Singapore High Court sets out revised sentencing framework for private sector corruption offences

In the recent Singapore High Court decision of Goh Ngak Eng v Public Prosecutor [2022] SGHC 254 ("Goh Ngak Eng"), a three-member bench comprising Chief Justice Sundaresh Menon, Justice of the Court of Appeal Steven Chong and Justice Vincent Hoong set out new sentencing guidelines for private sector corruption offences prosecuted under ss.6(a) and (b) of Singapore Prevention of Corruption Act 1960 ("PCA").

The new framework requires the court to look at salient features of offending conduct, such as the amount of gratification given or received, the degree of planning and premeditation and the involvement of a transnational element. The court also set out a revised indicative sentencing range for private sector bribery prosecuted under ss.6(a) and (b) of the PCA.

This article discusses the new sentencing framework in Goh Ngak Eng, as well as steps companies with a Singapore nexus can take to better detect and deter corrupt behavior.

Facts of the Case

In Goh Ngak Eng, the Accused was a director of Megamarine Services Pte Ltd, a marine equipment firm. Between 2014 and 2017, the Accused had referred various vendors to jobs with Keppel FELS, a subsidiary of Keppel Offshore and Marine. In exchange, he had asked the vendors to mark up their invoices to Keppel FELS, and shared these mark-ups with two co-conspirators, one of them a then-yard manager at Keppel FELS who had the power to influence the hiring of certain outside vendors.

The mark-ups totaled S$879,853.63, of which the Accused received S$191,115.89. The Accused was charged with 19 charges under s.6(a) of the PCA, which prohibits agents from the corrupt acceptance of any gratification, as well as four charges of corruptly giving gratification under s.6(b) of the PCA.

At trial before the Singapore District Court, the Accused pleaded guilty and was sentenced to 17 months and 3 weeks' imprisonment. Dissatisfied, the Accused lodged an appeal, on the grounds that the sentence which the district judge imposed was manifestly excessive.

Revised Framework

On appeal, the High Court found that the Accused's initial sentence was "manifestly inadequate",¹ and enhanced the aggregate sentence to 37 months and 3 weeks' imprisonment, more than double of what the Accused was initially sentenced to. The Court also declined to follow the traditional sentencing framework that was used in previous private corruption cases, on the basis that the former framework could be "excessively complex and technical".² The court preferred a new five-step sentencing framework, which would now be applied to all prosecutions of private sector bribery under ss.6(a) and (b) of the PCA.

We set out the new five-step test below.

Step 1: Identifying offence-specific factors

• At step one, the Court would identify, by reference to factors specific to the particular offence under consideration, (i) the level of harm caused by the offence and (ii) the level of the offender's culpability. The harm caused by the offence may be categorized as "slight", "moderate" or "severe", while the offender's culpability may be categorized as "low", "medium" or "high".³

Factors going towards harm

• Factors going towards harm may include the following:⁴
  • Actual loss caused to the principal;
  • Benefit to the giver of gratification;
  • Type and extent of loss to third parties;
  • Public disquiet;
  • Offences committed as part of a group or syndicate;
  • Involvement of a translational element;
  • Whether the public service rationale is engaged (the "Public Service Factor");
  • Presence of public health or safety risks;
  • Involvement of a strategic industry; and
  • Bribery of a foreign public official (the "Foreign Public Official Factor").
• In particular, where the Public Service Factor is concerned, the Court noted that there may be cases where a bribe is paid to a private sector actor, but nonetheless the subject matter of the offence may involve a public contract or an essential service akin to those provided for by public bodies, for example public transport or the construction of a public highway. In such cases, the court should consider that a bribe given may cause damage to public confidence in the provider of public or essential services, in the same way that damage is caused to public confidence in the public administration in the case of public sector corruption.⁵
• In relation to the Foreign Public Official Factor, the Court also considered that where a bribe is given (whether by an offender within Singapore's borders or a Singaporean offender outside Singapore) to a foreign public official, this can be considered an aggravating factor as it might undermine Singapore's international reputation for standing resolutely against corruption.⁶ This factor may be of particular significance to Singaporean companies with foreign operations - bribes given by a Singaporean company to foreign public officials may be prosecuted as private sector bribery in Singapore and be treated as an aggravating factor under the PCA.

Factors going towards culpability

• As for factors going towards the offender's culpability, the Court laid out some examples of such factors it would consider:⁷
  • Amount of gratification given or received;
  • Degree of planning and premeditation;
  • Level of sophistication;
  • Duration of offending;
  • Extent of the offender's abuse of position and breach of trust;
  • Offender's motive in committing the offence;
  • Presence of threats, pressure or coercion; and
  • Role played by the offender in the corrupt transaction.

Step 2: Identifying the applicable indicative range

• At step 2, the Court would identify the applicable indicative range by reference to the level of harm caused by the offence (in terms of slight, moderate or severe) and the level of the offender's culpability (in terms of low, medium or high). In this regard, the Court set out the following sentencing matrix for a accused person who is convicted for an offence under ss.6(a) or 6(b) of the PCA:⁸

Step 3: Identifying the appropriate starting point within the indicative sentencing range

• At step 3, the Court would identify the appropriate starting point within the indicative sentencing range that has been identified at step 2. In doing so, the Court would consider offence-specific factors and the harm and culpability levels associated with the offending conduct. The court made clear that this was not an instance of double-counting the offence-specific factors, rather the purpose was to granulate the case to arrive at what a suitable starting point may be.⁹

Step 4: Making adjustments to take into account particular circumstances

• At step 4, the Court would make adjustments to the identified starting point taking into account offender-specific aggravating and mitigating factors. Relevant aggravating factors may include previous antecedents and lack of remorse, while mitigating factors include a guilty plea, voluntary restitution and cooperation with the authorities.¹⁰

Step 5: Applying the totality principle

• In a case where an offender has been convicted of multiple charges, the Court would conduct step 5, which is to take into account the totality principle. The totality principle requires the sentencing judge to take one "last look" at all the facts and circumstances, to be satisfied that the aggregate sentence is sufficient and proportionate to the offender's overall criminality.¹¹

Applying the above framework to the present case, the Court identified a number of offence-specific factors including that Keppel FELS had paid S$566,289.15 of wrongful markups, the offence was committed in the content of a strategic industry (the bunkering and maritime industry), the offending took place on a number occasions over three years and there was a degree of planning and premeditation in the manner in which the bribes were sought.¹² After applying the five-step test, the Court arrived at a global sentence of 37 months and 3 weeks' imprisonment, more than double of what was initially sentenced by the district judge.

The Court also took the opportunity to remind all accused persons that the Court will consider enhancing sentences in cases of plainly unmeritorious appeals, even in the absence of a cross-appeal by the Prosecution (like in this case).

Key Takeaways

The new sentencing framework set out in Goh Ngak Eng provides greater clarity and structure to future sentencing judges when dealing with cases involving private sector bribery under ss.6(a) and (b) of the PCA. It also showcases the Court's resolute attitude in punishing acts involving private sector bribery, which the Court observed has the propensity to distort the efficient operation of the Singapore market and disturb the public's legitimate expectations of bona fides, commercial even-handedness and economic welfare.¹³ The Court also identified that the need to deter private sector corruption has in recent years "resulted in a upward trend in custodial sentences for serious private sector corruption offences", such that sentences imposed a few years ago may "no longer constitute appropriate reference points".¹⁴ Simply put, Goh Ngak Eng should be seen as a reiteration of the Singapore Courts' zero tolerance policy towards bribery and corruption.

While the sentencing framework in Goh Ngak Eng is applicable to individuals convicted of private sector bribery under ss. 6(a) and (b) of the PCA, companies with a Singapore nexus should also be reminded that companies that participate in private sector bribery may also face prosecution under the PCA. In determining whether to charge a company, the prosecution would typically determine whether the individual who committed the crime is "an embodiment of the company" and therefore acted "within the scope of the function of management properly delegated" to him or her by the company in question.¹⁵

Given Singapore's zero tolerance policy towards corruption and the judicial attitude seen in Goh Ngak Eng and other cases, we would advise companies with a Singapore nexus to implement proper controls to effectively detect and deter individual misconduct. In our experience, a proper anti-corruption program would, at a baseline, typically include the following components:

• Risk-based screening on business partners and third parties, with more stringent checks on business partners in high-risk industries or markets;
• Clear written guidelines for the provision of entertainment, gifts and hospitality to business partners and government officials;
• Regular and periodic compliance training to employees, particularly those functions that interact with government officials, key clients and outside vendors;
• Inclusion of standard compliance provisions in contracts with third parties that would require the third party to comply with compliance laws and establish its own controls to prevent and detect breaches of this commitment; and
• Regular audits to ensure that books and records are accurate and complete and that transactions are executed in accordance with management's authorization.

_{1 Goh Ngak Eng at [6].
2 Goh Ngak Eng at [34].
3 Goh Ngak Eng at [45](a).
4 Goh Ngak Eng at [95].
5 Goh Ngak Eng at [67].
6 Goh Ngak Eng at [75].
7 Goh Ngak Eng at [95].
8 Goh Ngak Eng at [103].
9 Goh Ngak Eng at [45](c).
10 Goh Ngak Eng at [46](a).
11 Goh Ngak Eng at [123]
12 Goh Ngak Eng at [106] and [110]
13 Goh Ngak Eng at [54], citing the Court’s previous judgment in Public Prosecutor v Ang Seng Thor [2011] 4 SLR 217 at [41].
14 Goh Ngak Eng at [31].
15 Tom Reck Security Pte Ltd v Public Prosecutor [2001] 2 SLR 70 at [17].}

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_{This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.}

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