Joint Committee on The Draft Corruption Bill Minutes of Evidence

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 is it?

  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 public sector.

  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 in mind.

  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 disappears.

  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 it?

  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 that?

  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 far between.

  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.

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