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Blacklist to Tackle Construction Bribes

Though it may not be welcomed by everyone across the country, the public can have high hopes for a new initiative being introduced jointly by the Supreme People's Procuratorate, the Ministry of Construction, the Ministry of Communications and the Ministry of Water Resources.

It can be assured of a warm welcome by the general public for it is the public who will be the winners. The losers who will face public embarrassment and be unable to continue in business, will be those who have sought unfair and illegal advantages for their business interests for what is being introduced is a new bribery Blacklist.

The system, which will operate first on a trial basis, is to help deal with bribery in the country's construction sector. It will provide a mechanism for the procuratorial organs to investigate and follow up on construction bribery cases in the light of court decisions and rulings.

Here's how it will work. During a construction project's planning, feasibility studies, design, construction, supervision and material and equipment procurement, the official departments responsible will be able to find out if a contractor has a record of bribery known to the local procuratorial organs.

The new measures prescribe different levels of response commensurate with the seriousness of a case. An offender who has been found guilty of a serious offence involving bribery will be permanently banned from access to the constructional market. A first offender may be released from the Blacklist by complying fully with instructions within a given time limit.

In addition to three ministry-level units, the system will also be tried out in Jiangxi, Zhejiang and Sichuan provinces, in Chongqing Municipality, and in Guangxi Zhuang Autonomous Region.

Ren Jianming, head of the Office for Research on Corruption with Tsinghua University said, "The implementation of new system marks a turning point in the fight against serious corruption in the construction sector."

The first blacklist

The People's Procuratorate of Beilun District, Ningbo City of Zhejiang Province was first to introduce the Blacklist system. Its chief procurator, Xu Shangjin said, "In early 2002 the procuratorate collected and catalogued files on more than 90 perpetrators in bribery cases into a database. From the database 17 particularly blatant offenders were selected to form a Blacklist as the basis for providing a 'bribery advisory service' rather like a 'credit advisory service' for the various official units involved."

Xu said that satisfying any one of four criteria meant a place on the Blacklist:
1. offenders who had already been sentenced for their crimes of bribery
2. offenders who had not yet been sentenced but where bribes exceeding 50,000 yuan (about US$6,000) were involved
3. offenders with more than two records against them or having bribed more than three people
4. unrepentant offenders who refuse to admit their crimes when confronted with the facts.

"The new measures came as quite a shock to those involved in the construction sector in the Beilun area," said Xu.

The Beilun experiment in Ningbo was watched closely by the Supreme People's Procuratorate which invited experts to a seminar to discuss the measures at the end of 2003.

Professor Wang Ping from the China University of Politics and Law said that while the experts had a positive reaction to the new system, they had put forward some useful suggestions. One of these focused on the issue of whether suspects who had not yet been found guilty by a court of law should be blacklisted.

"Those suspected of crimes of bribery should not be presumed guilty without irrefutable evidence. There is a need to strike a balance between the need to crack down on corruption and the need to guarantee human rights," said Prof. Wang.

The feedback had come at the end of a year of careful evaluation. The Supreme People's Procuratorate adopted the experts' recommendations and introduced a trial 'Bribery Files Enquiry System' which limited blacklisting to those who had been subject to 'court decisions and rulings'.
Deterrence rather than punishment

Professor Zhou Qihua of the State Procurator College said that both offering and accepting bribes are violations of the criminal law. However, the law penalizes them very differently.

The state cracks down much more heavily on those who take bribes compared with those who offer them. This is especially the case where government officials are involved.

Often those who offer the bribes do not end up in court themselves. And penalties tend to be loaded against those who accept bribes, for example accepting just 5,000 yuan (about US$600) is a crime. But the amount involved has to be twice as much before offering the bribe constitutes a criminal act. Here one party to a clearly wrongful act can be a criminal while the other is not.

Besides there's a commonly held view that bribers often have no option but to do as they do. If they come forward to own up and give a proper account of what they have done rather than wait to be exposed during the investigations, they are usually let off. Bribers are generally only taken to court in serious cases, where the amounts involved are particularly large, or where they have not admitted their crime while the bribe-taker has.

Xu said, "It's difficult to investigate and deal with bribery, since bribers won't usually admit what they have done if this would lead them to being found guilty. What's more, when the briber and the bribe-taker stick to a pact not to betray each other it's not so easy to gather the evidence needed to break the case."

Professor Li Chengyan of Peking University said, "The new system will need further refinement if it is to make a real difference. It is aimed at frightening bribers who haven't yet been put on the Blacklist by letting them know that if they break the law they can expect to be punished."

Corruption targeted in key sectors

Corruption in construction has become the focus of public attention. During a mid-April seminar on credit and anti-corruption in the construction sector, Liu Zhi, president of the Changan Surety Co., Ltd, revealed that the construction sector was responsible for 60 percent of China's bad debts. What's more, half of all major corruption cases involving provincial-level officials related to construction projects.

In a survey conducted by the Central Commission for Discipline Inspection of the CPC earlier this year, the construction sector was found to be thought of as the most corrupt sector in the country. It was against this background that the Supreme People's Procuratorate, the Ministry of Construction, the Ministry of Communications and the Ministry of Water Resources have introduced the new Blacklist.

Prof. Ren Jianmin described the three main strategic elements in the implementation of the new system:
1. the emphasis is on anti-corruption work in the key ministries of construction, communications and water resources which are considered to be breeding-grounds for corruption
2. experience will be accumulated and shared nationwide
3. there is a focus on preventative measures.

Prof. Wang Ping points out that there are strict laws and regulations for punishing bribers in other countries, and suggests that China could draw on this experience. For example, in Singapore it is not enough just to refuse an offer of a bribe, it must be reported to the judicial authorities and it is an offence not to do so. "This has been very effective in cracking down on corruption," Wang said.

Experts have pointed out that the implementation of the system might even give a new lease of life to some existing preventative measures. For example, measures to promote the use of "standard contracts and clean government contracts" were introduced in some places but suspended as ineffective due to the lack of a back-up mechanism for censure. The experts say the new Blacklist has the potential to add effective new teeth to these extant provisions.

Call for a nationwide credit authentication system

The famous global anti-corruption organization Transparency International (TI) published an article on May 13 entitled China moves against bribery in construction sector, highly praising the measures taken by the Chinese government in cracking down on corruption.

"Since its entry into the World Trade Organization (WTO) in 2001, China has stepped up its efforts to crack down on corruption. The blacklisting measure is just one part of recent reforms in public contracting, including the establishment of an open bidding system and competitive construction markets at the local level," the article said.

The government's decision to debar corrupt contractors is a positive sign of China's willingness to tackle corruption, said Juanita Olaya, program manager for public contracting at the TI Secretariat. This should send a message to other governments and international organizations to introduce more effective and more transparent blacklisting systems.

Despite the strong international approval, experts caution that it is still too early to tell if the new system will bring quick results. And they called for the early establishment of a nationwide credit authentication system network involving all the main areas such as the construction, medical and financial sectors, so that anyone with a record of bribery could be debarred from operating in all sectors.

Procurator Xu Shangjin said, "Bribers who have already been put on local blacklists will be evaluated and the procuratorates at all levels will decide whether they should be placed on city or national lists according to the seriousness of their crimes."

(China.org.cn by Li Jingrong June 14, 2004)

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