For a Few Dollars More – Corruption in Singapore




© Springer International Publishing Switzerland 2015
Michael Joachim Bonell and Olaf Meyer (eds.)The Impact of Corruption on International Commercial ContractsIus Comparatum – Global Studies in Comparative Law1110.1007/978-3-319-19054-9_14


14. For a Few Dollars More – Corruption in Singapore



Michael Furmston 


(1)
School of Law, Singapore Management University, 60 Stamford Road, Singapore, 178900, Singapore

 



 

Michael Furmston



Abstract

Singapore criminal law, which is vigorously enforced, takes a wide view of corruption. Bargains procured by corruption are also invalid and in general not enforceable by either by the bribe giver or the bribe receiver. In many cases agents will be involved. Here key concepts are the ostensible authority of the agent and the fiduciary nature of the agent’s relationship. In the case of cross border transactions there is a Conflicts problem as to which law governs. Where Singapore law is the proper law agreements for corruption overseas are clearly void.


With apologies to Clint Eastwood and Sergio Leone.



14.1 The Nature of Corruption1


Most countries, even those where in reality it is extensively practiced, have legislation forbidding corruption but what is thought of as corruption may vary widely. This is partly a question of culture and partly a question of construction. This is illustrated by two stories which recently appeared in the same day in the International New York Times.2 A Japanese minister resigned because she had handed out free hand-held fans to supporters.3 On the same day a senior executive of Petronas, the government owned Brazilian oil company, accepted a plea deal with prosecutors that he had turned the refining division of Petronas into a slush fund for a political party.

In Singapore the leading act is the Prevention of Corruption Act s64 of which provides:



  • If

    (a)

    any agent corruptly accepts or obtains, or agrees to accept or attempts to obtain, from any person, for himself or for any other person, any gratification as an inducement or reward for doing or forbearing to do, or for having done or forborne to do, any act in relation to his principal’s affairs or business, or for showing or forbearing to show favour or disfavour to any person in relation to his principal’s affairs or business;

     

    (b)

    any person corruptly gives or agrees to give or offers any gratification to any agent as an inducement or reward for doing or forbearing to do, or for having done or forborne to do any act in relation to his principal’s affairs or business, or for showing or forbearing to show favour or disfavour to any person in relation to his principal’s affairs or business; or

     

    (c)

    any person knowingly gives to an agent, or if an agent knowingly uses with intent to deceive his principal, any receipt, account or other document in respect of which the principal is interested, and which contains any statement which is false or erroneous or defective in any material particular, and which to his knowledge is intended to mislead the principal,

     

he shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 5 years or to both.

There is another offence of corruption in s5 of the PCA which provides:

Punishment for corruption

5.

Any person who shall by himself or by or in conjunction with any other person-

(a)

corruptly solicit or receive, or agree to receive for himself, or for any other person; or

 

(b)

corruptly give, promise or offer to any person whether for the benefit of that person or of another person, any gratification as an inducement to or reward for, or otherwise on account of-

(i)

any person doing or forbearing to do anything in respect of any matter or transaction whatsoever, actual or proposed; or

 

(ii)

any member, officer or servant of a public body doing or forbearing to do anything in respect of any matter or transaction whatsoever, actual or proposed, in which such public body is concerned,

 

 

 

shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $100,000 or to imprisonment for a term not exceeding 5 years or to both.

The key concepts of “Principal”, “Agent” and gratification are defined in s2 which provides:



  • “Gratification” as including:


(a)

money or any gift, loan, fee, reward, commission, valuable security or other property or interest in property of any description, whether movable or immovable;

 

(b)

any office, employment or contract;

 

(c)

any payment, release, discharge or liquidation of any loan, obligation or other liability whatsoever, whether in whole or in part;

 

(d)

any other service, favour or advantage of any description whatsoever, including protection from any penalty or disability incurred or apprehended or from any action or proceedings of a disciplinary or penal nature, whether or not already instituted, and including the exercise or the forbearance from the exercise of any right or any official power or duty; and

 

(e)

any offer, undertaking or promise of any gratification within the meaning of paragraphs (a), (b), (c) and (d);

 




  • “Agent” as:


  • Any person employed by or acting for another, and includes a trustee, administrator and executor, and a person serving the Government or under any corporation or public body, and for the purposes of section 8 includes a subcontractor and any person employed by or acting for such subcontractor;




  • “Principal” as including:


  • An employer, a beneficiary under a trust, and a trust estate as though it were a person and any person beneficially interested in the estate of a deceased person and the estate of a deceased person as though the estate were a person, and in the case of a person serving the Government or a public body includes the Government or the public body, as the case may be;




  • and “Public body” as:


  • Any corporation, board, council, commissioners or other body which has power to act under and for the purposes of any written law relating to public health or to undertakings or public utility or otherwise to administer money levied or raised by rates or charges in pursuance of any written law …
It is clear that these rules apply in both the public and private sector. The major difference is that in the public sector there is a presumption of corruption where gratification is given to or received by an employee of the government or of a public body.5 The scope of public bodies in Singapore law is quite wide. So in Tey Tsun Hang v Public Prosecutor.6 The accused was an Associate Professor of Law in the Law School of the National University of Singapore (NUS). He was charged with corruption. It was established that he had gifts from a female student of a Mont Blanc pen; two tailor-made shirts; an i-pod touch; a restaurant bill and that they had had sex on two occasions. It was decided that NUS was a public body and that therefore the burden of proving the absence of corruption was on him. The fact that NUS had a substantial degree of autonomy did not take it out of the class of public bodies. He was convicted but on appeal the judge held7:

It seems to me that the TJ8 concluded that the second and third elements of the offence had been made out because the appellant had breached NUS policies and because he had abused his position as a lecturer when he had exploited Ms Ko. While the TJ accepted that the breach itself did not necessarily amount to a corrupt intention, he was of the view that the breach and the exploitation did. Hence the TJ’s conclusion that the appellant’s conduct was depraved, corrupt and dishonest. I am of the view that the TJ had wrongly equated conduct which is morally reprehensible with conduct which is legally wrong. I agree that the appellant had exploited Ms Ko. His conduct was morally wrong but that is not corruption for the purposes of the Act. Exploitation does not necessarily amount to corruption under the Act. The gap is not filled in by the appellant’s breach of NUS policies. True, the failure to disclose the relationship and the gifts demonstrated that he did not want others to know about them but, in the circumstances, the failure is not clear evidence of a corrupt intent. As he was exploiting her, it is no surprise that he did not want to disclose his relationship with her.
A very recent decision of the Singapore Court of Appeal9 is instructive. In Public Prosecutor v Teo Chu Ha 10 the accused was a senior director of logistics in company A. She was accused of corruptly assisting company B successfully to tender for contracts with company A. The alleged gratification was that she had been allowed to buy shares in company B. Her counsel persuaded the trial judge that this would only be an improper gratification if it were proved that she had bought the shares at an undervalue. The Court of Appeal held that this was clearly wrong. The opportunity to buy the shares in company B was itself a form of gratification since the company was a private company whose shares could not be bought on the market. Further the shares unlocked the door to further gratification as the defendant was paid substantial sums by way of dividends on the shares and company B’s profits flowed significantly from business with company A.

It will be seen that normally both the giver of the gratification and the receiver are guilty of an offence. In a sentencing appeal in Public Prospector v Marzuki Bin Ahmad 11 Sundaresh Menon CJ said that in sentencing the starting point would usually be that the giver and receiver were equally at fault. He observed12:

In my judgment, the effect of these remarks, taken together, is that the principle of parity of sentencing as between the giver and the recipient of gratification cannot be viewed or applied as an inflexible and rigid rule. Although the general principle is that the giver and the recipient of gratification are equally culpable, many other factors must also be considered when deciding on the sentence to be imposed on the particular accused person who is before the court. These factors may relate to the degree of culpability of each individual offender in committing the corrupt acts, as well as circumstances unique to each offender (bearing in mind too the general approach to sentencing for s 6(a) offences set out earlier at [28] above). Leaving that aside, in the case of a party to a corrupt transaction who is sentenced after his counterparty in the same transaction has been separately sentenced, it could also be that the sentence imposed on the counterparty in the earlier decision might have been too high or too low by reference to the applicable sentencing precedents. The court must always have the flexibility, when sentencing a party to a corrupt transaction, to depart from the earlier sentence imposed on his counterparty in the same transaction where that is the appropriate course of action to take.
The enforcement of the criminal law on corruption is principally in the hands of the Corrupt Practices Investigation Bureau (CPIB), which takes an active role. The Singapore Government attaches great importance to this area. In the Corruption Perception Index produced by Transparency International, Singapore was ranked fifth in both 2011 and 2012.13


14.2 The Position of Agents


Corruption is not only a crime but its presence will have effects in the civil law. So the bribe receiver cannot sue the bribe giver if he does not pay up and the bribe giver cannot get his money back if the bribe receiver does not deliver. Further transactions procured by bribes may not be binding even though some of the parties do not know of the bribes. Here the position of agents is of critical importance.

In the simplest cases the bribe giver and bribe receiver will be the only parties but this will often not be the case. One or other or both will be acting on behalf of a public body or a company, which can only act through human beings. This will make some rules of agency law highly relevant.

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