An overview of New Zealand law relating to bribery and corruption of members of Parliament and officials

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1 Office of the Clerk of the Houe of Repreentative Te Tari o te Manahautū o te Whare Māngai 9 September 2011 To: the Foreign Affair, Defence and Trade Select Committee An overview of New Zealand law relating to bribery and corruption of member of Parliament and official Thi overview of New Zealand law relating to bribery and corruption of member of Parliament and official i being provided in the context of a poible review by the committee of New Zealand relationhip with India. Summary of advice Crime Act The Crime Act contain five relevant offence. Three relate repectively to bribery of New Zealand Miniter of the Crown, member of Parliament, and official; and two relate to bribery of foreign public official by New Zealander. 2 Bribery of certain type of public official i the focu of thee offence proviion. Other form of corruption are not dealt with. New Zealand Miniter, member, and official 3 Under the three proviion relating to Miniter, member, and official both a peron who accept a bribe and a peron who offer or give a bribe i guilty of an offence. A bribe mean any money, valuable conideration, office, or employment, or any benefit, whether direct or indirect. 4 Accepting, offering, or giving a bribe i only criminal when it i done corruptly. 5 A bribe will be corruptly accepted by peron if, in accepting the bribe, the peron i knowingly outide the recognied bound of hi or her dutie a a Miniter, parliamentarian, or official. The recognied bound of a parliamentarian dutie have been held by the Court of Appeal to include acting in the public interet and with abolute honety.

2 2 6 Proof of dihonety or fraud or a corrupt bargain i not required. 7 The bribe mut relate to a Miniter, member, or official acting in their official capacity. 8 In ummary an offence i committed if: a bribe i offered, given, or accepted any of thee i done corruptly (which ha a low threhold) any of thee i done in repect of an act or omiion relating to a Miniter, member, or official acting in their official capacity Bribery of foreign public official by New Zealander 9 The two offence of bribery of foreign public official are aimed at New Zealander who offer or give bribe for the purpoe of obtaining or retaining buine or to obtain any improper advantage in the conduct of buine. Extra-territorial application 10 Some of the Crime Act offence exprely apply extra-territorially but other do not, or in the cae of bribery of foreign public official limit apply to thi. Secret Commiion Act The Secret Commiion Act contain a number of offence relating generally to agent which may apply to ome action of Miniter, member, or official. The penaltie under thi Act need to be reconidered. Dicuion The two Act relevant to bribery and corruption of member of Parliament and official, including in relation to act done outide of New Zealand, are the Crime Act 1961 and the Secret Commiion Act Thee are dicued in turn below. Crime Act 1961 Part 6 of the Crime Act contain 10 offence under the heading bribery and corruption. 1 Relevantly, three of thee relate repectively to bribery of New Zealand 1 Thee include four offence of bribery of a judicial officer ( 100 and 101), bribery of a law enforcement officer ( 104), corrupt ue of official information ( 105A), and ue or dicloure of

3 3 Miniter of the Crown, member of Parliament, and official; and two relate to bribery of foreign public official by New Zealander. Thee offence are et out in full in Appendix One. In ummary thee are: (Corruption and) bribery of a Miniter of the Crown ( 102) (Corruption and) bribery of a member of Parliament ( 103) (Corruption and) bribery of an official 2 ( 105) Bribery of a foreign public official ( 105C and 105D) The firt three offence proviion ue the word corruption in the ection heading, however the focu in each ection i on bribery. Other form of corruption are not dealt with in any of thee proviion. Bribery of Miniter, member of Parliament and official Under 102, 103 and 105 of the Crime Act both a peron who accept a bribe and a peron who offer or give a bribe i guilty of an offence. A bribe mean any money, valuable conideration, office, or employment, or any benefit, whether direct or indirect. 3 The fact that the ubject of the payment wa never exprely dicued by either party i not necearily fatal it i ufficient if there wa a tacit undertanding. 4 The element which need to be proved in any cae are: a bribe i offered, given, or accepted any of thee i done corruptly any of thee i done in repect of an act or omiion relating to a Miniter, member, or official acting in their official capacity In late 2010 the Court of Appeal conidered an appeal by Taito Phillip Han Field who had been convicted under 103 of the Crime Act of accepting a bribe a a member of Parliament. 5 The Court aid that the offence under 103 of acceptance of a bribe wa framed in value neutral term and wa only criminal when it wa done peronal information obtained a official information under 105A to obtain an advantage or pecuniary gain ( 105B). Thee offence are not conidered any further in thi paper. 2 An official i defined in 99 a any peron in the ervice of Her Majety in right of New Zealand (whether that ervice i honorary or not, and whether it i within or outide New Zealand), or any member or employee of any local authority or public body, or any peron employed in her education ervice within the meaning of the State Sector Act Crime Act 1961, R v Connolly, 31 July 2009, French J, HC Chritchurch, CRI , para [42]. 5 Field v R [2011] 1 NZLR 784 (CA).

4 4 corruptly. A key point of dipute in the appeal concerned the meaning of corruptly. The Court aid that proof of dihonety or fraud or of a corrupt bargain i not required. 6 A bribe will be corruptly accepted if, in accepting the bribe, the member i knowingly outide the recognied bound of hi or her dutie a a parliamentarian. 7 The Court provided ome guidance a to the recognied bound of a parliamentarian dutie. It aid that elector elect politician expecting them to act in the public interet and that given their privileged poition immene damage can be inflicted by politician acting out of greed or in the ervice of thoe who bankroll their acent to power. 8 Further, that people the world over have increaingly demanded abolute probity of their political leader. 9 The cae involved acceptance of a bribe by a parliamentarian. However, given the imilarity in wording between 102, 103 and 105 it i likely that the court would apply a imilarly low tet to the meaning of corruptly in relation to an offence by a Miniter or official or where rather than acceptance of a bribe the offence involved offering or giving a bribe. The committee hould note that the Field deciion ha been appealed to the Supreme Court. The appeal wa heard on 21 June 2011 and a deciion i pending. Under 105(1) the offence of accepting a bribe by a New Zealand official ha expre extra-territorial application. Thi proviion applie to act both within New Zealand or elewhere. A well, the definition of official in 99 alo pecifie that ervice by public ervant i covered whether thi i within or outide New Zealand. Therefore, the offence of offering or giving a bribe in 105(2) can arie in repect of a New Zealand official ervice overea. The offence relating to bribery of Miniter and member of Parliament do not exprely apply outide of New Zealand. 6 Field at para [58], [60] and [65] and following. Note that previouly corruptly in relation to a property offence had been held to require a dihonet intention and an intention to act in a way which can fairly be decribed a morally wicked or depraved: Broom v Police [1994] 1 NZLR 680 (HC) dicued in Law of New Zealand at para Field at para [64], [81] and [82]. 8 Field at para [31]. 9 Field at para [32].

5 5 Bribery of foreign public official In relation to the two offence under 105C and 105D of bribery of foreign public official, only a peron who offer or give a bribe for the pecific purpoe of obtaining or retaining buine of to obtain any improper advantage in the conduct of buine commit an offence. The offence in 105D exprely applie to act outide of New Zealand. However, neither 105C nor 105D apply to act outide New Zealand if the act wa not an offence in the country where the office of the foreign public official i ituated ( 105E). Penaltie The Crime Act offence are all punihable by a term of imprionment not exceeding 7 year, except in relation to a Miniter who accept a bribe where the penalty i a term of imprionment not exceeding 14 year. 10 Proviion of additional defence In the Field deciion the Court of Appeal made the obervation that the wide interpretation required to be given to the offence of accepting a bribe may capture aburd circumtance which are not in the public interet to proecute. The Court noted the protection in 102 and 103, namely the requirement for leave of a High Court Judge before a proecution can be undertaken. However, the Court uggeted that thi protection wa inadequate and the legilature may wih to conider exprely providing defence pecific to the offence. 11 Secret Commiion Act 1910 The Secret Commiion Act contain a number of offence relating generally to agent who accept gift or other conideration for doing anything in relation to the principal' affair. It i alo an offence to offer uch gift or reward. The act of accepting or offering a bribe mut be done corruptly. Thi include doing the act for the purpoe of influencing another peron, or to be influenced, to the detriment of a third party buine. 12 It i alo an offence under the Act to give fale receipt or to receive a ecret reward for procuring a contract. The offence proviion in thi Act are et out in full in Appendix Two. 10 In each cae the penalty i provided for in the offence proviion. 11 Field at para [86] and [87]. 12 R v McDonald [1993] 3 NZLR 354, 358.

6 6 Thee offence could apply in ome circumtance to action by Miniter, member, or official. For example, 16(1)(c) provide that every peron in the ervice of the Crown, or acting for or on behalf of the Crown, or holding any office in the public ervice, hall be deemed to be an agent of the Crown. Proecution for any of thee offence require the conent of the Attorney-General. 13 The penaltie for thee offence are: 14 following conviction on indictment, for a corporation a fine not exceeding $2,000, or for any other peron to imprionment not exceeding 2 year or to a fine not exceeding $1,000; where a peron i convicted ummarily, for a corporation a fine not exceeding $200, or for any other peron to imprionment not exceeding 3 month or to a fine not exceeding $100. Thee penaltie need to be reconidered a they appear to have not been altered for decade. Concluion The committee may wih to receive further advice on pecific point raied in thi broad over view. I would be happy to ait further. Catherine Rodger Legilative Counel 13 Secret Commiion Act, Secret Commiion Act, 13.

7 7 Appendix One Relevant offence proviion in the Crime Act 102 Corruption and bribery of Miniter of the Crown (1) Every Miniter of the Crown or member of the Executive Council i liable to imprionment for a term not exceeding 14 year who corruptly accept or obtain, or agree or offer to accept or attempt to obtain, any bribe for himelf or any other peron in repect of any act done or omitted, or to be done or omitted, by him in hi capacity a a Miniter or member of the Executive Council. (2) Every one i liable to imprionment for a term not exceeding 7 year who corruptly give or offer or agree to give any bribe to any peron with intent to influence any Miniter of the Crown or member of the Executive Council in repect of any act or omiion by him in hi capacity a a Miniter or member of the Executive Council. (3) No one hall be proecuted for an offence againt thi without the leave of a Judge of the High Court. Notice of the intention to apply for uch leave hall be given to the peron whom it i intended to proecute, and he hall have an opportunity of being heard againt the application. 103 Corruption and bribery of member of Parliament (1) Every member of Parliament i liable to imprionment for a term not exceeding 7 year who corruptly accept or obtain, or agree or offer to accept or attempt to obtain, any bribe for himelf or any other peron in repect of any act done or omitted, or to be done or omitted, by him in hi capacity a a member of Parliament. (2) Every one i liable to imprionment for a term not exceeding 7 year who corruptly give or offer or agree to give any bribe to any peron with intent to influence any member of Parliament in repect of any act or omiion by him in hi capacity a a member of Parliament. (3) No one hall be proecuted for an offence againt thi without the leave of a Judge of the High Court. Notice of the intention to apply for uch leave hall be given to the peron whom it i intended to proecute, and he hall have an opportunity of being heard againt the application. 105 Corruption and bribery of official (1) Every official i liable to imprionment for a term not exceeding 7 year who, whether within New Zealand or elewhere, corruptly accept or obtain, or agree or offer to accept or attempt to obtain, any bribe for himelf or any other peron in repect of any act done or omitted, or to be done or omitted, by him in hi official capacity. (2) Every one i liable to imprionment for a term not exceeding 7 year who corruptly give or offer or agree to give any bribe to any peron with intent to influence any official in repect of any act or omiion by him in hi official capacity. 105C Bribery of foreign public official (1) In thi ection and in ection 105D and 105E, benefit mean any money, valuable conideration, office, or employment, or any benefit, whether direct or indirect

8 8 foreign country include (a) a territory for whoe international relation the government of a foreign country i reponible; and (b) an organied foreign area or entity including an autonomou territory or a eparate cutom territory foreign government include all level and ubdiviion of government, uch a local, regional, and national government foreign public agency mean any peron or body, wherever ituated, that carrie out a public function under the law of a foreign country foreign public enterprie mean (a) a company, wherever incorporated, that (i) a foreign government i able to control or dominate (whether by reaon of it ownerhip of hare in the company, it voting power in the company, or it ability to appoint 1 or more director (however decribed), or by reaon that the director (however decribed) are accutomed or under an obligation to act in accordance with the direction of that government, or otherwie); and (ii) enjoy ubidie or other privilege that are enjoyed only by companie, peron, or bodie to which ubparagraph (i) or paragraph (b)(i) apply; or (b) a peron or body (other than a company), wherever ituated, that (i) a foreign government i able to control or dominate (whether by reaon of it ability to appoint the peron or 1 or more member of the body, or by reaon that the peron or member of the body are accutomed or under an obligation to act in accordance with the direction of that government, or otherwie); and (ii) enjoy ubidie or other privilege that are enjoyed only by companie, peron, or bodie to which ubparagraph (i) or paragraph (a)(i) apply foreign public official include any of the following: (a) a member or officer of the executive, judiciary, or legilature of a foreign country: (b) a peron who i employed by a foreign government, foreign public agency, foreign public enterprie, or public international organiation: (c) a peron, while acting in the ervice of or purporting to act in the ervice of a foreign government, foreign public agency, foreign public enterprie, or public international organiation public international organiation mean any of the following organiation, wherever ituated: (a) an organiation of which 2 or more countrie or 2 or more government are member, or repreented on the organiation: (b) an organiation contituted by an organiation to which paragraph (a) applie or by peron repreenting 2 or more uch organiation: (c) an organiation contituted by peron repreenting 2 or more countrie or 2 or more government: (d) an organiation that i part of an organiation referred to in any of paragraph (a) to (c)

9 9 routine government action, in relation to the performance of any action by a foreign public official, doe not include (a) any deciion about (i) whether to award new buine; or (ii) whether to continue exiting buine with any particular peron or body; or (iii) the term of new buine or exiting buine; or (b) any action that i outide the cope of the ordinary dutie of that official. (2) Every one i liable to imprionment for a term not exceeding 7 year who corruptly give or offer or agree to give a bribe to a peron with intent to influence a foreign public official in repect of any act or omiion by that official in hi or her official capacity (whether or not the act or omiion i within the cope of the official' authority) in order to (a) obtain or retain buine; or (b) obtain any improper advantage in the conduct of buine. (3) Thi ection doe not apply if (a) the act that i alleged to contitute the offence wa committed for the ole or primary purpoe of enuring or expediting the performance by a foreign public official of a routine government action; and (b) the value of the benefit i mall. (4) Thi ection i ubject to ection 105E. 105D Bribery outide New Zealand of foreign public official (1) Every one commit an offence who, being a peron decribed in ubection (2), doe, outide New Zealand, any act that would, if done in New Zealand, contitute an offence againt ection 105C. (2) Subection (1) applie to a peron who i (a) a New Zealand citizen; or (b) ordinarily reident in New Zealand; or (c) a body corporate incorporated in New Zealand; or (d) a corporation ole incorporated in New Zealand. (3) Every one who commit an offence againt thi ection i liable to the ame penalty to which the peron would have been liable if the peron had been convicted of an offence againt ection 105C. (4) Thi ection i ubject to ection 105E.

10 10 Appendix Two Offence proviion in the Secret Commiion Act Gift to agent without conent of principal an offence (1) Every peron i guilty of an offence who corruptly give, or agree or offer to give, to any agent any gift or other conideration a an inducement or reward for doing or forbearing to do, or for having done or forborne to do, any act in relation to the principal' affair or buine (whether uch act i within the cope of the agent' authority or the coure of hi employment a agent or not), or for howing or having hown favour or difavour to any peron in relation to the principal' affair or buine. (2) Any gift or other conideration given or offered or agreed to be given to any parent, huband, wife, civil union partner, de facto partner, or child of any agent, or to hi partner, clerk, or ervant, or (at the agent' requet or uggetion) to any other peron, hall be deemed for the purpoe of thi ection to have been given or offered or agreed to be given to the agent. 4 Acceptance of uch gift by agent an offence (1) Every agent i guilty of an offence who corruptly accept or obtain, or agree or offer to accept or attempt to obtain, or olicit from any peron, for himelf or for any other peron, any gift or other conideration a an inducement or reward for doing or forbearing to do, or for having done or forborne to do, any act in relation to the principal' affair or buine (whether uch act i within the cope of the agent' authority or the coure of hi employment a agent or not), or for howing or having hown favour or difavour to any peron in relation to the principal' affair or buine. (2) Every agent who divert, obtruct, or interfere with the proper coure of the affair or buine of hi principal, or fail to ue due diligence in the proecution of uch affair or buine, with intent to obtain for himelf or for any other peron any gift or other conideration from any peron intereted in uch affair or buine, hall be deemed to have corruptly olicited a conideration within the meaning of thi ection. 6 Giving fale receipt, invoice, etc, to agent an offence Every peron i guilty of an offence who, with intent to deceive the principal, give to any agent, or ign or otherwie authenticate for the ue of any agent, any receipt, invoice, account, or other document of any nature whatoever in relation to the affair or buine of the agent or hi principal which contain any tatement which i fale, defective, or mileading in any material particular, or which omit to tate explicitly and fully the fact of any commiion, percentage, bonu, dicount, rebate, repayment, gratuity, or deduction having been made, given, or allowed, or agreed to be made, given, or allowed, in relation to the matter referred to in that document. 7 Delivery of fale receipt, etc, to principal an offence Every agent i guilty of an offence who deliver or preent to hi principal any receipt, invoice, account, or other document of any nature whatoever in relation to the buine or affair of hi principal which to the knowledge of the agent i fale or

11 11 defective in any material particular, or i in any way likely to milead the principal, or which to the knowledge of the agent omit to tate the fact of any commiion, percentage, bonu, dicount, rebate, repayment, gratuity, or deduction having been made, given, or allowed, or agreed to be made, given, or allowed, in relation to the matter referred to in that document, or which to the knowledge of the agent omit to dicloe the fact of any gift or other conideration having been received by or promied to the agent in repect of thoe matter, unle in any uch cae the fact which i not dicloed i, to the knowledge of the agent, already known to the principal at the time when the aid document i o delivered or preented to him. 8 Receiving ecret reward for procuring contract an offence (1) Every peron i guilty of an offence who advie any peron to enter into a contract with a third peron and receive or agree to receive from that third peron, without the knowledge and conent of the peron o advied, any gift or conideration a an inducement or reward for the giving of that advice or the procuring of that contract, unle the peron giving that advice himelf act a the agent of the third peron in entering into the contract, or i to the knowledge of the peron o advied the agent of that third peron. (2) For the purpoe of thi ection a peron hall be deemed to advie another peron to enter into a contract if he make to that other peron any tatement or uggetion with intent to induce him to enter into the contract.

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