Cutting Off the Ugly Head of Private Sector Corruption In Singapore

with contributing authors Kabir Singh and Shobna Chandran

Introduction

Corruption in Singapore has been characterized by high-profile cases involving public officials. For example, in 2014, two former senior public officials were prosecuted for allegedly obtaining sexual gratification in exchange for favoring certain companies; in the same year, a university professor was prosecuted for obtaining sexual gratification and other gifts from a student in exchange for better grades. These cases have raised and clarified interesting issues in relation to Singapore’s anti-corruption laws.

Most recently, however, the Singapore High Court made clear that private sector bribery was equally abhorrent, tripling the jail term (from two to six months) of a marine surveyor convicted on corruption charges relating to the receipt of bribes to omit safety breaches in his reports. Public Prosecutor v Syed Mostofa Romel [2015] SGHC 117.

This case is significant for the guidance it gives on sentencing of corruption charges. More importantly, it dispels the perceived distinction between corruption in the private and public sectors.

Summary of Facts

The accused was an associate consultant with a marine surveying firm. His job was to inspect vessels before they were allowed to be docked at port terminals in order to ensure that the documentation of incoming vessels was in order and that the vessel was seaworthy. If a vessel was classified as high-risk, it would not be allowed to dock unless and until it rectified any problems identified by the surveyor.

In the course of an inspection of an oil tanker off Singapore’s Jurong Island on March 10, 2014, the consultant informed the tanker’s captain and chief engineer of several observations he would be making that would result in a high-risk certification.  The captain argued that the defects were minor ones which could be readily rectified.  He asked the consultant how the situation could be resolved and the consultant informed him that money would do so.

The consultant omitted the high-risk observations when an agreement was reached as to a suitable sum, but the captain reported the incident once the tanker docked.

The District Court convicted the consultant, but the Prosecution appealed the two-month sentence imposed, as “manifestly inadequate.”

Judgment

The Singapore High Court issued a written judgment on April 28, 2015, tripling the custodial sentence of the accused to six months. In doing so, the Court explicitly rejected as a misperception that only public sector corruption was punishable by custodial sentences while private sector corruption would typically attract only a fine.

The Court noted that with public services being increasingly outsourced, there is a need to hold the private sector accountable for the public services they are responsible for delivering.

The Court stated that although “the ways in which private sector corruption can manifest its ugly head are diverse,” they could be fit into three broad (and non-exhaustive) categories:

1. Those who accept kickbacks for conferring benefits will be given a custodial sentence depending on the specific facts of the case
2. Those who solicit bribes in return for not discharging their duties can also expect custodial sentences
3. Those who solicit bribes by threatening to withhold the legitimate rights of others can expect custodial sentences

The Court pointed out the heightened culpability in the third category because the threat of harm to the paying party without a lawful basis will generally result in the paying party being deprived of his legitimate rights unless he pays a bribe. For example, a bribe may be solicited for the timely processing of applications for licences/permits or to ensure that “an applicant’s application is…not somehow inexplicably misplaced.”

Such offences should result in custodial sentences because they destroy Singapore’s reputation for transparency in the business context.  Indeed, the Court observed that such acts which undermine legitimate rights “will not be tolerated and will be severely dealt with.”

Accordingly, the Court found that the conduct of the consultant fell into the third category.  Further, the Court disregarded the classification of the consultant as a first-time offender and held that undue weight had been given by the trial judge to his guilty plea.

Implications

This case highlights the stringent approach of the Singapore courts toward corruption in both the public and private sector.  In this regard, the Chief Justice opined, “this type of corruption is antithetical to everything Singapore stands for” and “clean and honest dealing is one of [Singapore’s] key competitive advantages and corruption compromises the predictability and openness which Singapore offers and investors have come to expect. This is a hard-won prize achieved through our collective efforts as a society and we must not allow these to be undone. ”

This case further affirms the zero-tolerance policy for corruption in Singapore, regardless of rank and seniority, both in the public and private sectors.

Similarly, in January 2015, the Prime Minister also announced a number of key developments in this area:

1. The Government is reviewing the Prevention of Corruption Act (Singapore’s principal anti-corruption law) with a view to keeping pace with international developments.
2. The Corrupt Practices Investigation Bureau (Singapore’s central agency for investigating corruption) will have its manpower increased by 20 percent from its current strength of about 120.
3. A Corruption Reporting Center will be set up in the city center so that the public can report graft incidents more discreetly and at a more publicly accessible location. This supplements the current avenues available for the public to report corruption to the Corrupt Practices Investigation Bureau.

These recent development demonstrate Singapore’s commitment to maintain the country’s leading reputation for transparency, openness and insusceptibility to corruption.