Engineers, regardless of the companies they work in (e.g. consultancy firms or contractors), may encounter conflict of interest (CoI) in the course of their work, particularly during contract letting. A CoI arises when private interests of an engineer compete or conflict with the interests of his or her employer or client, or with his or her official duties. A CoI is not a wrongdoing per se, however, improper handling or abuse of a CoI may lead to criminal offences (e.g. fraud). To help HKIE members avoid falling prey to pitfalls of CoI, the following case study illustrates a common CoI situation in contract letting, the possible legal consequence of abusing a CoI, and best practices for managing a declared CoI.

Case in Perspective

John was an engineer employed by ABC Contractor and participated in the tender exercise for a sub-contract on a building project. He was responsible for, among other duties, drawing up a bidders’ list, conducting the tender assessment, and recommending a sub-contractor for the contract award. ABC explicitly required its staff to avoid CoI and to declare any apparent or potential CoI when discharging official duties (e.g. during tendering). In the tender exercise, John not only included a sub-contractor owned by his brother but also recommended that the same sub-contractor for the contract award. Despite the apparent CoI, John submitted a declaration stating that he had no CoI.

Legal Requirements

Corruption Risk Analysis
In this case, John falsely declared that he had no CoI with one of the tenderers, despite being fully aware of the company’s written requirements for COL declaration. His submission of a false declaration therefore constitutes an offence under S.9(3) of POBO or S.16A under the Theft Ordinance.

Dos and Don'ts

Professional engineers should –

• strictly observe the CoI requirements set out by the employer and/or client;
• avoid CoI as far as practicable, and declare the CoI, if unavoidable, to the employer and/or client;
• seek the employer’s and/or client’s instruction on follow-up actions to mitigate any declared CoI; and
• not misuse their position or abuse the power to make personal gains.

Engineering firms should –

• devise a mechanism for handling the declaration and management of CoI from staff, including but not limited to:
  • providing work-related examples and guidelines on managing CoI for staff reference by staff;
  • issuing a form to facilitate written declaration and to record follow-up actions taken, where applicable; and
  • setting out procedures and a schedule of authorities for handling the declaration forms and determining appropriate follow-up actions.
• ensure staff are fully aware of the CoI declaration and management requirements (e.g. enshrining the requirements in a code of conduct or employment contract, circulating the requirements on a regular basis or when there are updates, and providing periodic training).

Assistance from ICAC
The ICAC, through the Corruption Prevention Advisory Service (CPAS) of its Corruption Prevention Department (CPD), provides free, confidential and tailor-made corruption prevention services for private companies upon request.
For further information, please contact the CPAS at:

Hotline: 2526 6363

Fax: 2522 0505

Email: cpas@cpd.icac.org.hk 

Website: http://cpas.icac.hk (CPAS Portal)²

¹ To view the full provisions of POBO, please visit https://www.elegislation.gov.hk/hk/cap201.

² CPAS Portal aims to raise private practitioners’ awareness on corruption prevention. Users can obtain corruption prevention resources published by CPD, such as Best Practice Checklists, case studies, red flags and quick tips.

This article is contributed by the Independent Commission Against Corruption (ICAC).