News analysis: In wake of Keppel bribery saga, some legal experts urge even stronger anti-corruption laws

SINGAPORE — Some legal experts have said that there is a case to be made to hold corporate entities and individuals liable if they ought to have known of corruption being committed, even if there is no evidence they actually did know.

They gave their views in the wake of the parliamentary debate surrounding the Keppel Offshore & Marine (O&M) bribery case in which six former senior executives at the company were given stern warnings but a decision was taken not to prosecute them.

Other experts are less certain of such a move, arguing that Singapore already has enough tools to deal with corruption cases and further tightening of the law may have unintended consequences.

During a debate in Parliament on Monday (Feb 6), more than a dozen Members of Parliament (MPs) across the aisle filed questions over the non-prosecution of the former Keppel O&M executives.

The debate highlighted, among things, the constraints on prosecuting bribery that occurs overseas because some vital witnesses may not be compelled to attend a hearing in Singapore.

The Corrupt Practices Investigation Bureau (CPIB) announced last month that the six unnamed former senior management of the company were issued stern warnings for alleged bribery.

The bureau, in consultation with the Attorney-General's Chambers, mentioned the difficulty in getting the evidence needed to secure convictions. Ms Indranee Rajah, Minister in the Prime Minister's Office, elaborated on this in Parliament on Monday.

Legal experts who spoke to TODAY also explained why some of those difficulties could have led to problems in bringing about a successful prosecution here.

They largely agreed that mounting a charge while fully knowing that there was insufficient evidence to fulfil elements of an offence might, in the words of one expert, bring “disrepute” to how Singapore administers criminal justice.

SHOULD THOSE WITH ‘CONSTRUCTIVE KNOWLEDGE’ BE HELD LIABLE?

During the debate, Leader of Opposition Pritam Singh asked if investigations revealed that the company’s board of directors at the time had “constructive knowledge” of what was happening when large bribes were allegedly being paid to a Brazilian firm.

Constructive knowledge refers to knowledge that a person is presumed to have had because the person should reasonably have possessed that knowledge.

Ms Indranee replied that having constructive knowledge of corruption was not an offence, so it was not investigated by CPIB.

Law lecturer Benjamin Joshua Ong said that there are certain situations where a person is legally obliged to report knowledge of an offence to the authorities, as set out in Section 424 of the Criminal Procedure Code.

The assistant professor at the Singapore Management University (SMU) said that he “cannot comment” on the desirability of extending such obligation to corruption-related offences as well.

He added that it may lead to a “paradoxical effect” of driving the bribery further underground or multiplying it, with the actors potentially driven to bribe more individuals with knowledge of such matters.

Asst Prof Ong also said that there are other means to encourage the reporting of corruption, such as how the Prevention of Corruption Act extends legal protection for informants.

Criminal lawyer Marshall Lim said that it was worth noting that there is already a “wide spectrum” of offences that may be prosecuted under the Prevention of Corruption Act, beyond the actual giving or receiving of bribes.

They include the abetment of corruption, engaging in a criminal conspiracy to commit corruption, or attempts to commit corruption.

Mr Lim, who is a former deputy public prosecutor, said: "An individual may not participate in the most direct acts of providing or receiving gratification but may be liable for more 'upstream' acts, provided always that the evidence can prove his involvement in those inchoate offences.” 

Former attorney-general Walter Woon said that he was “ambivalent” on the need to further tighten the Prevention of Corruption Act to implicate individuals solely on the presumption that they ought to know about the corruption happening.

On one hand, he said, it would make it “easier” from the prosecution’s point of view to go after individuals who are responsible.

However, it may be “very dangerous” for directors of the company, in particular non-executive directors, he added.

Professor Woon, who is now Lee Kong Chian Visiting Professor at SMU and emeritus professor at the National University of Singapore with research interests in criminal law, company law and international law, also said: “Speaking from experience as a director of a listed company, the board is at the end of the line of reporting."

For example, non-executive directors “will only know what management chooses to tell them”.

On the other hand, Associate Professor Ferlin Jayatissa, a practising lawyer who also teaches at the Singapore University of Social Sciences (SUSS), said that the “constructive knowledge element ought to be introduced to hold (to account) those who ought to have known about the giving and receiving of gratification and its corrupt intent”.

Agreeing, Associate Professor Eugene Tan who is law lecturer at SMU said: “There is a case to be made for a corporate entity having constructive knowledge — or something akin to it — of a corrupt act but not doing anything to be made legally liable for the corruption offence.”

He suggested considering taking a leaf from the United States Foreign Corrupt Practices Act, where the use of third-party agents in a corruption scheme does not absolve a corporate entity lacking actual knowledge of the bribe, because it is deemed to know of the bribe.

He also referred to Britain’s Bribery Act, which cleaves towards a corporate entity being guilty of an offence of failing to prevent corruption where an associated person or entity engages in a bribery act — unless it has put in place adequate measures to prevent corrupt practices from taking place.

He said that such legislation would place the burden on corporate entities to demonstrate that they have done their best to prevent corruption.

“And that it is no defence to merely shift the blame to a few 'bad apples',” he added.

LACK OF EVIDENCE

During the debate on Monday, Ms Indranee said that an individual who had agreed to a plea deal in another jurisdiction did not admit to the offences when investigated by the authorities here.

Former senior member of Keppel O&M legal department Jeffrey Chow had cut a deal with US authorities to help prosecutors in their probe of the company and other former executives, reported Reuters in 2017.

According to a court document filed in August 2017, Chow was charged for creating and executing false agreements for the company, which falsely represented that payments were being made to an agent for his services, when in fact portions of the payments were being paid as bribes. 

According to a transcript of a US court hearing on Aug 29, 2017, Chow said he "discussed the economic terms" of the contracts with his "seniors" in the company. The transcripts did not name the seniors he was referring to.

Chow pleaded guilty to one count of conspiring to violate the Federal Corrupt Practices Act.

Lawyers explained that such plea deals alone may not be enough to bring about a prosecution.

“First, we are also not privy to the exact nature and content of those denials (of offences)," Mr Lim the criminal lawyer said.

"Second, the individual may seek to explain the reasons or downplay the significance for entering into a plea agreement in the foreign jurisdiction.” 

Assoc Prof Ferlin Jayatissa of SUSS said it is common practice that statements or positions taken during the plea bargaining or settlement process are held to be "without prejudice".

“This (means) that these statements or positions cannot be used against an individual outside the plea bargaining or settlement negotiations,” he added.

Prof Woon of NUS said that when a company pleads guilty or enters into a deferred prosecution agreement, "any admissions that it makes do not bind individuals unless it can be shown that they personally authorised those admissions".

‘SHOWBOATING’ PROSECUTION MIGHT BRING DISREPUTE TO SINGAPORE

The legal experts were unanimous in their view that prosecutors should not mount charges when they do not have access to the necessary evidence.

Mr Lim said that the Public Prosecutor, or the Attorney-General, does not prosecute only “sure-win” cases.

However, the Public Prosecutor is entitled to take the “most prudent course of action, which may be to decline court prosecution”, if it was assessed that there is no reasonable prospect of obtaining a conviction because of deficiencies in the evidence that cannot be overcome.

Likewise, Assoc Prof Jayatissa said that it would have been a “very shoddy prosecutorial decision” to enter a prosecution knowing that evidence was inadequate.

“That would be, to some extent, an abuse of process on its own. Prosecution must always go in knowing that it has enough evidence to make up the elements of the offence,” he said.

Prof Woon said: “In the present case where the acts occurred abroad, the amount of resources that would have to be poured into a prosecution will be enormous. It would be irresponsible to decide to prosecute on the off-chance that a conviction could be secured.”

On a broader level, Assoc Prof Tan of SMU acknowledged that although Singapore has taken a strong stance against corruption, mounting a “demonstrative” prosecution despite knowing deficiencies in evidence would be problematic because it would still involve significant public resources.

“There is also the risk that such a prosecution could be malicious, if not vexatious or frivolous,” he said.

“I don't think we want the Public Prosecutor to be 'showboating' that we take a tough stance against corruption. That would bring disrepute to our administration of criminal justice.”