Over one hundred organizations are designated by the law as public bodies in Hong Kong. These public bodies provide public services, receive substantial public funds or are being placed in a position of special trust by the Government. Considering these organizations have been increasingly entrusted to assume a boarder array of public functions over the past decades, maintaining a clean and corruption-free operating environment is crucial.
The performance of public functions mentioned above inevitably involves the procurement of goods and services, often on a substantial scale and with a considerable amount of money. The substantial financial implications associated with procurement activities and the inherent public interest at stake, therefore, any instance of corruption or malpractice can lead to misuse or abuse of resources of the public bodies, jeopardize the effective discharge of public functions due to the substandard goods or services procured, and tarnish the reputation of the public bodies.
To assist public bodies in building effective control against corruption and malpractice in their procurement processes and ensure goods or services are procured in an open, fair, competitive, and accountable manner, the Corruption Prevention Department (CPD) has developed a Corruption Prevention Guide on Procurement for Public Bodies.
The Guide sets out the common risks and recommended measures to assist management of public bodies to enhance their corruption prevention capability in procurement.
Part I: Integrity Management
To ensure compliance with the law and adherence to a high standard of integrity, and avoid pitfalls of corruption in carrying out procurement activities, all staff and members of the governing body of public bodies (hereafter referred to as governing members) should have a clear and adequate understanding of the relevant legal and integrity requirements.
A. Legal requirements
The Prevention of Bribery Ordinance (POBO, Cap. 201) criminalises the bribery of public servants, including staff and governing members of public bodies. Also, these personnel are subject to the common law offences such as Misconduct in Public Office (MIPO).
A1. Prevention of Bribery Ordinance
The following are major sections of the POBO relevant to staff and governing members of public bodies in relation to their procurement duties –
– Section 4 – Bribery
It is an offence for any public servant (e.g. a staff or governing member of a public body), in Hong Kong or elsewhere and without lawful authority or reasonable excuse, to solicit or accept any advantage as an inducement to or reward for his performing or abstaining from performing any act in his capacity as a public servant.
– Section 5 – Bribery in regard to Public Contracts
It is an offence for any public servant, without lawful authority or reasonable excuse, to solicit or accept any advantage as an inducement to or reward for his giving assistance or using influence in regard to contracts with the public body.
– Section 6 – Bribery for Procuring Withdrawal of Tenders for Public Contracts
It is an offence for any person, without lawful authority or reasonable excuse, to solicit or accept any advantage as an inducement to or reward for withdrawal of a tender or refraining from making a tender for any contract with a public body.
– Section 8 – Bribery of Public Servants by Persons having Dealings with Public Bodies
It is an offence for any person, without lawful authority or reasonable excuse, to offer any advantage to a public servant while having dealings of any kind with the public body in which the public servant is employed.
[Remarks: For the purpose of Section 8, there is no need to have a request for any reciprocal act by the public servant connected with the offering of the advantage.]
– Section 9(3) – Use of Misleading/False/Defective Document to Deceive Principal
It is an offence for any agent (e.g. a staff or governing member of a public body), with an intent to deceive his principal (e.g. the public body), to use any receipt, account or other document which contains any statement which is misleading, false or defective in any material particular in respect of which the principal is interested.
[Remarks: Section 9(3) does not require the element of offering and/or acceptance of advantage.]
For Sections 4, 5 and 6 of the POBO, the person who offers an advantage is also liable to the offence. The maximum penalty is a fine of $500,000 and imprisonment of seven years (for Sections 4, 8 and 9(3)) or ten years (for Sections 5 and 6).
A2. Misconduct in public office
Corrupt activities in the public sector have over the years evolved from straightforward bribery to illegal acts involving varying nature and degree of abuse of authority, conflict of interest or other misconduct. Such malpractice may amount to the common law offence of MIPO. The key elements of the offence of MIPO are –
– a public official;
– in the course of or in relation to his public office;
– wilfully misconducts himself, by act or omission (e.g. by wilfully neglecting or failing to perform his duty);
– without reasonable excuse or justification; and
– where such misconduct is serious, not trivial, having regard to the responsibilities of the office and the officeholder, the importance of the public objects which they serve and the nature and extent of the departure from those responsibilities.
B. Integrity requirements
Integrity goes beyond compliance with the law. Public bodies should impose suitable integrity requirements that go beyond legal requirements to keep their staff and governing members from abusing their powers, rights and privileges. They should also develop their own Codes of Conduct or guidelines on integrity-related matters having regard to their own circumstances and operational needs. The following highlights the key integrity issues for attention.
B1. Acceptance of Advantages and Entertainment
Public bodies should issue clear guidelines on the acceptance of advantages and entertainment ( Chapter 1.2.1) to –
– prohibit staff and governing members from soliciting or accepting advantages from persons having business dealings with the public bodies, except accepting, but not soliciting, certain advantages within specified permissible natures, values and circumstances where no improper influence is involved (please refer to Appendix 1 for a sample form to report such advantages accepted or to be accepted); and
– restrict staff and governing members from accepting lavish, unreasonably generous or frequent entertainment, or indeed any entertainment which could potentially give rise to conflict of interest, put them in an obligatory position in the discharge of their duties, compromise their impartiality or judgement, or bring them or the public bodies into disrepute bearing in mind public perception.
B2. Management of Conflict of Interest
A conflict of interest situation arises when the “private interests” of a staff or governing member of a public body compete or conflict with the interests of the public body, or the official duties of the staff or governing member. Private interests include financial and other interests of –
– the staff or governing member himself;
– his family and other relations;
– his personal friends;
– the clubs and associations to which he belongs;
– any other groups of people with whom he has personal or social ties; or
– any person to whom he owes a favour or to whom he may be obligated in any way.
Public bodies should issue clear guidelines on proper management of conflict of interest
B3. Handling of Confidential Information
Information relating to tenders and contracts could be of commercial value to competing bidders. Due care should be exercised to prevent leakage of confidential information which may jeopardise the procurement exercise. To safeguard against malpractice, public bodies should–
– put in place a classification system for classifying confidential information relating to procurement;
– make known to staff and governing members such classification system;
– restrict access to confidential information to authorised personnel only and require them to protect it from leakage (e.g. lock up the confidential documents when not in use, not to use them for personal gain); and
– require the relevant personnel (e.g. members of the tender opening team and the tender evaluation panel) to undertake in writing not to divulge, without permission, any classified information.
For more details on the Corruption Prevention Guide on Procurement for Public Bodies, please visit: https://www.icac.org.hk/en/law-service/educate-resources/publications-and-videos/ps/index.html
