Criminalisation of bribery in the private sector requires legislative alignment with the United Nations Convention Against Corruption
Ramallah – The Civil Society Team for Enhancing Public Budget Transparency (“Team”) held a session to discuss a draft report on Criminalisation of Acts of Corruption in the Palestinian Private Sector. The report aims at providing concrete recommendations to decision makers to promote integrity and fight against corruption in the private sector in harmony with the United Nations Convention Against Corruption (UNCAC) and Palestinian needs. The report also seeks to ensure that all sectors are immunised against opportunities for corruption and to bridge gaps in Palestinian legislation.
In his opening statement, Mr. Issam Haj Hussein, Executive Director of the Coalition for Accountability and Integrity (AMAN) that also serves as Secretariat of the Team, explained that “the private sector influences, and is influenced by, practices of corruption and the political system as a whole.” Through public shareholding companies, the private sector provides basic services to citizens, including water, electricity and telecommunications. In light of the global trend of privatisation, service intersections with the public sector are in place. Haj Hussein stressed that the private sector, particularly public shareholding companies, were a partner in public administration and has obligations to fight corruption.
According to Haj Hussein, the advancement of integrity, transparency, and accountability in private sector operations has been at work since 2009. With AMAN on its membership, the National Committee for Private Sector Governance was established. AMAN has worked towards encouraging the private sector to comply with the rules of governance and play a greater role in the fight against corruption by means of corporate social responsibility. On the other hand, Haj Hussein highlighted a set of challenges to combating any form of corruption in the private sector or to procedures for immunisation against corruption. These include a legislative gap, lack of an antitrust law, and right to competition.
In her review, Ms. Anan Jab’iti, a researcher, stated that the draft report aimed at making reference to acts of corruption that are not listed in the Anti-Corruption Law. This is contrary to the provisions of the UNCAC and other relevant conventions, to which the State of Palestine is party. The report also seeks to show reflections of this legislative gap on the anti-corruption effort in the private sector and the role the sector plays in this area.
Criminalisation of bribery in the private sector
The report concludes that, although the State of Palestine acceded to the UNCAC in 2014, Palestinian regulations, particularly the Anti-Corruption Law No. 1 of 2005, have been inadequately harmonised with the NUCAC requirements for criminalising corruption in the private sector. The process has been out of balance with the alignment of items of legislation that criminalise acts of corruption in the public sector. While bribery is not incriminated, embezzlement of property in the private sector is characterised as an offence of misappropriation. This is not in keeping with the considerations and emphasis placed by the UNCAC on the prosecution of corruption offences.
Need to strengthen controls for prevention of conflicts of interest in the private sector
Jab’iti made clear that failure to criminalise acts of corruption in the private sector would have negative consequences on public services, which the private sector provides in the context of privatisation and private-public partnership in pubic administration. Immunisation of the private sector against offences of corruption requires that the Corporate Governance Code for the Private Sector be updated and put into effect. In addition to compliance with conventions and regulations that criminalise bribery, controls for the prevention of conflicts of interest will be promoted in the private sector. While the UNCAC does not make them offences, some acts of corruption need to be criminalised in the private sector.
Need to activate corporate compliance departments
Mr. Saqr Jundiyyeh, Advisor to the Bank of Palestine, stressed the importance of putting into operation the Corporate Governance Code for the Private Sector as well as the need for developing working mechanisms of compliance departments and officers. This was further confirmed and commended by Dr. Azmi Shuaibi, Advisor to the AMAN Board of Directors for Anti-Corruption Affairs. In his comment, Shuaibi emphasised that corporate governance rules be applied. More compliant companies will be encouraged at annual recognition events.
Ms. Natali Hamdan, Advisor to the General Secretariat of the Council of Ministers, asserted that the government was serious and attentive to developing mechanisms for providing all protections to citizens who report cases of corruption. Hamdan stressed the need for stepping up efforts to raise public awareness with a view to promoting a change in individual culture. Citizens will be engaged further in whistleblowing in the context of exercising their citizenship.
Advocate Mohammed al-Harini, member of the Palestinian Bar Association, commented that “our policies need to keep abreast of the evolution of crime itself.” There is a correlation between service provision, fight against corruption, human rights, and development. Advocate Haytham az-Zu’bi referred to the legislative congestion now in place. In the absence of the Palestinian Legislative Council, an excessive number of laws by decrees have been promulgated by the President. As a result, existing legal provisions and laws, including on criminalised acts, should necessarily be reinvigorated, monitored, and put into force. While emphasising the rule of law and equity, the PLC needs to be brought back in session as it expresses the collective will.
Mr. Abdullah Ilayyan, representative of the Palestinian Anti-Corruption Commission (PACC), stated that corruption was a transcontinental plague and existed in every country around the world. Responsibility for fight against corruption is collective, rather than individual. Ilayyan stressed the need for a crosscutting strategic plan with a relevant programme of implementation. Developed in partnership with all other sectors, the plan will include many activities within the purview of preventive measures.
In his comment, Ilayyan affirmed that corruption court proceedings were open and publicly accessible. The PACC compiles and releases periodic reports on the number of complaint filings, cases dispositions, and other statistical data.
Incorporating acts of corruption within the Anti-Corruption Law
The report recommended the need for amending the Anti-Corruption Law No. 1 of 2005 with a view to subjecting large entities of the private sector to provisions of the law. In particular, this will involve public shareholding companies with publicly traded shares as well as entities that mange public facilities or provide public services. Embezzlement of property in the private sector will be criminalised, rather than merely considering it as an offence of misappropriation. All acts of favouritism, nepotism, failure to disclose cases of conflicts of interests, blackmails, and sexual harassment in the workplace in the private sector will all be criminalised.
The Team also recommended the importance of operationalising and amending compliance with the Corporate Governance Code for the Private Sector in line with the provisions of the Company Law. The role of formal regulatory bodies, which supervise and monitor private management of public facilities, needs to be rejuvenated.