in Anti-corruption Efforts in Hong Kong
Mr Tony KWOK Man-wai, SBS, IDS,
Former Head of Operations, ICAC, Hong Kong
on the Anti-Corruption Seminar,
Seoul Institute for Transparency
in Anti-corruption Efforts in Hong Kong
I am honoured to be invited by Mr Taewoon Kwak, Head of the Seoul Institute for Transparency to come and share with you Hong Kong’s latest development in the anti-corruption efforts. I have just retired in October this year after having worked in the ICAC for 27 years. I joined the ICAC as an Investigator shortly after its inception in 1975 and was subsequently promoted through a number of ranks to be the first local Deputy Commissioner and Head of Operations in 1996. Despite international concern and reservation, we have successfully demonstrated the continuous ICAC effectiveness after the Reunification of Hong Kong with the Mainland China in 1997. Having been a pioneer corruption fighter for 27 years and ICAC, being one of the first anti-corruption agencies set up in the world, I have developed a strong passion for anti-corruption mission and it is my intention to offer my voluntary service at the international arena to help fighting this common enemy of corruption, which is recognized more and more these days as a worldwide problem where no country can be immune. Indeed since my retirement two months ago, I have been invited to visit Mauritius as advisor to their newly set up ICAC, to Mainland to speak at an Anti-corruption Investigators Workshop at Hefei and to Japan as visiting expert in the UNAFEI's 5th Training Course on “Corruption Control in Criminal Justice”. Here again, I am most grateful for the opportunity to participate in this most worthwhile seminar and share with you my experience.
Hong Kong ICAC's Success Factors
Hong Kong’s fight against corruption is universally regarded as a success model. Before the ICAC was established in 1974, Hong Kong was probably one of the most corrupt cities in the world. Corruption was a way of life then and there was at that time a saying that “corruption existed from womb to tomb!” There was also a particularly close “business” association between law enforcement agencies and organized crime syndicates. Nearly all types of organized crimes, vice, gambling and drugs, were protected. As a taxi-driver, you could even buy a monthly label to stick on your taxi and it would guarantee you from any traffic prosecution. Such was the scale of open corruption in Hong Kong.
So, what is our secret of success? To me, there are five factors :-
First. There is top political will to eradicate corruption, which enables us to become a truly independent agency, directly responsible to the very top, i.e. the Chief Executive of Hong Kong. This ensures that we are free from any interference in conducting our investigation. Provided there is reasonable suspicion, we will investigate any person or organization without fear or prejudice.
Second. The strong political support was translated into financial support. We are probably one of the most expensive anti-corruption agencies in the world. Our annual budget amounted to US$90M, about US$15 per capita. You may wish to multiply this figure with your own country’s population and work out the anti-corruption budget that needs to be given to the equivalent of ours! However, looking at our budget from another angle – it represents only 0.3% of our entire Government budget or 0.05% of our Gross Domestic Product (GDP). I think you will agree that such a small “premium” is a most worthwhile investment for a clean society.
Third. We have strong legislative support. Our corruption legislation is very comprehensive, covering all types of bribery both in the public and private sector. Our charter is quite wide. Not only are we empowered to investigate corruption offences, we can investigate all crimes which are connected with corruption. We enjoy special investigative power, such as power to check bank accounts, requiring witnesses to answer questions on oath, restraining properties suspected to be derived from corruption, holding the suspects’ travel documents to prevent them from fleeing the jurisdiction. I must hasten to add that there is an elaborate check and balance system to prevent abuse of such wide power.
Fourth. We strive to be highly professional in our investigation. We are one of the first law enforcement agencies in the world to introduce the interview of all suspects under video; we have a dedicated surveillance team with over 120 specially trained agents who took surveillance as their life-long career. We have a Technical Services Division which provided first class technical support to the Operations Department of ICAC.
- Finally. We adopt a comprehensive “three-pronged” strategy in fighting corruption, i.e. through investigation, prevention and education. Education is particularly important in mobilizing public support which you all know is an absolute success factor in fighting corruption.
Current Challenges and Difficulties in fighting Corruption
Now, 28 years after the inception of the ICAC, and although the corruption problem is still under control and Hong Kong remains one of the most corruption-free societies in the world, there is no room for complacency. We are now facing the following challenges and difficulties in fighting corruption:
I. Corruption is getting more difficult to investigate
Corruption in itself is probably the most difficult crime to investigate, due to the fact that it is by nature a secretive crime, often involves only two satisfied parties. There is normally no eye-witness or scene of crime evidence available. The offenders are often highly educated, professional and high-powered who know how to cover up any trail of their crime and who are often in a position to make others keep the code of silence to abort any investigation. With the demonstrated effectiveness of the ICAC, the corrupt offenders are taking greater precautionary measures. They often take advantage of the high technology in communication and transfer of funds and in exploiting the loopholes created by cross jurisdictional problems, making investigation even more difficult. Conventional methods of investigation are not good enough to tackle serious corruption cases these days. We need to explore more proactive and sophisticated methods of investigation in order to stay on top of the corrupt.
II. Close association between organized crime and corruption
Corruption rarely exists alone. It is often a tool to facilitate crimes and it appears that most organized crime syndicates have some loose association with law enforcement agents. Over the years, ICAC officers have investigated a wide range of organized crimes facilitated by corruption. Law enforcement officers have been arrested and convicted for corruptly assisting drug traffickers and smugglers of various kinds; bank managers for consummating bank fraud and money laundering; bank and retail staff for perpetuating credit card fraud, etc.
The close association between corruption and organized crimes is best illustrated in a joint ICAC investigation with the Seoul Metropolitan Police into an international Counterfeit Credit Card (CCC) syndicate as described below.
Counterfeit credit card (CCC) fraud continues to be a lucrative source of revenue for organized crime groups. In 1992, Hong Kong was responsible for 32% of the world’s credit card fraud. Now, with the joint efforts of police and ICAC, we are only responsible for 2% of the fraud. This type of fraud is often facilitated by corrupt retail staff who steal the genuine credit card information from customers and pass them to the syndicate for making counterfeit cards. In March 2001, information was received that four members of a CCC syndicate were organizing a trip to Seoul, South Korea, where they intended to utter CCCs manufactured with data they captured in Hong Kong and elsewhere. A team of ICAC officers traveled to Korea to assist the Seoul Metropolitan Police in the identification of the suspects. The criminals were arrested in Seoul. In Hong Kong, simultaneous actions were taken, resulting in the seizure of credit card data and computer software used in the manufacture of CCCs. The leader of the syndicate was charged with CCC offences in Hong Kong and sentenced to a term of imprisonment. This case is a typical international syndicate with operation stretching through a number of jurisdictions. In recognition of the ICAC’s success in CCCs investigation, an ICAC Chief Investigator was awarded “Law Enforcement Officer of the Year” by the International Association of Financial Crime Investigators in America.
There are increasing public concern over instances discovered by ICAC of senior public officers misusing their official positions for personal gain. At the moment, The Hong Kong’s bribery law covers only instances where there is an identifiable act of corrupt offer, solicitation or acceptance of an advantage, hence is inadequate to deal with acts of corruption in the absence of bribery. As a temporary remedy, an old common law offence of “Misconduct in Public Office”, which dated back to the 18th Century in England, was used to prosecute the offenders concerned. However the situation was not entirely satisfactory because the common law offence was ill-defined and it is questionable whether it is appropriate and fair to use centuries old, vague and unwritten law to conduct prosecution. The absence of a statutory law does not assist in enhancing public awareness of the offence and cannot act as a deterrent in the absence of a clearly laid down sentencing guideline in the legislation.
IV. Corruption in the construction sector
As a result of the Asian Financial Crisis, many construction companies suffered financial difficulties and some were then resolved into using sub-standard construction material and work in order to cut costs. ICAC discovered a few serious cases of sub-standard piling, one particular case had resulted in the demolition of one whole block of a public housing estate. These cases also revealed the long-existing unsatisfactory system of multiple layers of sub-contracting, lack of site supervision and the use of unqualified site workers, which called for a comprehensive review of the entire system in the construction industry.
V. Inadequate recognition of corporate governance amongst the business sector
The recent scandal in the United States, i.e. Enron and WorldCom, had raised serious concern about the problem of corporate corruption throughout the whole world. Fortunately, ICAC in Hong Kong has recognized this problem many years ago and have been tackling this problem through effective enforcement (there were a few major cases of corporate corruption successfully prosecuted in past years), prevention and education. However there is a need to do more in this area in order to protect the investing public and to further enhance Hong Kong as the world’s financial and business centre.
VI. Lowering of ethical standards amongst the youth
Economic booms over the past two decades have brought about a materialistic culture, especially amongst the younger generation, whose ethical standard and values are easily swayed by media reports, social trend and peer pressure. Recent survey has confirmed the worrying trend of the young people’s greater tolerance towards corruption. It is therefore a pressing concern for us to promote a probity culture, foster positive values and ensure our younger generation has zero-tolerance to the crime of corruption as they grow up.