Report No. 258
E. Clause 4
Analysis and comment:
5.5.1 Clause 4(1) may be retained as it is. However, there are several concerns with the remainder of the provision.
5.5.2 In the first place, the proviso to clause 4(1) seeks to carve out defences/exceptions to an offence under clause 4(1). Therefore, it should not be in the form of a proviso, but should be a substantive provision in its own right.
5.5.3 The proviso is drafted to suggest that this defence/exception is only available to a commercial organisation and not to any person generally. That is not a desired position, and in fact, this defence/exception should apply to every "person", the meaning of which term includes a commercial organisation.
5.5.4 Further, the proviso, in being attached to clause 4(1), also suggests that the defence/exception is applicable only to an offence under clause 4, whereas it ought to be a general defence/exception for all offences under this law, including the abetment or attempt of any such offence.
5.5.5 Expressions such as "adequate procedures" used in the proviso to clause 4(1), and "guidelines" used in clause 4(2), appear to have been borrowed from the scheme recommended by the Commission in its 254th Report43 on the Prevention of Corruption (Amendment) Bill, 2013 ("the 2013 Bill"). As per the proviso to clause 8 of the 2013 Bill, where an offence relating to bribing a public servant has been committed by a commercial organisation, such commercial organisation is punishable with a fine.
Clause 9 of the 2013 Bill further provides that a commercial organisation may also be guilty and punishable with fine, if any person associated with the commercial organisation offers, promises or gives an undue advantage to a public servant. However, when such an associated person is guilty, the commercial organisation may not be liable if it can prove that it had in place adequate procedures designed to prevent persons associated with it from undertaking such conduct.
Clause 10 of the 2013 Bill further provides that where an offence is proved to have been committed with the consent or connivance of any director, manager, secretary or other officer of the commercial organisation, such officer shall also be guilty of the offence, punishable with imprisonment and fine. Clause 9(5) of the 2013 Bill additionally requires the Central Government to prescribe guidelines about adequate procedures that can be adopted by commercial organisations in connection with preventing such bribery.
43 254th Report, p. 35.
5.5.6 Merely transferring selected provisions from this scheme recommended by the Commission for the 2013 Bill will not be workable in this case in the 2015 Bill, unless the entire scheme of the 2013 Bill is fully incorporated in the present 2015 Bill. In fact, in the existing draft contained in clause 4 of the 2015 Bill, it would mean that a commercial organisation would be free from liability merely by showing that adequate procedures were put in place. This would not be in compliance with the requirements of Article 16 of the UNCAC.
5.5.7 The Commission, therefore, recommends that the entire scheme as recommended in its 254th Report in connection with the Prevention of Corruption (Amendment) Bill, 2013, should be incorporated into the 2015 Bill as well. This is provided as a new clause 8 of the redrafted Bill.
5.5.8 The explanation in proviso (b) to clause 4(1) clarifying the expression "undue advantage" is unclear and not properly worded. Instead, it is recommended that the explanation be redrafted as a defence/exception.
5.5.9 A comprehensive list of defences/exceptions under this law must also necessarily include a provision for "routine government function", which will take into account payments made in the course of routine duties or functions of foreign public officials or officials of public international organisations for the purpose of issuing permits or licenses, processing official documents, and similar services. This defence/exception is available and acknowledged in most other jurisdictions, and a version of the same may be included here.
5.5.10 Accordingly, there should be a separate provision on defences/exceptions available against any offence listed in the law. This separate provision may be placed after all the offences are listed out. Based on the recommendations of the Commission regarding clause 5, this new provision on defences will appear as clause 7 of the redrafted Bill.
5.5.11 Suggested draft:
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