8 Jan 2018 Posted in Parliamentary speeches and responses
Ms Sylvia Lim (Aljunied GRC)
Mr Pritam Singh (Aljunied GRC)
Mr Png Eng Huat (Hougang SMC)
Ms Sylvia Lim: To ask the Minister for Law (a) whether the penalty of US$422 million to be paid by Keppel Offshore & Marine Ltd for corrupt payments between 2001 to 2014 to officials of Petroleo Brasileiro SA and Brazil’s then ruling party was part of a three-nation plea bargain agreement, involving United States, Brazil and Singapore, and Keppel companies; and (b) what are the considerations in reaching such arrangements, which have implications on local law enforcement and prosecutorial decisions.
Mr Pritam Singh: To ask the Minister for Law in respect of Keppel Offshore and Marine’s (KOM) agreement to pay a US$422 million fine as part of a three-nation corruption probe settlement (a) whether the US Department of Justice’s (DoJ) Deferred Prosecution Agreement on the KOM corruption probe settlement, or any other agreement, includes any condition that prevents the public disclosure of the identities of the Singaporeans who are involved; and (b) when does the Government expect the CPIB and AGC to formally complete investigations and to charge the individuals in question in view of the criminal findings made against KOM by the US DoJ.
Mr Png Eng Huat: To ask the Minister for Law (a) how much more time will the Corrupt Practices Investigation Bureau (CPIB) need to complete the investigations in respect of the Singaporeans involved in the Keppel Offshore & Marine (KOM) corruption case since KOM and its wholly-owned US subsidiary, KOM USA, have agreed to pay more than US$422 million in penalty to resolve corruption charges of paying about US$55 million in bribes to secure contracts; and (b) how far back in time will CPIB go to in its investigation into the Singaporeans involved since the corrupt activities were committed as early as 2001.
Mr Pritam Singh: To ask the Minister for Law (a) how many Singapore Government-Linked Companies (GLCs) or their subsidiaries locally or overseas have been investigated or continue to be investigated by local or overseas authorities for corrupt practices over the last 30 years; and (b) what role do the Ministry and Temasek Holdings play to ensure that GLCs or their subsidiaries do not engage in corrupt practices when conducting business overseas.
- As a country and as a Government, we do not condone or tolerate corruption. This has always been our position. It will continue to be so.
- Domestically –
- Corruption cases are investigated by the Corrupt Practices Investigations Bureau. The CPIB can investigate anyone.
- Thereafter cases are assessed by the Public Prosecutor, who acts independently.
- Incorruptibility is a foundational value for Singapore. We must keep Singapore clean.
- Internationally –
- We know that there are many places in the world where corruption is endemic and the business environment is very different from Singapore.
- We cannot be a global policeman. Singapore companies have to operate in all kinds of environments. But as a matter of principle, we expect that they must do so while keeping their systems clean, and complying with the laws of the countries where they operate. They must develop ways of operating which enable them to do this. They cannot lower their own standards of integrity, and they must not bring back to Singapore practices alien to the norms which we have established with such great effort here.
- Let me now address the questions asked.
- How we handle allegations of corrupt acts overseas by Singaporeans or Singapore companies depend on a number of factors, including:
- Whether the case is connected more strongly to Singapore, or to other countries;
- Any practical or legal difficulty in investigating the case, bearing in mind that the evidence will mainly be overseas;
- Any actions being taken by third countries, and the legal and regulatory tools they are bringing to bear;
- Any cooperative mechanisms between Singapore and the other countries involved.
International resolution of KOM case
- In handling the Keppel Offshore Marine (KOM) case, the authorities in the US, Singapore and Brazil worked with each other and reached an agreed approach. There was no “three-nation plea bargain agreement”, as Ms Lim puts it. What happened was that each jurisdiction acted under its own domestic laws, but in coordination with the other two jurisdictions.
Deferred prosecution agreement (US)
- In the US, the Department of Justice (DOJ) entered into a deferred prosecution agreement (DPA) with KOM.
- This is an agreement under US law, between KOM and the DOJ.
- Under the DPA, KOM has to pay a penalty of US$422 million. The amount was determined in accordance with US sentencing guidelines. The DPA, which has been published, sets out how the amount was arrived at. Among other things, KOM was given maximum credit for its full cooperation with investigations.
- Out of the US$422 million, 50% would be paid to Brazil, 25% to the US, and 12.5% to Singapore. The last 12.5% is payable to Singapore, but subject to any further penalties the Brazilian authorities may impose.
Leniency agreement (Brazil)
- In Brazil, the Federal Public Ministry entered into a leniency agreement on similar terms to the US DPA.
Conditional warning (Singapore)
- In Singapore, the Public Prosecutor directed CPIB to administer a conditional warning on KOM. In reaching this decision, the Public Prosecutor considered the following factors:
- That KOM had voluntarily reported its internal findings to CPIB and AGC in September 2016, and had cooperated with all three jurisdictions in the investigation and resolution process.
- That KOM also indicated that it will voluntarily agree to the US DPA and the Brazilian leniency agreement.
- That the key elements of this case, in particular the recipients of the bribes and the projects connected with the bribes, occurred outside Singapore, and the jurisdictions concerned are also acting against KOM, in coordination with Singapore.
- A conditional warning allows Singapore to impose on KOM conditions that are closely aligned to the terms of the US DPA.
- If any of the conditions are breached, KOM can be prosecuted.
- The aligned approach results in a robust resolution to KOM’s case.
- The trilateral resolution requires KOM to pay a total of US$422 million. If KOM fails to pay the penalty, there will be consequences under US, Singapore and Brazilian law. Of the US$422 million, KOM must pay US$52 million to the Singapore Government within 90 days. Another sum of up to US$52 million must be paid to the Singapore Government within 3 years from the date of the conditional warning, after taking into account any further sums to be paid by KOM to Brazilian authorities.
- Any penalty or claim that KOM might be subject to under Singapore law would be far less than what KOM is now liable for under the coordinated resolution.
- Furthermore, KOM is also required under the US DPA to strengthen its internal controls and compliance and anti-corruption programmes.
- The current resolution therefore achieves more than what we would have been able to do if we had proceeded against the company solely under the PCA.
Investigations re: individuals
- Mr Pritam Singh and Mr Png Eng Huat asked about the action to be taken against the individuals concerned.
- As AGC has stated, investigations into the individuals concerned are ongoing. The Singapore investigations are conducted on the same timeframe as the US and Brazilian investigations, and go back to 2001, when the corrupt acts first took place.
- There is no agreement, whether in the DPA or otherwise, which prevents the disclosure of the individuals under investigation.
- However, for criminal investigations, it is standard practice in Singapore, and in many other jurisdictions, not to identify individuals under investigation. This is for the simple reason that investigations can lead to the conclusion that no offence is made out, or that prosecution is unwarranted, in which case disclosure would have been prejudicial to the individual concerned. Individuals will be identified if and when charges are preferred in Court.
- As for the investigations timetable, this is not a case where CPIB and AGC are acting alone in a domestic case. This is an international case where many different investigating agencies are involved.
- The case involves many projects in Brazil and goes back many years to 2001. Most of the evidence, including documents and witnesses, are located in different jurisdictions, including Brazil and the US.
- Legal proceedings have also taken place in these jurisdictions. AGC needs evidence from these jurisdictions, and it has sought assistance, and it is continuing to work with foreign authorities. AGC has asked for certain information from them and some of its requests are still pending. AGC anticipates that further requests will have to be made as the investigations develop.
- AGC is also working on a request for Mutual Legal Assistance. This is a procedure whereby one country formally seeks assistance from another to obtain or secure evidence for use in its own investigations and proceedings. This request will be reviewed and administered by the courts of the foreign country. How quickly and to what extent these requests and applications will be processed is a matter for the jurisdiction to which the request is made. Likewise, any incoming requests from foreign jurisdictions would also have to be considered and acted upon.
- Obviously the intention is to move as expeditiously as possible. However, as I have explained, not all aspects of the investigation are within our control.
- Only after the investigations are completed can the AGC properly assess the case and decide on the appropriate response. This is something for the Public Prosecutor to decide, independently.
- How the Public Prosecutor decides will depend on several factors, including the culpability of each individual, the available evidence and what is appropriate in the circumstances.
- For example, it will be important to determine, for each individual: what he knew; the extent of his involvement; his motivations; any personal benefit he obtained; the circumstances under which the relevant acts took place; and any cooperation rendered.
Disclosure of investigations
- Mr Pritam Singh asked for statistics on concluded or ongoing investigations into corrupt practices by Government-linked companies by overseas and local authorities.
- I cannot speak for what foreign jurisdictions may be doing.
- Insofar as Singapore is concerned, past investigations which have resulted in prosecutions are a matter of public record. We do not comment on ongoing investigations, if any, for good reason: so as not to jeopardise the investigations or prejudice individuals or companies if it turns out that no offence is disclosed.
- Suffice to say, if there is good reason to investigate, the authorities will do so, whether or not the company is a Government-linked company.
- For example, from 2014 to 2017, 7 former ST Marine officers were investigated and subsequently charged and convicted for giving corrupt payments to secure business, and for other offences under the Penal Code.
Government and Temasek as shareholders
- Government and Temasek as shareholders
- The Government’s relationship with Temasek Holdings is that of a shareholder. Temasek is likewise a shareholder of Keppel Corporation, with a minority stake of about 20%.
- The Government does not interfere in, nor influence the business decisions or operations of Temasek or its portfolio companies. Likewise, Temasek does not interfere in the business decisions or operations of its portfolio companies. These are the responsibilities of the respective companies’ boards and management.
- Temasek holds the boards of its portfolio companies responsible for running the companies honestly and competently. If the boards do not perform, Temasek can, collectively with other shareholders, change the board.
- To reiterate, the Government expects all Singapore companies, their officers and their employees to comply fully with the laws of Singapore and the laws of the jurisdictions in which they operate. They have to find ways to keep their own systems clean even when doing business in complex and challenging environments. Above all, they must not import corrupt practices into Singapore.
Last updated on 08 Jan 2018