Business more corrupt than public sector in Hong Kong

Hong Kong – It was ironical that just as a top Sri Lankan delegation arrived in this city last week to study the workings of one of the best anti-corruption agencies in the world, the head of Hong Kong’s biggest business chamber was being hauled up in court on fraud charges.

As the delegation including parliamentarians, journalists, lawyers and the head of Sri Lanka’s anti-bribery commission were going through the halls of Hong Kong’s International Commission Against Corruption (ICAC) absorbing how corruption is virtually non-existent in the public sector, newspaper headlines carried pictures of a smiling Hong Kong General Chamber of Commerce Chairperson Lily Chiang Lai-lei appearing in court.

Corruption may be near to being non-existent in the Hong Kong government and its administration. However it’s a bigger issue in the private sector so much so that there are more complaints against the private sector than the public service (including the police) in the past five to six years. Police, once the most corrupt institution, is clean today except for stray incidents.

These are lessons indeed for Sri Lanka. And, if going by the definition of corruption in the Hong Kong lexicon which is ‘taking advantage’, almost every institution and most people in high places including the media and the private sector here are probably guilty of corruption. All ‘gifts’ are perceived as corruption while politicians blazing on the road with outriders and escorts, pushing others off the track or forcing traffic to come to a standstill, also comes under the ambit of corruption (taking advantage).

Add the amount of unaccounted for cash that exchanges hands in all sectors of government, public institutions and the private sector, and one can safely assume that Sri Lanka is a den of corruption!

Mike Burley, Chief Investigator of the ICAC’s Operations Department says corruption is perceived as a crime against integrity not honour. Few people get back to corruption after conviction as they are tainted for ever, he told the Sri Lankan delegation at one of the many briefings during the two-day tour of the spanking new complex of the Hong Kong Commission.

Subtle but firm
Security is tight but subtle at the ICAC office which has many state-of-the-art ‘interview’ rooms and an identification parade room similar to what you see in the movies. Suspects can be detained for upto 48 hours in the detention centre of the building which houses 1,300 officers including the ICAC Commissioner who is the CEO. Interrogation is done in ‘interview’ rooms in the presence of a lawyer (permitted for the suspect) and recorded on video cameras. A copy of the recording is given to the suspect.

In the case of businesswoman Chiang, she is under investigation by the ICAC, one of the most powerful institutions in Hong Kong, for alleged fraud. Will our authorities have the guts to take action against any of our ‘respected’ business leaders or for that matter any powerful politician, if a similar situation occurs? Your guess is as good as mine.

These examples are shown to illustrate the contrasting ways in which corruption is tackled in two countries both seeking to attract foreign investment and ensure a level playing field.

Daniel So, Principal Investigator at ICAC’s Operations Department, says one of the primary responsibilities in ensuring a clean society in Hong Kong is to make it a ‘just and secure’ place to do business. “We have the latest in intelligence gathering and intelligence-related technology which has produced significant results. We have good relations with other international agencies overseas to recover funds and catch suspects who flee abroad.” Even China which controls Hong Kong, after British administration ended in 1997, and runs it as a special region is keen on learning from the ICAC experience in combating corruption.

Lessons
It was a valuable learning experience for the experienced Sri Lankan team but as to how much of it can be put to practice in a (Sri Lankan) society where corruption is a way of life – even though we are unwilling to admit that it is another persistent sore like the conflict – remains to be seen. Yet many in the delegation comprising Justice Ameer Ismail, Chairman of the Permanent Commission to Investigate Allegations of Bribery or Corruption (CIABOC), Parliamentarians Wijedasa Rajapakse and Dayasiri Jayasekera, Sociology Professor Siri Hettige, Transparency International (TI) Sri Lanka Executive Director J.C. Weliamuna, private sector professional Ms Anuysha Coomaraswamy, lawyers A.K. Chandradasa (former Deputy Director-General at CIABOC) and Vincent Bulathsinghala (representing a NGO that works in the anti-corruption field), journalists Victor Ivan (Editor-Ravaya) and myself (Business Editor-The Sunday Times), and F.X. Vijayakumaran and Duleeka Vidanapathirana from TI, expressed a willingness to do their part in reducing corruption in Sri Lankan society. The January 10-15 visit was organised by the Hong Kong-based Asian Human Rights Commission (AHRC) whose executive director is a veteran Sri Lankan lawyer, Basil Fernando, in association with TI Sri Lanka.

During two internal discussions held by the Sri Lankan delegation on the crisis confronting Sri Lanka, Justice Ismail raised a valid point, “There is anger against corruption but how do we reform politicians? That’s our challenge”. UNP MP Jayasekera, among a group of MPs including Rajapakse constantly raising corruption issues, made a positive contribution to one of these discussions, saying, “We need to do something about it rather than just talking.”

ICAC was set up in 1974 after mass corruption particularly in the police force in the 1960s. This was owing to the influx of refugees from mainland China and also because economic growth was rapid. Social and regulatory systems didn’t support the structure. People ‘paid’ for the services they were entitled to get free. The most corrupt were policemen. Bribes were a way of life.

This went on until notorious Chief Superintendent of Police Peter Godber slipped past a security cordon and fled to London when police launched an investigation into his bribe-taking and fraud in 1973. The public by then had come to the end of their tether. Half a million people from a then population of 3 million (now 8 million) took to the streets demanding an end to corruption resulting in a special commission being set up to look into the issues which then led to the creation of the ICAC. (Sri Lankans - are you listening? Could we get onto the streets and fight against corruption and abuse of power?)

No politics
The ICAC success is essentially because it steers clear of politics, recruits the best in the business, pays salaries higher than other public servants and puts the police in order. Believe it or not – the Triads (powerful Hong Kong gangs that controlled gambling, prostitution and were responsible for most of the crime and extortion rackets) have been nearly silenced. It’s unlike in the movies where the Triads chase actor Jackie Chan sometimes across the world and invariably lose!

John Joseph Clancey, Chair of the AHRC and a senior lawyer, says the ICAC has sweeping powerful powers of investigation and can arrest people at anytime that are somtimes questioned by the media as being too excessive.

Regular public surveys by the ICAC show that people will not tolerate corruption. Earlier a lot of complaints were anonymous because people didn’t trust the ICAC and didn’t have confidence. That has improved in the last 10 years and more people are openly making complaints. In Asia, Hong Kong is the second best corrupt free society after Singapore with Japan in third place. ICAC officers are passionate, dedicated and devoted to their work.

Ms Jean Au Yeung, Director at ICAC’s Corruption Prevention Department says the commission’s annual budget is $8.5 million. “We ensure a level playing field for business. Our officers read the newspapers daily and check new developments.”

She says the commission is proactive, steps into public projects and offers advice on drawing up ‘clean’ tender documents and other procedures.

In 1974, 86 % of the complaints were against the public sector with 50 percent of that being against the police. In the same year, 14 % of the complaints were against the private sector.

In 2006 (over a 5-6 year period), the roles have been reversed: 61 % of the complaints are against the private sector while only 39 % are against public officials of which just 10% are against the police. Annually there are 3,500 complaints.

Private sector corruption is rampant in maintenance contracts as Hong Kong has hundreds of high rises and condos where there is a lot of room for manipulation.

Hong Kong and Sri Lanka have one thing in common: government doctors working in the private sector. ICAC officials say Hong Kong has a similar problem of channelled practice. “Because they are the best it is difficult to stop even though there is a clear conflict of interest in working in both places at the same time,” one official explained.

Hong Kong’s successful anti-corruption drive has seen many countries like Malaysia, Australia, Macau, China. Brunei, Korea and Mauritius, either learning from the ICAC model or following it.

The organisation has a group of professionals from many walks of life like technicians, accountants, engineers and a few lawyers to make sure all expertise is on board to tackle sometimes complex issues of corruption.

Some of the ICAC’s best known cases were the probe and conviction of some officials at the Overseas Trust Bank which went bankrupt, a top official at the Justice Department and another high flier at the Stock Exchange over a listing fraud.

Lessons indeed for Sri Lanka but reforming society itself to ring in these changes, is a major challenge.