for any action or inaction in connection with the performance of his official duty; and
  • any person who offers such an advantage.

In the circumstances, CHONG offered an advantage to Martin for conniving at the shortcut screeding method. Both thus committed an offence under Section 4 of the POBO.

Over-Socialisation

The contractor and site supervisory staff work in close circles and they easily become over-socialised and develop unhealthy relationship. Gambling, lavish and frequent entertainment are conducive to corrupt activities among the parties. The acceptance of free pleasure trips is an advantage under the POBO.  Such unhealthy relationships will easily affect their ability to effectively supervise the works of the contractors. Site staff may also be “sweetened up” by the unscrupulous contractors with the lavish and excessive entertainment.

Customary Practices

Any special events or festive occasions, such as ‘Lo Pan Festival’ (魯班誕 ),  are  not  excuses  for  staff  to  accept  any  advantage  or  laisee  from contractors. As  stipulated  in  section  19  of  the  Prevention  of  Bribery Ordinance, it shall not be a defence to show that any advantage accepted is customary in any profession, trade, vocation or calling.

Gambling

Habitual gamblers and persons in debt are highly vulnerable to corruption. Loans offered by contractors to site supervisory staff are major temptations and frontline staff who are in great debt will be comparatively easier to be tempted to accept bribes.

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