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.

Case Analysis

The foreman offered an advantage (i.e. the gift cheque) to the works supervisor as a reward for the latter’s doing/forbearing to do any act in relation to his principal’s business (i.e. conniving at fabricated test samples).  As the works supervisor, being an agent, did not have the permission of his principal (i.e. the consultant) to accept the advantage, he contravened Section 9(1) of the Prevention of Bribery Ordinance (Cap.201) (POBO); while the foreman contravened Section 9(2) of POBO for offering the advantage under such circumstance.  Both the foreman and works supervisor were sentenced to imprisonment.   

Case in Perspective

Construction materials testing process is vulnerable to corruption and malpractices, in particular when there is a lack of proper and effective supervision in the selection, safekeeping and transportation of test samples.  However, in order to avoid contractual liabilities due to failure of compliance tests (e.g. deduction of contract payments), unscrupulous contractors and/or sub-contractors may manipulate the process to ensure that only compliant samples are selected for testing.  They may also cover up substandard materials or works through substitution of test samples or falsification of test reports, with the corrupt connivance of site supervisory staff and/or laboratory technicians.  The above malpractices not only render the parties concerned liable to prosecution, but also undermine the works quality and put the public safety at stake.

Therefore, project owners/clients should put in place adequate and effective safeguards to prevent corruption and malpractices in the material testing process in their construction projects, including, but not limited to, the following –

(a) Lay down clear procedures for the selection, safekeeping and transportation of test samples;

(b) Keep all selected samples in safe custody throughout the process until handing over to testing laboratories;

(c) Request laboratories to submit test reports and certificates directly to the project owners/clients or their consultants; and

(d) Where necessary, appoint independent laboratories to conduct parallel tests on materials.

Under Section 9(1) of the Prevention of Bribery Ordinance (POBO), it would be an offence for Alex (an employee), without the approval of his employer (the consultancy firm), to accept the advantages for exercising work discretion to approve additional claims for Bernard the subcontractor in a private housing estate project.  

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, shares of Bernard’s company offered by Bernard can be regarded as advantage.  

Bernard might also violate Section 9(2) the POBO for offering bribes to Alex.

Moreover, according to the Rules of Conduct of Hong Kong Institute of Engineers, members are required to discharge his professional responsibilities with integrity, dignity, fairness and courtesy.  By agreeing with Bernard’s suggestion, Alex might also violate his professional code of conduct which might lead to disciplinary sanction, e.g. suspension of professional qualification.

Under Section 9(1) of the Prevention of Bribery Ordinance (POBO), it would be an offence if Brian (an employee), without the approval of his employer (the property management firm), accepted an advantage for turning a blind eye on the defects caused by the contractor’s substandard work.  

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, a post of property manager offered by the representative of the property developer can be regarded as an advantage.  

The representative of the property developer might also violate Section 9(2) POBO for offering bribes for the same purpose.

The senior engineer might violate the Rules of Conduct of the Hong Kong Institution of Engineers if he abused his official authority to manipulate tender requirements in exchange for an advantage in the form of a golf club membership. He failed to fulfil his obligation to protect the interests of his employer and clients as the contractor might not provide the best service to his organisation, not to mention the excessive construction fee charged.

If the senior engineer had not obtained prior permission from his employer to accept the advantage, he might contravene Section 5 of the Prevention of Bribery Ordinance (POBO), which prohibits a public servant from accepting illegal advantages for giving assistance in securing contracts from the public body. And the contractor, the offeror of advantages for the same purpose, could also be liable to prosecution under Section 5 of POBO.

The exercise of discretion in approving claims should be based on an objective assessment of the project's financial requirements.  To comply with the Rules of Conduct of the Hong Kong Institution of Engineers, the senior engineer should avoid his professional judgement being clouded by the offer of advantages.

The senior engineer was the agent of the consultant firm (the principal) as he oversaw the housing project.  Without the principal's consent, he should not receive an advantage - free golf trip – when dealing with the principal's affairs.  The offering of the free golf trip by the contractor as an inducement for senior engineer to misuse his authority in approving extra funds for to the project would contravene Section 9 the Prevention of Bribery Ordinance (POBO). The senior engineer who accepted the offer would also contravene the law.

Both Jonathan and Jackson were facing an ethical dilemma that might put their personal values such as respect, responsibility and honesty to challenge. In handling the situation, they should identify the relevant facts and take stock of all stakeholders concerned. The following factors should be taken into consideration when identifying viable alternatives and choosing the best course of action:

1. Any violations to her professional, industry specific, or company code of conduct.
2. Is it against the Law?
3. Does it correspond with their self-values such as honesty?
4. Can they disclose the decision to others openly and honestly without misgivings?

The ETHICS PLUS ethical decision making model might be helpful for them in solving the dilemma.

As far as compliance is concerned, Jackson might violate Section 4(1) of the Prevention of Bribery Ordinance (POBO) if he, without lawful authority or reasonable excuse, offered advantages (e.g. money) to a public servant (i.e. a staff member of the Lands Office) for the public servant’s assistance in leaking the restricted information (i.e. an act in relation to the public servant’s capacity).  The staff member of the Lands Office as a public servant, who solicited or accepted the advantage for releasing the restricted information, might also violate Section 4(2) of the POBO.

On the other hand, the Code of Professional Conduct issued by the Hong Kong Institute of Architects requires members to maintain high integrity standard and refrain from dishonourable conduct and practices in the architectural profession.  Any member whose conduct is found to be in contravention of the Code or dishonouring the principle of the Code is liable to reprimand, suspension or expulsion.

Corruption will inflate project costs and impair fair competition.  The quality of work would also be in question if the sub-contractor was not chosen by an objective assessment of its competence and capability.

If the assistant engineer leaked the tender information to the sub-contractor, he would breach the Rules of Conduct of the Hong Kong Institution of Engineers, which prohibited engineers from disclosing confidential information and require them to act in the best interest of the employers.

He might also commit a corruption offence under Section 9 of the Prevention of Bribery Ordinance (POBO) if he accepted an advantage as a reward for leaking the confidential tender information to the sub-contractor.

Although the “laisee” might be given in the Lunar New Year, the assistant engineer could not excuse himself by saying that the acceptance was a customary practice during festive seasons as that would not be accepted as a defence under the POBO.

The senior engineer might breach the Rules of Conduct of the Hong Kong Institution of Engineers, which require an engineer to safeguard confidential information in relation to his employer and to refrain from receiving any advantage for disclosing such information or making use of it for personal gain.

Being an employee of his company, the senior engineer might also breach Section 9 of the Prevention of Bribery Ordinance if he received an advantage to leak confidential information.  The offeror of such advantage would also breach the same law.

Although the advantage was solicited by the senior engineer's brother, the senior engineer himself could still be liable to the charge of a corruption offence as the advantage was to be received on his behalf.

Other than committing a deception offence, the maintenance engineer breaches the Rules of Conduct of the Hong Kong Institution of Engineers, which require an engineer to treat his colleagues and co-workers fairly and to avoid abusing his authority.  Misusing his supervisory position for private gain, the maintenance engineer breaches the law and undermines the financial interest of his company.

Implementing proper controls on contracting procedures, carrying out frequent random supervisory checks and conducting regular communication with contractors and staff can help detect early symptoms of irregularities and prevent such malpractices from happening.  Encouraging staff to report malpractices to senior management or the compliance officer through proper channels of complaints will also be effective in stopping unscrupulous staff from committing a crime or malpractice.