Meeting with the representatives of AGC and ICAC
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Members noted the list of issues related to other sections of the Prevention of Bribery Ordinance (POBO) and the Independent Commission Against Corruption Ordinance (ICACO) - which was drawn up by the Chairman for discussion of the Bills Committee (issued vide LegCo Paper No. HB 692/95-96). The Chairman informed Members that he would bring up other related issues (not covered by the list) at the Security Panel for discussion.
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2. Representatives of AGC and ICAC gave their verbal replies to the list of issues. Members also raised a number of questions on their responses. The gist of the ensuing deliberations is summarised in the following paragraphs.
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Section 10. ICACO - Power of arrest
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3. The Chairman drew Members attention to para. 5.5 of the ICAC Review Committees (Review Committee) Report which reported that the proportion of arrests made under section 10(2) for other offences during the course of a corruption investigation made up 36%, 28% and 47% of the total number of arrests in 1991, 1992 and 1993 respectively. He expressed grave concern that the proportion of prosecution and investigation for non-corruption cases had increased in the past few years. In this connection, Mr LI Ming-chak explained that the percentage of other offences in 1993 had increased due to a particular case relating to driving licences which had led to over 300 prosecutions. The Chairman further referred to para. 5.6 and para. 5.15 of the Review Committees Report and stressed that the powers entrusted with the ICAC were powers to fight against corruption, and they should not be exercised for other purposes. Mr Albert HO concurred with the Chairmans view. He asked and Mr LI Ming-chak confirmed that ICAC would refer the case to the relevant authorities if it was found totally unrelated to corruption at the early stage. However, Mr HO recalled that ICAC had prosecuted cases which were totally unrelated to corruption in the past. Mr Albert HO also expressed concern that it might lead to unfairness if ICAC used its special powers to investigate corruption offences for investigating non-corruption offences.
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4. Mr C J KERSHAW pointed out while some 4,000 cases were commenced by the ICAC in 1994 and 1995, the numbers of arrests made solely under S.10(2) were 89 and 76 respectively. He said that he did not see how such figures alone could really assist the Committee but suggested they gave no cause for concern that the Commission was abusing its powers. He added that it would be up to the AGC to decide, depending on the availability of relevant evidence, whether the arrested person would be more aptly prosecuted for corruption-related offences or not.
(Post-meeting note : ICAC informed that further research
has confirmed an error in the arrest figures which
will be corrected at the next meeting.)
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5. As a member of the Review Committee, Miss Christine LOH informed that the Review Committee had considered the issue but the ICAC considered that it would not be efficient to refer the case at its advanced stage to another law enforcement agency. However, the Review Committee did express concern over the relatively high percentage of non-corruption arrests made by the ICAC under section 10(2). It was concluded that the concern could be dealt with by way of policy arrangements in respect of the working relationship between the Police and the ICAC and not necessarily by legislative amendment to section 10(2).
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6. Mrs Selina CHOW said that the issue had been brought up at the Security Panel enquiry in relation the termination of employment of Mr Alex TSUI and it was decided, at that time, to leave it to the Review Committee. She expressed disappointment at the lack of concrete remedial suggestions by the Review Committee. She queried whether the ICAC should make arrests for corruption-related offences only and pointed out that it was not acceptable for ICAC to continue investigation only for the sake of efficiency. In response to Mrs CHOWs request, Mr LI Ming-chak would provide figures of actual cases which had been handed over to the Police when it was concluded at the end of the investigation stage that no corruption related element was involved. Mrs Selina CHOW also asked ICAC to provide the number of arrests which were not made under section 10(2) and to explain the reasons for invoking other legislation.
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ICAC
ICAC
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7. Mr LI Ming-chak then briefed Members on the procedures of investigation by ICAC. Mr LI stressed that it was difficult to prosecute a corruption offence even with documentary evidence if either party did not inform ICAC of the corrupt transaction. Based on past experience, the convicted party of a non-corruption offence would be more willing to co-operate with ICAC in providing information for related corruption offences. In addition, it would not be possible to prove a corruption offence for certain cases if the criminal acts had not been investigated. Mr KERSHAW supplemented that special court search warrant was required for non-POBO offences under section 10B of ICACO. The Chairman held the view that the case should be referred to other law enforcement agencies if there was no chance to prosecute a corruption offence in view of the lack of co-operation of either party.
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8. The Chairman asked and ICAC agreed to provide number of arrests made by ICAC in relation to offences prescribed in section 10(2) of the ICACO in 1994 and 1995, to set out ICAC procedures for investigating offences, particularly those related to section 10(2) offences and to explain the mechanism in deciding whether the case should be referred to the Police. In this regard, Miss Christine LOH also suggested that ICAC should explain why it should be given the power to investigate other offences and whether ICAC had exercised the powers given to investigate other offences in a discreet manner. She opined that the Bills Committee might consider whether ICAC should be given the powers to investigate non-corruption offences. If the answer was affirmative, the issue of co-ordination among the various law enforcement agencies would arise which might be more appropriately taken up at the Security Panel.
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ICAC
ICAC
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9. Members noted that an agreement on the division of work between the Commercial Crime Bureau and the ICAC had been reached after the publication of the Report of the Review Committee by which the former would investigate cases related to fraud whereas the latter would investigate cases related to corruption in the areas of credit cards. In addition, the Police/ICAC Operational Liaison Group had been established so as to agree on the classification of cases of concerns and their distribution between the two authorities. Two formal meetings would be held twice a year with communication on a regular basis.
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10. Mr R ALLCOCK remarked that legislative solution might not be appropriate to address Members concerns on the operational aspects of ICACs investigation. However, the Chairman held the view that clear stipulation of ICACs powers in respect of non-corruption offences or a statutory mechanism for referral could be made by way of legislation. To consider whether the existing mechanism was sufficient for an effective interface, Mrs Selina CHOW suggested and Members agreed that the Bills Committee should listen to views from respective representative(s) of the Police/ICAC Operational Liaison Group on whether the Groups purpose had been achieved and whether there were any practical difficulties or problems.
(Post-meeting notes : Due to the unavailability of ICACs representatives, the meeting with the Liaison Group which had then been scheduled for 13 March 1996 was postponed.)
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Clerk
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Section 2. Interpretation of POBO
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11. In response to the Chairmans enquiry, Mr R ALLCOCK said that employees of subsidiary, associated or holding companies of the public bodies specified in the Schedule to POBO would not be regarded as public servants. Mr A R SCOTT concurred with such a proposition.
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12. The Chairman expressed concern that if subsidiary, associated or holding companies of the public bodies specified in the Schedule to the POBO were not covered by the Ordinance, it might create a loophole in law in the light of the public functions performed by these bodies. Mr Ambrose LAU shared the view. He suggested that ICAC should review the issue to avoid loss of control. Mr A R SCOTT confirmed that ICAC had reviewed the Schedule on a regular basis. In addition, ICAC routinely identified suitable candidates for public body status as new organisation were created. In response to the Chairman, Mr SCOTT said that there was no clear-cut criteria adopted by the Government to determine which organisations should be included in the Schedule as "public bodies". In view of the various public functions to be performed, ICAC could not apply a single set of criteria. In addition, as far as access to information in the custody of public bodies was concerned, ICAC considered that the scope of the Schedule was sufficient. The Chairman reiterated that his concern over the Schedule was related to section 4 of POBO on the operational aspect but not related to corruption prevention. Mr LI Ming-chak responded that corruption offences which were not covered by section 4 could be dealt with under section 9. However, one possible operational problem was that an offence could not be prosecuted under section 9 if the corrupt transaction took place outside Hong Kong.
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13. In response to the concern that senior executives of public bodies indirectly employed through service companies would not be covered by POBO, Mr A R SCOTT explained that the loophole would not be very serious because (a) most of these senior executives (if they were at a high rank or provided significant services) would serve on the executive committee or board of these public bodies and thus they would be regarded as public servants; and (b) they would be caught by POBO if found having corrupt dealings with other public servants. In this regard, Mr ALLCOCK advised that it might be difficult to overcome such a loophole by way of legislation because the net of "public servants" would be too broad if "contracts for services" were included. Mr KERSHAW supplemented that it should be left to the court in deciding whether employees of those subsidiary or services companies belonging to the public bodies should be regarded as public servants. The Legal Adviser (LA) suggested that the question as to whether or not the problem was a damaging loophole should be subject to operational assessment by ICAC. Members could then consider whether legislative solution was needed after being informed of the assessment. In this regard, Mr Ambrose LAU reminded that recent amendment to the Inland Revenue Ordinance had already discouraged people from indirect employment through service companies for the purpose of tax avoidance.
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14. The Chairman further cited the Tung Wah Group of Hospitals and the mobile radio telephone services providers, the services of which would affect public interest as examples. He queried the rationale for not including such organisations in the Schedule. Mr A R SCOTT replied that, having regarding to establishment of the Hospital Authority, which was a Public Body, the fact that the conditions of subvention for social welfare agencies required Corruption Prevention Department access, and the fact that many schools were government schools, the case for adding all subvented bodies was slim. Members noted that ICAC Operations Department normally would not be consulted when Corruption Prevention Department identified a likely candidate for public body status. Members were of the view that that it might be timely to have an overall review of the Schedule. In view of Members concerns, Mr A R SCOTT undertook to include operational concerns in the current overall review of the Schedule.
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ICAC
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Date of next meeting
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15. The next meeting would be held on Tuesday, 19 March 1996 at 2:30 p.m. to consider the ICACs responses (as requested in para. 6 and para. 8) and to continue discussion on other outstanding issues related to sections 7, 9, 13 and 30 of the POBO.
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16. There being no other business, the meeting ended at 12:55 p.m..
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LegCo Secretariat
18 April 1996
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Hon James TO Kun-sun (Chairman)
