Minutes of the Thirteenth Meeting of the Bills Committee to study
the Prevention of Bribery (Miscellaneous Provisions)(No.2) Bill 1995

Meeting with the representatives of AGC and ICAC

Matters arising from the 12th meeting regarding ICAC’s investigation of non-corruption cases

Members noted the paper prepared by ICAC in respect of investigation of non-corruption cases (issued vide LegCo Paper No. HB 867/95-96).

2. Mr R ALLCOCK highlighted that ICAC’s extraordinary statutory powers, contained in the Prevention of Bribery Ordinance (POBO), could only be used in the investigation of POBO offences. The powers of arrest and search under the Independent Commission Against Corruption Ordinance (ICACO) in respect of certain non-corruption offences were conferred on the ICAC for operational needs. The issue of how these powers in respect of the investigation of non-corruption cases were exercised was a matter of operation and should not be dealt with by legislation. Operational matters could best be taken up at the LegCo Panel on Security.

Internal guidelines to investigate non-corruption offences

3. Although Mr Albert HO appreciated the difficulty in restricting the use of extraordinary powers by statutory provision, he took the view that there should be certain internal guidelines so that (a) extraordinary powers should cease to be used; and (b) the case should be referred to other relevant law enforcement agencies when ICAC officers had no ground to believe that there was a corruption offence. Mr LI Ming-chak responded that every investigation case was brought up frequently to the attention of the chief investigator or the principal investigator. If the case file revealed that suspicion of any corruption element had been eliminated, the case would be reported to the Assistant Director of Operations for a decision of referral to another appropriate law enforcement agency. He reiterated that the use of any special investigation powers had to be approved by the Head of Operations personally.

External checks and balances in respect of ICAC’s investigation of non-corruption cases

4. Mr C J KERSHAW explained that AGC would give advice to ICAC, before any prosecution, as to whether the case should be referred to another law enforcement agency. In response to Mrs Selina CHOW’s enquiry, Mr LI Ming-chak confirmed that AGC had advised ICAC to refer cases to the Police in the past (particularly complicated cases) even at the preliminary stage. Mrs CHOW further asked and Mr LI answered that ICAC would approach AGC not only for legal advice but also for advice as to whether the case should be handled by ICAC or not.

5. Mr KERSHAW also cautioned that the Bill had already proposed that certain powers at present vested in the ICAC Commissioner should be vested in the courts. Hence ICAC would have to justify the use of these extraordinary powers to the courts by showing measureable grounds for believing that there was a POBO offence. In addition, the Commissioner had to be satisfied that the use of these powers was necessary before making an application to the court.

6. Mr ALLCOCK supplemented that it was possible for a suspect to challenge the use of such powers in court. The Chairman and Mr Albert HO opined that it would be difficult for a suspect to do so in reality despite the fact that it was technically possible. In this regard, Legal Adviser (LA) pointed out that the proposed amendment to section 13 of the POBO which required the Commissioner to have reasonable cause to believe that an offence under the POBO might have been committed before invoking his special powers of investigation was a stricter test. Whether such a remedy in practice would strike the right balance for the suspect was debateable, since he had to take the initiative to seek judicial review.

7. As regards whether the checks and balances were sufficient in respect of the use of extraordinary powers by the ICAC, Mr ALLCOCK reminded that the Police/ICAC Operational Liaison Group would monitor the distribution of cases between the two authorities. Mr LI Ming-chak explained that the Group would review major on-going cases as well as referred cases in the last six months and discuss the policy of referral. The Chairman further asked and Mr LI confirmed that the Group could make an assessment, after a case had been completed or referred, as to whether it should have been referred or had been referred at an appropriate time.

8. In this connection, Members noted that representatives of the Police/ICAC Operational Liaison Group had agreed to attend the next meeting to be held on 25 March 1996. As the matter under discussion at the coming meeting related also to the work of the police, Members agreed that Members of the LegCo Panel on Security should be invited to the meeting.

Clerk

9. Mr Andrew CHENG referred to the total number of 143 persons prosecuted for offences listed in section 10(5) of the POBO in 1991 (as stated in Chart E of the ICAC’s paper) and requested the ICAC to provide a detailed breakdown of these cases by offences for future discussion at the LegCo Panel on Security. Mr KERSHAW undertook to provide the statistics later. In this connection, Mr LI Ming-chak reiterated that it would be a waste of Police resources to hand over some cases to the Police at an advanced stage if the Police had to interview witnesses and collect evidence all over again. In this regard, the Chairman asked and Mr KERSHAW agreed to provide figures on the proportion of arrests made under section 10(2) to other offences during the course of corruption investigations in 1994 and 1995, for consideration at the LegCo Panel on Security.

ICAC

ICAC

POBO - Section 7. Bribery in relation to auctions

10. Members noted the AGC’s responses as set out in the paper in response to questions raised by the Chairman regarding section 7 of POBO (issued vide LegCo Paper No. 869/95-96). Mr ALLCOCK stressed that it would not be proper to comment on whether someone had committed an offence when such person had not been or would not be charged for such an offence.

11. With reference to the Guidelines on the Conduct of Auctions drawn up by the Review Panel on Land Auction Arrangements, Mrs Selina CHOW asked, and Mr ALLCOCK agreed to provide a copy for Members’ reference.

AGC

12. In response to the Chairman’s enquiry, Mr LI Ming-chak explained that it would not be possible to say whether an offence under section 7 had been committed without full details of what had happened and why. It was important to have proof that a person opted out from a public auction for advantage. However, if it was a business agreement (in light of the risk involved) for joint bidding or changing the combination of bidders, it was unlikely that the provisions of section 7 would have been breached.

13. Mr Albert HO then quoted a case regarding regular competitors in bidding agreeing to bid/not to bid in a land auction, holding an internal auction subsequent to the successful bidding and sharing out the price difference, and asked whether the conduct would breach the provisions of section 7. Mr ALLCOCK undertook to consider this and revert to Members later.

AGC

POBO - Section 9. Corrupt transactions with agents

14. With reference to section 9 of POBO, the Chairman queried why the phrase "whether in Hong Kong or elsewhere" (as in section 4) was not included. Mr ALLCOCK informed Members that the ICAC Review Committee had discussed the issue. The Review Committee had requested AGC and ICAC to study possible remedies. The possibility of amending the Criminal Jurisdiction Ordinance regarding cross-border corruption was initially considered. However, it was concluded that such amendment would not be apt largely because the Ordinance dealt with offences having several elements whereas the offence under section 9 only involved a single act, either soliciting/accepting advantage or offering advantage.

15. An amendment to section 9 along the lines of section 4 was also considered not appropriate because section 9 related to agent and principal. It did not have any necessary link to anyone in Hong Kong whereas section 4 (which related to public servants) required a link to someone in Hong Kong.

16. Mr ALLCOCK further explained that the amendment had to build in a link to Hong Kong and different permutations had been looked into. Precedents elsewhere had been sought in view of the fact that the amendment would have impact on other jurisdictions. Consultation was also important, particularly with the business community. Members noted that it was intended that a consultation paper would be available by the end of the current year and LegCo Panel on Security would also be consulted.

17. As regards section 9 in its present form, the Chairman asked whether prosecution could be made if payment of advantage happened outside Hong Kong. Mr ALLCOCK responded that common law might cover unlawful acts committed outside Hong Kong in certain cases. However, section 9 might be construed in a limited way because the phrase "whether in Hong Kong or elsewhere", which appeared in section 4, did not appear in section 9. It was therefore necessary to clarify the territorial scope of section 9. In this connection, LA remarked that the logical direction of the remedy would be an enlargement of jurisdiction, which was an important issue requiring further consultation, as proposed by the Administration.

Other outstanding issues

POBO - Section 30. Offence to disclose identity, etc of persons being investigated

18. LA reported that Hon Christine LOH’s proposed CSAs in respect of section 30 of POBO would be sent to the Administration for comments within the next few days.

LA

ICACO - Section 10D. Power to take finger-prints and photographs of arrested persons

19. Mr ALLCOCK referred to his letter dated 20 December 1995 and asked Members to consider the proposed CSA to section 10D of ICACO.

POBO - Section 13. Special powers of investigation

20. Members noted that the Chairman remained not satisfied with proposed section 13 of POBO by which the Commissioner was still entrusted to invoke his special powers of investigation. He would therefore move a CSA to the effect that court’s approval would be required for the Commissioner to invoke these powers.

Dates of future meetings

21. The next meeting would be held on Monday, 25 March 1996 at 10:45 a.m. to meet with the representatives of the Police/ICAC Operation Liaison Group.

22. Members also agreed to schedule two more meetings to meet representatives of AGC and ICAC as follows :

1. Wednesday, 27 March 1996 at 8:30 a.m. to study section 30 of POBO and section 10D of ICACO; and
2. Tuesday, 16 April 1996 at 8:30 a.m. to study all outstanding issues.

23. There being no other business, the meeting ended at 4:15 p.m..

LegCo Secretariat
18 April 1996