Legislative Council Panel on Security

Corruption Reports in the First Six Months of 1998


This paper sets out the number of corruption reports received during the first six months of 1998 compared with the same period in 1997. It also describes the preventive and educational efforts being undertaken by the ICAC.

Corruption Reports 2. Compared to the same period in 1997, the first half of 1998 saw corruption reports (excluding elections) increase by 24% , from 1,435 to 1,780. A breakdown of the increase is as follows : -一

  • up 24% for the private sector, from 735 to 909;

  • up 22% for government departments, from 608 to 743; and

  • up 39% for public bodies, from 92 to 128.

Details of the reports are provided at the Annex to this paper.

3. In addition, 136 reports were received in the first half of 1998 in connection with the 1998 Legislative Council Election.

4. ICAC intelligence suggests no sign of a resurgence of corruption syndicates. The increase in corruption reports does not imply a corresponding increase in corrupt activities. While we would not rule out an increase in corruption, our analysis suggests the following factors account for the higher number of reports : -

  • State of the economy
    The increase in reports involving the private sector was mainly registered against building management, trading, transport services, catering and entertainment services, and finance and insurance sectors, many of which are bearing the brunt of the current economic downturn. The financial difficulty encountered by some of the companies concerned have exposed other problems, including possible corruption.

  • Public confidence in the ICAC
    It is clear that the public are more willing to make corruption reports to the ICAC. The number of reports made in person increased by 55%, from 318 to 492 cases. Moreover publicity associated with a few high profile cases has attracted more reports in related areas. For example, following the 弎ribes-for-promotion�case in the Police and an investigation regarding alleged police protection of vice rackets, the first six months of 1998 saw reports against the Police rise to 295 compared to 243 in the same period last year. At the same time, complaints against Customs and Excise were also up from 17 to 41 cases in the wake of two major ICAC operations concerning the manufacturing of pirated Video Compact Discs.

  • Proactive approach
    The proactive effort by the ICAC to uncover corruption has yielded result. This approach involves stepping up the collection and analysis of intelligence, and enhanced liaison with government departments, public bodies and major organisations to encourage referrals. In the first six months, 125 reports were generated by our own intelligence, a two-fold increase from the 63 recorded in the first half of last year. Referrals from government departments went up from 68 to 101 cases. This indicated a higher degree of management awareness on the need to report suspected cases of corruption.

ICAC strategy

5. Our integrated approach of combating corruption through investigation, prevention and education remains effective. We will ensure that we would have the investigative capability to deal with any increase in corruption. In the light of the recent increase in corruption reports, we are studying corruption trends and fine-tuning our strategy to address specific areas of concern. We will sharpen our focus and direct resources to these areas.

6. High priority will be accorded to preventive efforts in disciplined services, Housing Department, Urban and Regional Services Departments and Lands Department. In the private sector, special attention will be directed towards small and medium size companies which engage in trading, transport and related services, catering and entertaining services as well as building management. The construction and financial sectors will also be our major concern in the light of a number of recent cases. As regards public bodies, our main focus will be on the telecommunications sector.

Investigator capability in investigation work

7. The restructuring of the Operations Department last year has enabled us to get an extra 48 front-line investigator. This has assisted us in coping with the increasing workload. We will enhance our proactive approach by widening our intelligence network and stepping up liaison with senior management of disciplined services through the high-level operational liaison groups. We will also enhance our professional training and investigative capabilities to ensure we maintain our edge over the corrupt.

Preventive and educational efforts

8. We adopt a target-based approach in identifying areas for both preventive and educational work. In the light of the pattern of corruption reports received in the first half of 1998 as set out at the Annex, the following areas will be our main targets -

  • The Civil Service
    As a follow-up to the Heads of Departments Seminar held in May this year, we will assist the Civil Service Bureau to review all existing circulars and instructions governing staff integrity to ensure that they adequately address present-day concerns. We will also approach senior management of government departments which have registered significant increase in corruption reports to impress upon them the need to reinforce staff training on integrity issues and assist them to put in place anti-corruption measures.

  • Public Bodies
    In the light of the significant increase in the number of complaints against the telecommunications industry, we will focus our efforts on the telecommunications industry. We have analysed all the complaints and are in the process of formulating corruption prevention advice for the industry, particularly in areas of safeguarding against unauthorised disclosure of subscribers�information. We will arrange educational talks for staff of telecommunications companies to explain to them the provisions of the Prevention of Bribery Ordinance and to promote ethical practices.

  • Financial Sector
    The recent economic turmoil and the collapse of a number of brokerage firms underscore the importance of upholding a high ethical standard amongst the practitioners of the financial sector. We will launch a multi-faceted education programme to promote professional ethics. This two-year programme will be kicked off by a conference to be held on 11 September 1998. Co-organizers include the Stock Exchange of Hong Kong, the Hong Kong Futures Exchange, the Securities and Futures Commission and other professional bodies.

  • Construction Sector
    We will discuss with the Buildings Department and the professional bodies concerned ways to improve supervision of construction sites to reduce corruption opportunities. A booklet and a pamphlet outlining corruption loopholes and providing preventive measures for the industry will be ready in early August. A series of visits to construction companies and sub-contractors will start in August. This will be followed by a seminar co-organized with the Hong Kong Construction Association in September this year.

  • Small and medium size companies
    Amongst the small and medium size companies, the more problematic sectors are building management, trading, transport services, catering and entertainment services sectors. To assist employers and employees in this sector to better understand the provisions of the Prevention of Bribery Ordinance and the consequences of corruption, we will approach these companies either individually or through their trade associations to offer our educational services. They will also be encouraged to make use of tailor-made advice offered by the Advisory Services Group of the Corruption Prevention Department to reinforce their internal control procedures.

    We are developing a series of Best Practice Packages to give corruption prevention advice on a number of work areas which are vulnerable to corrupt practices. These include tendering and purchasing procedures, stores management, security of computerised information, retail business practices, contracts for security and cleaning services, and staff administration matters. These user-friendly guidelines assist small and medium size companies, in particular those in the building management and trading sectors in preventing corruption.


9. The ICAC will continue to monitor closely corruption trends to ensure that timely action is taken. We will constantly assess and evaluate the effectiveness of our efforts and make sure that corruption is kept under control.

Independent Commission Against Corruption

25 July 1998