Examination of Witness (Questions 140-159)|
20 MAY 2003
Q140 Baroness Whitaker: Are you familiar,
Mr McKittrick, with the concept of approved codes of practice?
You have probably come across it in Health and Safety at Work
or construction regulations where the code is fixed into the law
so that it really is heavy guidance and if you do not follow the
guidance, you are prima facie in breach of the law. Do
you think that could have any place, say, in setting out how to
deal with commissions, corporate hospitality, that kind of thing?
Mr McKittrick: I think where it
would come in is with one of the issues we touched on last week
at the meeting we had. We all like to be quality-assured and to
get the stamp. We all like to be approved as Investors in People.
Maybe one way through this is to have companies that are registered
as clean because I always say that there is only one thing worse
than not being quality-assured, and that is being quality-assured,
but slipping up and losing your qualification. If we were able
to get some sort of stamp that companies were clean, and woe betide
you if you lost it because having that would say you were clean,
something of that nature, I think, might help.
Q141 Baroness Whitaker: Do you see
that as government-accredited or by your own professional institution?
Mr McKittrick: There are so many
professional institutions in construction, in aeronautics, in
the military, in armaments, across the whole spectrum, I think
it would need to be national government-led in some way.
Q142 Chairman: But leaving aside
the Bill and how effective that is, what can industry do about
this, or are you a lone ranger here? Are there a lot of other
people campaigning against this sort of thing?
Mr McKittrick: Well, up until
a few weeks ago my head was above the parapet and now my whole
body is above the parapet. There are many people with whom I speak
who say, "Don't be ridiculous. You can't stop this. It is
endemic". There are many who say that it is endemic and it
happens because governments overseas do not pay adequate salaries.
Well, start paying bigger salaries. Start doing things which prevent
corruption. The big issue is that all of the aid agencies now
link their funding to poverty alleviation and 15 to 20 per cent
of the money going into these jobs is getting ripped out by scurrilous
people and we are not dealing with nearly as much poverty as we
should be through aid work.
Q143 Lord Campbell-Savours: In your
brief, you say, "I have invited the presidents and secretaries
from 23 major professional institutions".
Mr McKittrick: Correct.
Q144 Lord Campbell-Savours: "All
have expressed an interest, but in the event most have been unable
to attend". Are they sending you a message?
Mr McKittrick: Yes.
Q145 Lord Campbell-Savours: What
Mr McKittrick: One was or I thought
one was sending a message, the biggest institution which has got
79,000 members, of which I happen to be a Fellow as well a Fellow
of the Institute of Structural Engineers, who were meeting yesterday
and they now understand, they are highly embarrassed and they
are going to attend the next meeting. It is slowly, slowly, catchy
monkey, I think. I think we have just got to keep working away
at it and keep convincing people and those who do not want to
be convinced will be the outsiders, and that is the way I think
we can probably move forward, but this is only construction, only
a very small part.
Q146 Lord Campbell-Savours: Your
efforts are most laudable, but let's take what happens in China.
We know that public officials earn less than the average taxi
driver or man on the local market, running major organisations.
I am just testing this and I would like to see what the answer
is. In the real world, people are going out to countries like
that and the only way they can attract the people who are getting
only £5 or £10 a week is if they make up their salary
on the basis of these sorts of commissions. Do you not find it
very difficult to argue with the contractor who then says, "Look,
we are faced with real world conditions and we have got to respond
in some way"?
Mr McKittrick: Yes, I do find
it difficult and in my own business we have two very major joint
ventures with Chinese local authorities. We work with Chinese
companies. I have worked in Hong Kong for seven years and I know
it fairly well. The Hong Kong Government had a body called ICAC,
the Independent Commissioner Against Corruption, commonly known
as "interfering with Chinese ancient customs"! That
actually worked pretty well. That was a tight-knit society, five
million people, all started through police corruption. They got
it by the scruff of the neck and there were very heavy penalties.
I had some staff in Hong Kong
Q147 Lord Campbell-Savours: Where
salaries are on a completely different scale altogether in the
Mr McKittrick: They were not quite
as different as you are saying. Some of the people who went down
for corruption were inspectors who were pretty poorly paid people.
China, yes, is a different kettle of fish. There are some very
low-paid people relative to our standards, but not that low-paid
relative to their own standards, but there are differences and
one will never actually make a lot of money in China by putting
ex-pats in. You have got to work with the Chinese and you have
got to "Chinafy" your business there, otherwise you
do not make it at all, so I do not think it is quite that desperate.
Q148 Lord Campbell-Savours: Well,
we are talking about a country with 1.2 billion people, with gross
under-payment in the public sector, and where, as I understand
it, in many parts in China people in the public sector believe
that this is the only way they can be remunerated. I am not saying
it is right, but I am just saying that when these businessmen
do not turn up at your conference, maybe they have got these conditions
Mr McKittrick: It is not only
China, it is Pakistan, it is Sri Lanka, lots of the Asia-Pacific
region, and south-east Asia is in exactly the same situation.
Yes, I agree with what you are saying, but I do not condone it,
and I am assuming that if we are hoping to bring in a law, if
there are business people in this country bribing overseas officials,
we will actually be able to do something about it.
Q149 Lord Campbell-Savours: But maybe
the solution then is perhaps, and I just put it to you here, that
it is a rising standard of living in these countries and in the
public sector we are more likely to do away with these sorts of
problems than perhaps by way of the approach that you are adopting.
I just put that to you.
Mr McKittrick: You may be right.
In other words, we keep trying to raise the standards and allow
it to happen until the standards are raised adequately that corruption
Q150 Chairman: In this country if
an employer or a managing director of a company discovers that
someone has taken a bribe in his employment, what does he do about
Mr McKittrick: If he discovers
that somebody within his own company has taken a bribe, it would
be immediate dismissal, certainly in my own company.
Q151 Mr Oaten: Have you ever done
Mr McKittrick: We have not. It
has happened once while I was working in Hong Kong to a member
of staff who, we know, solicited a bribe from a contractor and
he was immediately paid off.
Q152 Chairman: But are you aware
of other companies who would sack somebody who had taken a bribe
or does this just not happen?
Mr McKittrick: I am not aware
of any of late. Bribery in the UK has come to the surface and
been squashed. "Donnygate" seemed to sort itself out
and lots of people went under, the Doncaster bribery issues. In
my own company, I lost £70,000 to a person who worked in
Doncaster who, it turned out, was corrupt. We have worked for
directors of development companies who have had disqualification
for seven years as directors because of corruption with English
Partnerships. Yes, there are cases, but they are pretty few and
Q153 Mr Garnier: I want later to
talk about offsets, but do you think that planning gain is a form
of corruption in this country, builders being required to build
a primary school in exchange for being given planning permission?
Mr McKittrick: Well, one can say
that government, both central and local, is actually corrupt itself
in planning gain because by insisting in many cases that the developer
puts in huge amounts of infrastructure, far in excess of what
is needed for that particular development, it could be said that
government and local government themselves are being corrupt.
Q154 Mr Garnier: Do you think that
the Bill will deal with that or the law of England and Wales will
deal with that?
Mr McKittrick: I think you can
try and draft a Bill which is so wide that it becomes unwieldy
that you never succeed.
Q155 Mr Garnier: Do you think that
the fact that it is done in the open and on the record sucks the
evil out of the transaction?
Mr McKittrick: I think it depends
again. Planning gain is a pretty important one because of course
if by planning gain you manage to employ more people and pay them
better and they have then a better lifestyle through it, it becomes
difficult to decide then whether it is really corruption or not.
Q156 Mr Garnier: Do you take a different
view of someone in an overseas contract taking US$50,000 for doing
a deal and keeping that quiet compared to everybody knowing that
the contract manager in the Chinese organisation is on the take
and that is effectively in the open? Is corruption only wrong
when it is secret or is it wrong as a matter of principle?
Mr McKittrick: It has to be wrong
as a matter of principle, it has to be. I do not think one can
say that because it is open, it is okay and can be condoned.
Q157 Chairman: I get the impression,
like you said earlier, that perhaps the atmosphere is such that
employers do not want to do anything about it or do not do anything
about it, except that you say that your company would stop it.
However, across the board is the attitude a laissez-faire
attitude or are employers keen to stamp this out?
Mr McKittrick: I think there is
currently an appetite for doing something about it.
Q158 Lord Carlisle of Bucklow: Can
I come in on the practicality of this. Accepting entirely the
stance that you take and respecting the stance that you take,
without international agreement, how is it achieved? Let's go
back to your original example where you go for a contract in India
which is being financed by the World Bank. You use a sub-consultant
who openly tells you, publicly, that he can get you that contract,
but 10 per cent of that contract is going to go into the pocket
of an individual. Presumably, under this Bill, if you are on a
telephone in this country and you say yes, you are committing
an offence of corruption
Mr McKittrick: Agreed.
Q159 Lord Carlisle of Bucklow: because
you are attempting to agree to confer an advantage.
Mr McKittrick: Yes.