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Keppel O&M graft case: Global resolution achieved more than what S'pore alone could, says Indranee

Ms Indranee said Keppel O&M did not get off lightly; the US$422m penalty was about eight times the US$55m in bribes it paid out.


THE global resolution that Keppel Corporation's rig-building unit reached with the authorities across three countries over a corruption scandal achieved more than what the Singapore government would have been able to attain if it had prosecuted the company solely under Singapore laws, Senior Minister of State for Law Indranee Rajah said in Parliament on Monday.

She also stressed that Singapore does not condone or tolerate corruption, and that Singapore firms must "keep their own systems clean" and comply with the laws of the countries in which they operate.

"Incorruptibility is a foundational value for Singapore. We must keep Singapore clean," she said.

Ms Indranee was addressing questions from Members of Parliament (MPs) on the cross-border graft probe centred on Keppel Offshore & Marine (Keppel O&M), which has been slapped with US$422 million in fines as part of the resolution.

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Keppel O&M had paid US$55 million in bribes between 2001 and 2014 to officials at Brazilian state-owned oil giant Petrobras and the then-governing political party, Workers Party of Brazil, to secure 13 contracts. The company earned a total of US$351.8 million through the bribery scheme.

Ms Indranee said that any penalty or claim that Keppel O&M might be subject to under the Singapore law would be far less than what the company is now liable for under the coordinated resolution.

She noted that the maximum fine under the Prevention of Corruption Act, for instance, is S$100,000 per charge - not anywhere near the US$422 million penalty, of which a quarter, or up to US$105.6 million, is to be paid to Singapore.

Besides the US$422 million in fines, Keppel O&M is also required under the US Deferred Prosecution Agreement (DPA) to strengthen its internal controls and compliance and anti-corruption programmes.

In response to a question by Workers' Party MP Sylvia Lim (Aljunied GRC) on whether the US$422 million penalty imposed on Keppel O&M was part of a three-nation plea bargain agreement, Ms Indranee said each jurisdiction had acted under their own domestic laws, though in coordination with one another.

Keppel O&M was issued a conditional warning in Singapore in lieu of prosecution, with terms "closely aligned" to those the company had reached with the US authorities, said Ms Indranee. This decision was made in view of several factors, including how Keppel O&M had voluntarily reported its internal findings to the Corrupt Practices Investigation Bureau (CPIB) and the Attorney-General's Chambers (AGC) in September 2016, and had cooperated with all three jurisdictions in the investigation and resolution process.

Ms Indranee stressed that the company has not gotten off lightly - another point brought up by Ms Lim, who cited public concern over what has been perceived as lenient treatment being meted to Keppel O&M.

She noted the US$422 million penalty Keppel O&M was dealt was about eight times more than the US$55 million in bribes it had paid out. The firm, which has been subject to an enhanced compliance regime under the US DPA, has also taken remedial actions, including meting out US$8.9 million in financial sanctions on 12 former or current employees as part of the disciplinary process.

As for the individuals involved in the bribery scheme, investigations are still ongoing. Ms Indranee said that it is standard practice in Singapore not to identify individuals under investigation, although individuals will be identified if and when charges are taken up in court.

She added that not all aspects of the investigations are within the government's control, given that this is an international case where various investigating agencies are involved.

The AGC is working on a request for Mutual Legal Assistance, where one country formally seeks assistance from another to obtain or secure evidence for use in its own investigations and proceedings.

The Public Prosecutor will independently decide on the appropriate response after the investigations are complete, she explained. This will depend on several factors, such as what each individual knew of the corrupt acts, the extent of his involvement, his motivations, the amount of personal benefit, the circumstances under which the acts took place and the extent of cooperation rendered.

"But let me just say one other thing on this, which is that it is not a matter of letting individuals off lightly. We have in the past taken actions against people irrespective of their status," said Ms Indranee. She named senior management of government-linked firms, government officials, politicians and other prominent figures who have been investigated and charged in the past - including seven senior management members of ST Marine, former National Kidney Foundation chief executive T T Durai, former civil defence chief Peter Lim and the late National Development Minister Tay Cheang Wan, who took his life while investigations were ongoing.

"So there's no doubt about CPIB's record and there's no doubt that we will take action if there is cause to do so."

Meanwhile, on questions pertaining to the government and Temasek Holdings as shareholders of Keppel, Ms Indranee said the government does not interfere in or influence the business decisions or operations of Temasek or its portfolio companies, nor does Temasek for its portfolio companies.

"Temasek holds the boards of its portfolio companies responsible for running the companies honestly and competently," she said, adding that the government expects Singapore companies and Singaporeans to "do business honestly and lawfully even in complex environments", while Temasek, too, does not condone improper conduct and malfeasance.

Ms Indranee acknowledged there are many places in the world where corruption is endemic and the business environment is very different from Singapore.

"We cannot be a global policeman. Singapore companies have to operate in all kinds of environments. But as a matter of principle, we expect that they must do so while keeping their systems clean, and complying with the laws of the countries where they operate," she said.

"They must develop ways of operating which enable them to do this. They cannot lower their own standards of integrity, and they must not bring back to Singapore practices alien to the norms which we have established with such great effort here."

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