Bribery of a public official

Thursday 13 July, 2017

The high profile prosecution of a former public official and a private roading contractor in R v Borlase and Noone [2016] NZHC 2970 raises interesting issues as to what constitutes acceptable gifts, entertainment and hospitality when engaging with the public sector in the context of New Zealand’s bribery and corruption laws.

A “bribe” is defined in morally neutral terms as “any money, valuable consideration, office, or employment or any benefit, whether direct or indirect” under the Crimes Act 1961 (“Act”).

The giving of the bribe becomes a crime if the bribe is “corruptly” given to an official with the “intent to influence [the] official in respect of any act or omission by the official in his or her official capacity”.

Surprisingly, the case law does not rely on a detailed analysis of whether the action is independently “corrupt”.  It is sufficient that the bribe was provided with the “intent to influence”, as demonstrated in the 2011 Supreme Court decision of Field v R [2011] NZSC 129.   

“Intent to influence” does not require that the official be actually influenced, nor does it require an intent to influence the official to act in a dishonest, unlawful or immoral way (R v Borlase and Noone).

There is a defence to the charge of unlawful bribery for “gifts of token value which are just part of the usual courtesies of life” (Field v R).

In practice, local government and central government departments usually treat gifts and benefits that have a value of NZD$20 or less to be of “nominal” value and do not usually require disclosure in accordance with departmental gift acceptance policy.

Some practical observations

Set out below are some practical observations about New Zealand bribery and corruption laws:

1. You should know bribery and corruption when you see it.
   
   
2. The course of conduct is relevant; not just any single event.  Context is everything.
   
   
3. You will be judged with hindsight (ie looking back over the course of conduct compared against the decisions of the relevant officials).
   
   
4. The greater the connection between the “benefit” provided and the official’s work role, the less likely it is that the “benefit” would be seen as an improper personal benefit to the official.  This was recognised in R v Borlase and Noone with respect to the provision of conference or “corporate-related benefits” and the provision of personal travel and accommodation.  In the context of the evidence given, the Court did not reject arguments that the provision of conference or “corporate-related benefits” can in some cases be given without an “intent to influence” as such benefits are commonly provided to build relationships and encourage collaboration between the entity giving the benefit and the receiving official.  However, on the facts, the provision of personal travel and accommodation to the official was found to be wholly inappropriate and provided with an “intent to influence” as there were no other plausible explanation for their provision.
   
   
5. In practice, the risks would be lower if the (local or central) government has fully complied with its gift acceptance policy and approved the benefit.  However this does not completely dispose of the risk, especially in relation to the course of dealing and hindsight analysis issues.
   
   
6. The more openly and widely shared the invitation or benefit is communicated, the less likely it will be seen as “corrupt”.
   
   
7. The approving manager with the (local or central) government should ideally be outside of the immediate group or team that is being offered the benefit (ie the approval of a person’s direct manger may not be sufficient if (with hindsight) the whole group or team was compromised).
   
   
8. There is less risk if the benefit goes to a person who is not making the relevant decision.
   
   
9. The complaint can come from anywhere, but is likely to come from a losing competitor, an internal whistleblower or from an audit.
   
   
10. If an allegation becomes public (even if it ends up having no substance) the reputational fall-out can be extensive and not limited to the New Zealand market.

Other anti-corruption laws are contained in the Secret Commissions Act 1910 and the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.