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Published: 00:56, June 16, 2022 | Updated: 10:11, June 16, 2022
Hong Kong's anti-corruption drive gains pace since handover
By Tony Kwok
Published:00:56, June 16, 2022 Updated:10:11, June 16, 2022 By Tony Kwok

Many people take the view that the establishment of the Independent Commission Against Corruption (ICAC) is one of the best gifts bestowed upon the Hong Kong Special Administrative Region by the British colonial government.

This statement has more than a grain of truth but it’s not totally correct either. It should be pointed out that out of the 155 years of British colonial rule, corruption seeped through every nook and cranny of Hong Kong society for at least 130 of those years, its corrupt tentacles finally arrested in the last 20 years.

There were plenty of corruption scandals in the colonial days. The first one occurred shortly after the First Opium War, when Hong Kong was ceded to Britain under an unequal treaty in 1842. It was the “Caldwell Scandal”, named after a Briton called Daniel Caldwell, who came to Hong Kong and married a Chinese woman from whom he learned to speak Cantonese. This gave him a huge advantage, being part of the colonial establishment and able to speak the local language at the time. He first got a job as court translator and quickly worked his way up to eventually become a very senior colonial official, the director of Chinese affairs, roughly equivalent to the current director of home affairs. But he was very corrupt, and said to be a close associate of an American pirate named Eli Boggs and gave him protection. He also secretly ran brothels, opium dens and gambling houses around the Central district, the current Lan Kwai Fong area. At one time he owned 34 land lots in Central, and if all these properties were kept by his family nowadays, they would be among the richest families in Hong Kong!

What happened was that his corruption was reported to London, which in turn ordered the then-governor to take action. But instead of being prosecuted in open court, Caldwell was dealt with by an internal commission of enquiry, with members appointed among his Freemason friends. Although the corruption allegations were substantiated, he was only dismissed without any further penalty or confiscation of corrupt assets. That showed the law enforcement double standards at the time — one for the British and another for the Chinese! He and his wife were even ceremoniously buried in the Happy Valley cemetery reserved for VIPs. What was most scandalous was that those senior officials believed to be close corrupt collaborators were subsequently honored with names of streets in Hong Kong, including Caine Road for William Caine, the then-deputy governor; Johnston Road for Alexander Johnston, the then-acting administrator; Bridge Street for William Bridge, the then-acting chief secretary; and Hillier Street for Charles Hillier, the then-chief magistrate! Undoubtedly, the corruption in Hong Kong was inherited from Britain at the start!

Another pertinent question to ask is, should we credit Governor Murray MacLehose for establishing the ICAC? I fear there is no clear-cut answer if all known facts are taken into consideration. When MacLehose arrived in Hong Kong to take up his appointment in 1971, Jack Cater, then the director of commerce and industry, briefed him on the prevalence of corruption in Hong Kong and urged him to take strong action. MacLehose categorically refused, and Cater was so disappointed that he decided to seek retirement from the civil service. Indeed, MacLehose did absolutely nothing to counter the then-rampant and open corruption in the society for two years until the “Godber scandal” broke in 1973, prompting an unprecedented massive public protest. It was clearly due to public pressure that MacLehose eventually decided to set up the ICAC, to save the colonial government from collapse. According to Lady Cater, MacLehose then “begged” Cater to take up the post of the first commissioner of the ICAC.

On whether MacLehose was committed to fighting corruption, it is pertinent to consider his quick decision to declare a partial amnesty in 1977 in response to police protests. While the amnesty decision itself cannot be faulted in view of the immediate security crisis posed at the time by the “police mutiny”, the amnesty conditions were clearly too generous — all corrupt offenses committed before Nov 1, 1977, would be unconditionally pardoned, unless the governor considered the cases to be sufficiently heinous. It was understood that the ICAC’s proposal then was that amnesty should only be offered for those corrupt offenses committed before the establishment of the ICAC in 1974. If anyone dared to continue their corrupt activities after the ICAC was established, why should they be treated with leniency? But MacLehose refused to accept the ICAC’s recommendations and opted for much more generous amnesty terms, thereby allowing many corrupt officers to get off scot-free. As to those heinous offenses that can only be investigated with the governor’s special permission, MacLehose only approved one, in the “26 housing block case”. It’s therefore anyone’s guess how genuinely committed MacLehose was in supporting the fight against corruption in Hong Kong.

The real hero who saved the day in the ICAC’s crusade against corruption is Sir Jack Cater, leading his team of indomitable dedicated ICAC officers, comprising young and energetic local officers, and experienced expatriate police officers recruited from Britain who were imbued with a strong sense of mission, which ultimately won the uphill battle in its “Mission: Impossible” of turning Hong Kong from one of the most corrupt places on earth to one of the most corruption-free!

One of the most valuable contributions of the ICAC to Hong Kong is the catalytic effects of its work. As a result of protracted investigations on a number of corruption-related bank frauds in the ’80s, such as the Overseas Trust Bank case, the Bank Bumiputra (Carrian) Case, etc., the inadequacy of government regulatory function over financial institutions was exposed. This resulted in the establishment of the Hong Kong Monetary Authority. Because of the ICAC’s prosecution of the then-chairman of the Hong Kong Stock Exchange and the chairman of the Hong Kong Futures Exchange, both institutions were reorganized and upgraded to world standards. Subsequently, another watchdog was established, the Securities and Futures Commission. All these regulatory bodies paved the way for Hong Kong to become the respected international financial center that it is today.

After Hong Kong’s return to China, and contrary to the dire predictions of the last governor, Chris Patten, the ICAC has gone from strength to strength with further significant achievements. According to the Transparency International Corruption Perception Index’s latest ranking in 2021, Hong Kong was ranked No 12 in the world, above jurisdictions like Canada (13); Australia and Japan (18), France (22), and the US (27). How can the US and its Western allies criticize our rule of law when their state of corruption was perceived to be worse than Hong Kong’s!

The beginning of this year marks a new milestone for Hong Kong’s anti-corruption work. The commissioner of the ICAC, Simon Peh Yun-lu, was elected the president of the International Association of Anti-Corruption Authorities (IAACA). The IAACA was founded in 2006 as the international institution for anti-corruption agencies worldwide, similar to Interpol. Over 140 countries’ or regions’ anti-corruption authorities have participated as members.

I had actually mooted the idea of establishing an international organization for anti-corruption agencies at the ICAC International Symposium in 2000. So, it is most gratifying to see this practical suggestion coming to fruition.

Looking forward, there is no doubt the ICAC will continue to function effectively in keeping corruption in Hong Kong under control, thereby helping attract foreign investment as per our slogan: “The competitive advantage of Hong Kong is the ICAC — ensuring a level playing field.”

Where ICAC can achieve more is in its contribution to the world’s fight against corruption. Unfortunately, corruption is still a major challenge to most parts of the world. According to international studies and surveys, the world has made little or no progress in tackling corruption in the last decade. What makes the situation even more pressing for action is that there are only eight years remaining for us to attain the United Nations’ Sustainable Development Goal 16.5 to “substantially reduce corruption and bribery in all their forms” by 2030.

On this challenge, the ICAC’s presidency of the IAACA can act as an important international focal point for anti-corruption authorities around the world to strengthen experience sharing and mutual exchange. At the same time, the ICAC can also contribute to the development of the Guangdong-Hong Kong-Macao Greater Bay Area by promoting the highest level of public integrity in the region, to make it a competitive advantage in attracting foreign investment.

To kill two birds with one stone, the ICAC can consider setting up an IAACA Academy in one of the cities in the GBA, to provide international anti-corruption training as well as local training for the GBA. Many Hong Kong universities are now building campuses in the GBA. Ideally the academy can be sited near any of these university campuses, so as to share the campus facilities, and save infrastructure cost.

The ICAC can also take advantage of the presidency to establish a permanent IAACA Secretariat in Hong Kong, similar to the Interpol Secretariat, located permanently in Lyon, France. This would, in the long term, enable the members to be better served as the focal point of international anti-corruption collaboration, and to enable Hong Kong to take center stage in advancing the international anti-corruption mission.

All these require additional public funding, but it would be money well spent considering the multiple local and international benefits we can expect from this bold commitment. Let us hope that the ICAC resources application is duly supported by the Finance Committee taking a macro view of the wider interest of Hong Kong, the GBA and the world.

The author is an adjunct professor of HKU Space and former deputy commissioner of the ICAC. He has just received the Cressey Lifetime Distinguished Award from the International Association of Certified Fraud Examiners.

The views do not necessarily reflect those of China Daily.  

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