Proceedings of deferred prosecution agreement will not be made public to prevent firms from being prejudiced: Indranee
The legal tool came under the spotlight recently following the corruption probe involving Keppel Corporation’s offshore and marine unit, which had entered into a deferred prosecution agreement with the United States Department of Justice. REUTERS file photo
SINGAPORE — A legal scheme that allows corporations to enter into an agreement with the authorities to avoid prosecution if they comply with certain conditions was passed into law on Monday (March 19), but not before several Members of Parliament (MPs) called for greater transparency to prevent firms from using the scheme to “game the system”.
Senior Minister of State for Law Indranee Rajah said in Parliament that court proceedings involving such agreements will not be made public to prevent firms from being prejudiced in any future criminal proceedings. She also added that it is not compulsory to release the grounds of decision involving such agreements.
Under the deferred prosecution agreement (DPA), which was one of several changes made to the Criminal Procedure Code and Evidence Act, companies taken to task for corporate offences will avoid criminal conviction if they meet conditions under the agreement.
Ms Indranee noted that such conditions can include admission of wrongdoing by the corporate offender, as well as requiring the corporation to pay a financial penalty. “Unlike some criminal fines, the financial penalty will not be subject to a statutory maximum,” she added.
Other conditions include requiring the corporation to assist in investigations and prosecution of other wrongdoers, and implement programmes for corporate reform going forward. All DPAs will also be approved by the High Court as safeguard, said Ms Indranee.
She added: “This tool is particularly useful where prosecution of a corporate offender unnecessarily punishes not just the management, but also the employees or other stakeholders and shareholders of the corporate entity for what might be the acts of a small number of employees or officers of the company.”
The legal tool came under the spotlight recently following the corruption probe involving Keppel Corporation’s offshore and marine unit, which had entered into a deferred prosecution agreement with the United States Department of Justice.
As part of the agreement, it has to pay US$422 million in fines to authorities in three countries. This is for handing out bribes of more than US$50 million over 13 years to officials in Brazil in exchange for business deals.
In January, Law and Home Affairs Minister K Shanmugam said it was “about time” Singapore introduced such agreements, as he pointed out that the United States and United Kingdom had already introduced such a legal framework.
While MPs said that the DPA will incentivise corporations to fully investigate and cooperate with the authorities, which will save the Government’s time and resources, some including Workers’ Party chaiman Sylvia Lim, Vikram Nair (Sembawang GRC) and Patrick Tay (West Coast GRC) questioned why the High Court does not need to make its grounds of decision public in approving such agreements.
Mr Tay said that doing so will help to “ensure consistent and transparent application of the DPA tool”.
While Ms Lim acknowledged the “virtues” of DPA, she said that it is a “tremendous benefit to a corporation in that it will not have a conviction recorded against it, which will in turn allow it to continue business and not face consequences such as being blacklisted or debarred from projects”.
She also pointed out that UK courts allow DPA proceedings to be made public, and questioned why that will not be the case for Singapore.
“After all, entering a DPA is a big deal in the sense that the state is agreeing to let a corporation avoid prosecution for a serious offence that it admits to committing,” said Ms Lim.
“In my view, making it mandatory for the High Court to publicly justify why it approved a DPA can only help to instill confidence in the system.”
In her response, Ms Indranee said that it is not necessarily the case that DPA proceedings will end up with the court granting approval.
When such proceedings are held publicly, and if it the DPA does not eventually come into force, “the company negotiating the DPA could be prejudiced in any future criminal proceedings based on the same facts”.
Ms Indranee pointed out that if companies have reason to fear that their “willingness to negotiate” a DPA will prejudice their defence later on, they “may be unwilling to volunteer information or cooperate and the benefits of the DPA scheme will then be undermined”.
On why the High Court is not required to provide grounds for its decision when approving such agreements, Ms Indranee said that the DPA is not a judgement, and as such, does not “have a binding effect” on other courts.
The move is also consistent with Singapore’s legal framework, where it is not compulsory for the courts to publish grounds of judgement, be it for criminal or civil cases, she added.
But Ms Indranee stressed that approval will be granted if the DPA “is in the interest of justice and its terms are fair, reasonable and proportionate”. “The court should not obviously grant or approve the DPA unless it has met that threshold,” she added.
To prevent companies from gaming the system, Mr Tay also asked if the Government intends to publish a code of practice for DPA – which is the case in the UK – so that the prosecution can use it as guidance before deciding whether to enter into such agreements.
Ms Indranee said that that Singapore will not follow such an approach, and that doing so will be akin to publishing its prosecutorial guidelines, which it does not do to “ensure that prosecutorial guidelines do not become a tool for criminals to refer to in manipulating the criminal justice system to escape punishment”.
In response to Bukit Batok MP Murali Pillai’s call for the courts to have oversight over external parties or monitors appointed to ensure companies adhere to the DPA’s conditions, Ms Indranee said that parties have the flexibility “to negotiate and set out the details concerning the role and supervision of monitors”.
Clarification: An earlier version of this story said that in response to questions on why the High Court is not required to publish its decision when approving such agreements, Ms Indranee said that the DPA is not a judgement, and as such, does not “have a binding effect”. The Law Ministry has clarified that the High Court is not required to provide grounds for its decision when approving such agreements; but if it does so, such grounds must be published. Further, the DPA does not "have a binding effect" on other courts.
