ICAC POST
ICAC POST

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July 2014,
Issue No.17

 

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Hong Kong - a front runner in graft fight


ICAC Commissioner Mr Simon Peh Yun-lu receives a commemorative plaque from Dr Huguette Labelle, Chair of the Transparency International

ICAC Commissioner Mr Simon Peh Yun-lu receives a commemorative plaque from Dr Huguette Labelle, Chair of the Transparency International


While international and local surveys rank Hong Kong as one of the cleanest places in the world, the city remains a front runner in combating corruption.

In a recent duty visit to Europe, ICAC Commissioner Mr Simon Peh Yun-lu met with Dr Huguette Labelle, Chair of the Transparency International (TI), in Berlin, Germany. The TI is a non-government organisation that monitors corruption issues worldwide.

Dr Labelle pointed out that Hong Kong was regarded as a front runner in the fight against corruption, enjoying a very high international rating as a clean city. She also invited the ICAC to share its graft-fighting experience as a role model for the TI’s regional study in anti-corruption agencies.

The Commissioner also called on anti-corruption bodies in Germany, the World Economic Forum and the International Institute for Management Development in Switzerland, which all recognised the efforts of Hong Kong in keeping a clean business environment.

Locally, the ICAC commissions independent surveying agencies to conduct opinion polls annually.

According to the latest survey, the public was found to adopt zero tolerance against corruption, while 95.6 per cent of respondents said the ICAC deserved their support for its hard work in maintaining a corruption-free society and upholding fairness and justice.

Meanwhile, the vast majority of respondents or 98.8 per cent confirmed that they did not encounter corruption in the past 12 months.

Director of Corruption Prevention Mr Tse Man-shing
 

Director of Corruption Prevention Mr Tse Man-shing

Partnership to prevent corruption

“Rigorous enforcement actions to bring the corrupt to justice certainly make corruption a high risk crime, but the best cure to the problem lies in prevention,” ICAC’s Director of Corruption Prevention Mr Tse Man-shing opined.

Do both public and private organisations need corruption prevention strategies?

Certainly. In recent years, the proportion of corruption complaints involving the private sector has surpassed the public sector, possibly indicating reduced tolerance of corruption among businesses. While it is imperative for the public sector to minimise opportunities for corruption, individual companies have found it necessary to adopt measures to prevent graft and fraud from eroding profits and, in the long term, jeopardising their business.

How does the ICAC manage to help them prevent graft?

Corruption prevention is a management responsibility. The ICAC stands ready to help the management of both public organisations and private companies to prevent corruption in their operations and procedures. For major government departments and public bodies, individual Corruption Prevention Groups have been formed with the Corruption Prevention Department (CPD) of the ICAC to identify corruption-prone areas and map out corresponding prevention strategies. For private companies and organisations, CPD has an Advisory Services Group (ASG), which is specifically tasked to provide free and confidential corruption prevention advice on request.

Is the business sector keen to seek assistance from the ASG?

Since 1985, the ASG has provided advice for more than 6,000 private companies of various trades and industries, mainly small and medium enterprises on an individual basis. From a collective basis, the ASG works closely with the trade and the professional bodies to develop training packages and best practice modules for individual private companies. Such reference materials cover the generic problems associated with procurement, staff administration, inventory control as well as specific areas of corruption concern unique to a particular trade or industry. Apart from giving tailor-made corruption prevention advice to individual companies, the ASG also conducts training talks and seminars for managerial and supervisory staff.

Over the years, the ASG has compiled over 30 such modules and checklists, such as the training package recently produced for procurement staff.

 

Training package helps prevent graft in procurement

Procurement of goods and services, which often involves substantial expenditure, is most vulnerable to corruption and malpractice as revealed in past cases, and an area of concern to organisations in the public and private sector as well as the ICAC.

To help managerial staff of private organisations prevent corruption and malpractice in procurement, the Advisory Services Group of ICAC’s Corruption Prevention Department has produced a self-learning package.

Launch of a training package on procurement
 

Launch of a training package on procurement


Training Package on Corruption Prevention in Procurement
 

Training Package on Corruption Prevention in Procurement

The user-friendly training package features three videos each revealing possible corrupt practices in the procurement systems of private organisations with corresponding preventive measures.

Upon request, the ASG also offers to private companies free and confidential advice on corruption prevention and good governance.

To promulgate the training package, the Hong Kong Ethics Development Centre (HKEDC) under ICAC’s Community Relations Department organised a thematic seminar in June this year. Over 200 practitioners involved in procurement function attended the seminar, which featured practical sharing by representatives of the ICAC and two major professional bodies.

In view of the overwhelming response, another seminar will be held in late August. The HKEDC also provides tailor-made corruption prevention education for individual companies.

Advisory Services Group
Tel: (852) 2526 6363
Email: asg@cpd.icac.org.hk
Hong Kong Ethics Development Centre
Website: www.hkedc.icac.hk
Tel: (852) 2587 9812
Email: hkedc@crd.icac.org.hk

CEO jailed for bribery and fraud over $9.2m purchase orders

CEO jailed for bribery and fraud over $9.2m purchase orders

A chief executive officer (CEO) of a printing company was sent to jail for five and a half years for bribery and fraud over $9.2 million worth of purchase orders for printing products.

The CEO approached clients of the printing company to solicit business for a firm controlled by him. Assisted by a marketing manager of the printing company, the CEO falsely represented to five clients that his firm and the printing company were associated or related companies.

As a result, the clients were induced to place with the CEO’s firm a total of 140 purchase orders for printing products worth over $9.2 million. The CEO’s firm subsequently procured those products from the printing company at a lower cost, and earned price differences of over $1.2 million.

A production manager of the printing company accepted a total of over $128,000 from the CEO as rewards for not disclosing the scam.

The trio was subsequently laid with bribery and fraud charges. After being convicted of the charges, the CEO received a jail term of five and a half years, while the marketing manager and the production manager were jailed for two and a half years and one year respectively.

In passing the sentences, the judge said the court had to mete out custodial sentences to them as their offences were serious and constituted a serious breach of trust.

 


Corruption complaints in 2014 (January - June)