In a recent decision, the Singapore High Court (Court) has laid out guidelines for custodial sentences in cases of private corruption in Singapore. The Court rejected the suggestion that private corruption, unlike public sector corruption, would typically be punished by way of fine rather than a custodial sentence because fewer or different public interest factors were engaged.

Background

Syed Mostofa Romel worked for a marine surveyor, conducting inspections of vessels seeking to enter an oil terminal in Singapore. He was responsible for certifying that vessels had the correct documents, and ensuring that cargo was properly documented and that vessels were seaworthy and free from any highrisk defects. On three occasions Syed sought and was paid bribes to disregard high-risk observations during inspections of vessels that would otherwise have prevented the vessels from entering the oil terminal until the defects in the vessels had been rectified. His corruption was uncovered in a sting operation by the Corrupt Practices Investigation Bureau after a tip-off.

Syed pleaded guilty and was convicted on two counts of private corruption, with a third charge taken into consideration, under section 6(a) of the Prevention of Corruption Act (Cap. 241, 1993 Rev Ed) (PCA), which establishes offences where an “agent corruptly accepts or obtains, or agrees to accept or attempts to obtain, from any person, for himself or for any other person, any gratification as an inducement or reward for doing or forbearing to do, or for having done or forborne to do, any act in relation to his principal’s affairs or business, or for showing or forbearing to show favour or disfavour to any person in relation to his principal’s affairs or business”. He was sentenced to two months’ imprisonment for each offence to run concurrently. The prosecution appealed the sentences on the basis that they were manifestly inadequate.

Custodial sentences in cases of private corruption

On appeal (Public Prosecutor v Syed Mostofa Romel [2015] SGHC 117), the Court acknowledged that public sector corruption typically attracts a custodial sentence. The reasons for this are well established, including the preservation of the public interest and the public’s faith in the administration of government. However, the Court held that it was erroneous to presume that, conversely, private sector corruption should typically only attract the imposition of a fine without a custodial sentence.

The Court stressed that private sector corruption may attract a custodial sentence depending on the specific nature of the corruption, quite apart from whether it involved a public official. The Court stated, “It has been noted that where private sector corruption involves (a) a significant amount of gratification; (b) gratification which is received over a lengthy period of time; or (c) a compromise of one’s duty or a serious betrayal of trust, the starting point is likely to be a custodial sentence”.

Various factors would tend to militate in favour of a custodial sentence, such as the “public service rationale” (i.e. when a private sector actor takes on a quasipublic role in the performance of his duties); where the policy considerations and gravity of the offence as measured by the mischief or likely consequence of the corruption warrant it; the size of bribes; the number of people involved in the web of corruption; and the prevalence of the conduct.

The Court identified three broad categories of the ways in which private sector corruption may manifest itself:

  • Where the receiving party is paid to confer on the paying party a benefit that is within the receiving party’s power to confer, without regard to whether the paying party ought to have properly received that benefit.
  • Where the receiving party is paid to forbear from performing what he is duty-bound to do, thereby conferring a benefit on the paying party.
  • Where a receiving party is paid so that he will forbear from inflicting harm on the paying party, even though there may be no lawful basis for the infliction of such harm.

In the first category, whether the custodial threshold is crossed will depend on the facts. In the second category, the receiving party typically turns a blind eye and slackens in his inspections to any deficiencies in the paying party’s goods or work. This will usually attract custodial sentences. The third category is where a paying party does not seek a favour, but will be deprived of a legitimate right should he decide not to pay the receiving party. This third kind of corruption was held to be “antithetical to everything that Singapore stands for” and “destroys the notion that business in Singapore is clean and transparent”. The Court held that such corruption will be severely dealt with and will almost always attract a custodial sentence.

Conclusion

On the facts, the Court found Syed’s offences sufficiently grave to allow the prosecution’s appeal and impose a six-month custodial sentence for each offence to run concurrently. The Court was especially concerned at four aggravating factors warranting an extended sentence. First, the offending acts were carried out over a period of three months and involved a sum totalling US$7,200. Second, a potential loss of confidence in the maritime industry, given its strategic importance as accounting for up to 7% of Singapore’s gross domestic product and providing 170,000 jobs, could lead to considerable economic ramifications if corruption were allowed to take root. Third, the safety of the terminal as well as that of the workers at the terminal was compromised. Fourth, the acts were premeditated and deliberate.

Whilst instances of corruption in the public sphere have made front pages of the news in recent years, this judgment serves as a reminder that Singapore’s zero tolerance policy towards corruption applies equally to instances of private corruption.