Managing Integrity: The Regulation of Post Public Employment in Britain and Hong Kong

Managing Integrity: The Regulation of Post PublicEmployment in Britain and Hong Kong

Ian Scott & Joan Y. H. Leung

Published online: 15 October 2008# Springer Science + Business Media, LLC 2008

Abstract In this article, we examine the regulatory mechanisms governing postpublic employment in Britain and Hong Kong in the context of changing views onhow integrity should be managed in their civil services. In both places, new publicmanagement practices have increased the possibility of ‘soft’ conflicts of interestwhich in turn has resulted in debates over the necessary degree of regulation, theorganizational form that this should take, and the extent to which ethical concernsshould be more focused on the communication and inculcation of core values in civilservants. We argue that the difficulty of regulating ‘soft’ conflicts of interests isdriving moves toward the greater centralisation of ethical regulation in both Britainand Hong Kong and that there appears to be a return to more traditional ways ofmanaging integrity.

Keywords Ethical regulation . Conflict of interest . Post public employment .

Trust in government . Public service ethos

Over the past decade, governments in developed countries have become increasinglyconcerned about the management of integrity and, more specifically, about theminimization and regulation of potential conflicts of interest (Kernaghan 2007;OECD 2003: 22–27; OECD 2007). Changing public management practices,

Public Organiz Rev (2008) 8:365–380DOI 10.1007/s11115-008-0067-2

I. ScottMurdoch University, Perth, WA, Australia

I. Scott : J. Y. H. LeungDepartment of Public and Social Administration, City University of Hong Kong, Kowloon,Hong Kong, China

I. Scott (*)16 Allen-Williams Pde, Winthrop WA6150, Australiae-mail: [email protected]

particularly the greater interchange between the public and private sectors, havecreated more opportunities for public servants to seek rewards for past favors bysecuring positions in the private sector after leaving government, to lobby theirformer departments, and to divulge trade secrets to future employers. When civilservants spent their entire working lives in the public service, such conflicts ofinterest were much less likely to occur. But in an environment in which governmentsencourage recruitment from, and movement to, the private sector, and where short-term contracts, secondments, and early retirements are common place, importantethical and organizational issues have begun to emerge. In this article, we examine aparticular aspect of managing integrity, the regulation of post-public employment inBritain and Hong Kong, with a view to assessing the effectiveness of theorganizational means of dealing with the ethical issues that have arisen and theextent to which they enhance public trust in the system.

Approaches to managing integrity

In many developed countries, there is a long-standing belief that the governmentshould be able to transmit core values to its employees so that they should beperfectly able to identify any potential conflict of interest (Brown 2005). From thisperspective, the communication of preferred values is more important than devisingexplicit rules and regulations to prevent certain types of behaviour. While thisapproach may well be the best way to manage integrity, it has become more difficultto achieve. Shorter periods of employment in the public service, the growth ofpublic-private partnerships, outsourcing, and closer relationships between govern-ment and particular industries may lead both to the emergence of new forms ofconflict of interest and inadequate exposure of employees to the core values ofgovernment. And rather than supporting central government measures to re-enforcethose values through training and socialization, public reaction to conflicts of interestoften favors introducing more rules and regulations and more punitive sanctionsagainst offenders (Atkinson and Bierling 2005).

A purely punitive approach based on legislation or regulation, however, isprobably neither possible nor desirable. First, there are problems of defining therange of potential conflict of interest situations. Some offences, such as acceptingbribes, can, of course, be legislated. But ‘soft’ conflicts of interest are often mattersof interpretation of what was in the mind of the official, or former official, and itmay be difficult to prove to the satisfaction of a court that the alleged conflict wasnot inadvertent, unavoidable or insignificant (Stark 2000: 4). Second, if rules andregulations to prevent conflicts of interest were applied to their fullest extent, itwould run contrary to other values which the government wishes to pursue. InBritain, for example, the Head of the Civil Service has advised young civil servantsthat ‘If you want to get on, get out’, an encouragement to gain private sectorexperience that could be seriously constrained by regulations designed to cover anypossibility of a conflict of interest (House of Commons 2007a:14). In Hong Kong, aproscription on civil servants taking up work after leaving government employmentwould both be contrary to present government policy and a violation of theconstitution which enshrines the right to work.

366 I. Scott, J.Y.H. Leung

Faced with the potentially conflicting objectives of encouraging the greatermovement of officials between the public and private sector and the possibility thatthis might result in undesirable ethical problems, most governments have tended tofavor a middle course which seeks to regulate the environment in which ‘soft’conflicts of interest might occur rather than the offence itself. The governments ofBritain and Hong Kong, for example, have both chosen to rely on an independentcommittee to deal with issues arising from post-public employment. Under thissystem, the committee vets applications from senior civil servants (and ministers inBritain) who are seeking employment elsewhere. If it feels that there might be aconflict of interest, usually arising from previous contacts with the future employeror from sensitive information held by the public servant, it may stipulate conditionsunder which approval to take up the appointment will be granted. These may involvea cooling-off period or a prohibition on working on certain projects or even advicethat the future appointment is not appropriate.

While the system has the advantage over legislation of adjusting recommenda-tions to individual circumstances, there are few sanctions to ensure compliance. Inaddition, the regulation of post-public employment is not integrated into a widerethical regulatory framework; rather, it is treated as a discrete activity which bearsrelatively little relationship to the individual’s other experiences in the public service.Post-public employment, could, however, be seen as part of a process which beginswith an inculcation of values which are re-enforced through training and codes ofconduct throughout the employee’s career. At the point of exit, the public servantshould be fully aware of areas in which ethical questions might be raised aboutfuture conduct. The need for regulations and sanctions would consequently bereduced. This ‘cradle-to-grave’ approach to managing integrity raises organizationalissues. Are there advantages to a more centralized system? Or does ethical regulationwhich treats potential conflicts of interest as arising in essentially unrelatedenvironments work sufficiently well to make reform unnecessary? In the followingsections, we examine these questions in relation to three issues: the extent to whichpolitical scandals have led to increased regulation and greater centralization; theextent to which the existing systems work effectively in managing post-publicemployment conflict of interest cases; and the question of what kinds of approach, ifany, are likely to enhance public trust. We argue that in both Britain and Hong Kongthere are significant pressures for greater centralization of ethical regulation that hasbeen brought about in part, paradoxically, by the new public management emphasison decentralization, deregulation and a blurring of the boundaries between the publicand private sectors.

Regulation and centralization

The post-public employment regulatory system in Britain

Atkinson and Bierling (2005) observe that demands for increased regulation ofconflict of interest issues might be seen as a process in which a political scandalgenerates ‘a new battery of rules…or amendments to existing rules’ which tend tobecome ‘increasingly complex, formal and expansive’. Eventually, however,

Managing Integrity: The Regulation of Post Public Employment in… 367

regulations can only be tightened or increased at the expense of other values orpriorities, a situation which results in a gap between public expectations and thewillingness of governments to create new rules. The public, they conclude, often hasa ‘taste for heavy-handed regulation’ while the government is as best interested inmore marginal changes.

This explanation has some relevance for the development of the regulatoryframeworks in Britain and Hong Kong. In Britain, awareness of conflict of interestproblems posed by post-public employment goes back to the 1930s. However, formany years thereafter, judgement on whether or not there was a conflict was left tothe individual public servant. The regulatory body, the Advisory Committee onBusiness Appointments (ACoBA), was not set up until 1975. It is composed ofdistinguished former politicians, civil servants and businessmen, who are unpaid andindependent of government. The primary role of the committee is to makerecommendations to the Prime Minister on applications from senior civil servantswho wish to take up appointments in the private sector and to provide advice toformer ministers on proposed future employment. The rules governing post publicemployment are intended ‘to maintain public trust in the Crown services and in thepeople who work in them’ and to avoid any suspicion of impropriety in respect ofexpectations of future employment or inappropriate use of trade secrets (ACoBA2006: 17).

ACoBA’s terms of reference and methods of operation have been re-examinedover the years, partly because of political scandals and partly because thegovernment has been trying to reduce impediments on mobility between the publicand private sector. Political scandals have had an impact on the regulations notbecause of the improper behaviour of civil servants but rather because publicconcern over the actions of ministers and politicians has resulted in increasedscrutiny of the ethical regulatory system. In 1994, after two MPs were found to haveaccepted money in exchange for asking parliamentary questions, the Prime Ministerset up the Committee on Standards in Public Life (CSPL). As part of its work, theCSPL reviewed ACoBA’s terms of reference and regulations. While it endorsed theexisting rules and methods of operation, it wanted to see more openness inthe disclosure of the recommendations on individual cases. It also expandedACoBA’s jurisdiction to include former ministers and special advisers since holdersof public office, whether politicians or civil servants, were potentially liable to beinvolved in similar conflict of interest situations (CSPL 1995: 63).

The resignation of David Blunkett, then Minister for Works and Pensions, inNovember 2005 brought ACoBA to public attention. Blunkett had previously beenHome Secretary. When he resigned from that position, he failed to obtain approvalfrom ACoBA to join the board of a company. Although it was generally concededthat the issue was whether the need to seek approval was voluntary or not, failure tocomply with the regulations was sufficient to force Blunkett to leave office. Theoutcome tended to support the view that ACoBA’s regulatory system was workingwell but it also prompted changes to the regulations with the appointment of anindependent adviser to the government on ministerial interests in March 2006 andthe promulgation of a revised ministerial code in July 2007 which made it mandatoryfor ministers to seek approval from ACoBA before taking up post-publicemployment (Cabinet Office 2007: 16, Para 7.25). In addition, in June 2007, the


House of Commons’ Public Administration Select Committee recommended thatACoBA should consider both ministerial and senior servants’ applications for futureemployment within the same committee (House of Commons 2007a:12–13).

A second source of pressure to change the regulations has come from thegovernment itself. In 2004, the Prime Minister initiated potentially radical change bycommissioning Sir Patrick Brown to produce a report on ACoBA’s future with aview to reducing the number of rules which applied to senior officials leaving theservice. The review was to take place in the context of a ‘public service that is keento encourage greater interchange with the private and other sectors which is essentialfor delivery in today’s public service’ (Prime Minister 2005). Sir Patrick dulyrecommended absorbing ACoBA into the Office of the Civil Service Commissionersand of having ‘a single test’, relating to whether ‘an individual during the last threeyears of State Service had a material influence on a decision to deliver a benefit to aprospective employer’ (Brown 2005:6). The answer to that question would be usedto decide whether an application would be approved or, alternatively, if theprospective employee should be barred for 2 years from taking up the position.

There was considerable opposition to Brown’s recommendations from pressuregroups, from members of ACoBA itself, from the CSPL and from the SelectCommittee which at the time was considering the wider issue of ethics in the publicservice. The Campaign against the Arms Trade believed that the Brown proposalswould reduce the regulation of personal and institutional links between the armscompanies and public officials (CAAT 2005). The CPSL thought that Brown’sdefinition of material interest was too narrow and that a single sanction on possibleconflicts of interest was too inflexible a mechanism to deal with the wide variety ofcircumstances relating to post-public employment (CSPL 2006a). ACoBA likewisethought that the single test was too simplistic and took exception to Brown’scontention that its ‘decisions on cases are often made on the basis of what peoplethink the public perception would be’ (ACoBA 2006:33–34). In separate testimonyto the Select Committee, a member of ACoBA, Lord Maclennan, suggested that therules might even need tightening in some areas; in his view, some civil servants heldsuch sensitive positions that they should never be entitled to take up employment inthe private sector (ACoBA 2006:37). Although the government said that it was‘attracted’ to some of the recommendations in the Brown report, it decided to leave afinal decision until after the Select Committee had completed its investigation intothe rules governing post public employment. When the Committee reported in June2007, it rejected most of Brown’s proposals including that of the ‘single test’ (Houseof Commons 2007a: 15). The attempt to loosen the regulations had essentially failed.

The Committee did, however, support the Brown’s recommendation that theChairman of ACoBA should be a Civil Service Commissioner, a recommendationmade in the context of its call for greater rationalization and co-ordination ofBritain’s 14 ethical watchdogs. In its report on Ethics and Standards, publishedshortly before its remarks on the Brown report, the Committee proposed a ‘directionof travel’ for ethical regulators which would lead to a more collegiate structure(House of Commons 2007b:40). While it did not favor a single body responsible forall regulatory functions, it clearly saw advantages in a more centralized system,proposing the creation of Public Standards Commission which would bring theethical watchdogs under one umbrella. The Committee’s position was given added


weight by the Constitutional Renewal Bill which provides that the principles andvalues of the civil services should be enshrined in law, one of the effects of whichwould be to give the Office of the Civil Service Commissioners statutory powers.The Civil Service Commissioner has said that, since the Commission is responsiblefor entry into the civil service, it would be logical that it should also be responsiblefor exit. ACoBA, however, does not see any benefits from centralizing the system. Itbelieves, to the contrary, that the regulation of post-public employment is a separateactivity from recruitment and that there are advantages to having a distinguishedindependent committee dealing with senior civil servants rather than having morejunior civil servants imposing the rules (Interview, Secretary, ACoBA 2008).

The post-public employment regulatory system in Hong Kong

ACoBA’s Hong Kong counterpart is the Advisory Committee on Post-serviceEmployment of Civil Servants (ACPE) which advises the government on the rulesgoverning the future employment of civil servants and considers applications fromall directorate level civil servants seeking private sector employment. It is chaired bya High Court judge with four other members drawn from business with a CivilService Bureau official as secretary (ACPE 2007: 2). Unlike its British counterpart,it seeks to draw largely on advice from the private sector in reaching decisions. It hasno powers to draft the regulations which it administers and no sanctions to enforcethem. Like its British counterpart, whose policies are determined by the Proprietyand Ethics Team in the Cabinet Office, formulation and enforcement of theregulations rests with the government, in particular, the Civil Service Bureau.

ACPE’s role is defined slightly differently from its British equivalent. Whileformer civil servants are not permitted to take up employment which may constitutepotential conflicts of interest with their previous service, its ultimate rationale seemsas much to prevent civil servants from taking up positions which ‘would causeembarrassment to the Government or bring disgrace to the civil service’ as it is tomaintain public trust (ACPE 2007:4). The phrase ‘embarrassment to the govern-ment’ is redolent of Hong Kong’s colonial past and is indicative of the fact thatneither the colonial government nor its successor has been interested in applyingprinciples of open government in a system in which the legislature, political partiesand the voting public play only limited roles. ACoBA has been intent on publicisingits decisions with the aim of inspiring trust while ACPE’s objective is to try toprevent scandals which might bring the government into disrepute.

Despite its preference for dealing with conflict of interest issues behind closeddoors, the Hong Kong government has been under some political pressure to tightenthe rules on post public employment and to increase the transparency of itsdecisions. The public perception that regulation can be used effectively to controlconflicts of interest has been influenced by the work of the Independent Commissionagainst Corruption (ICAC) which has very strong powers. Its considerable success inreducing corruption in the civil service has meant that, for many years, the ICAC hasbeen the institution most trusted by Hong Kong people (Chan and Chan 2006). Forits part, the government has generally been reluctant to establish a strongerregulatory framework, partly because its own senior civil servants see their futurecareer prospects adversely affected but also because it has recently been intent on


encouraging greater interaction with the private sector. The result has been acontinuing tension between sporadic political demands for tightening the regulationsand government’s search for a modus vivendi.

At its inception in 1988, ACPE was almost immediately faced with a publicoutcry when the Director of Marine left government service to take up a post with aleading shipping company (Hughes 1995). There were many similar controversialcases in the 1990s. They included a Police Commissioner, who was dissuaded fromjoining a major company as its security adviser, and at least six former Secretaries,including a former Financial Secretary, who moved into private sector positions(Hughes 1995; Yeung 1995). Hong Kong’s fused political system meant thatalthough the Secretaries were civil servants, they were also in practice de factoministers, increasing the possibilities of conflicts of interest. Throughout the 1990s,the government continued to allow a relatively unimpeded flow of high level civilservants to the private sector. In 1997, however, seventy former senior civil servantswere eventually persuaded not to establish a consultancy firm although a formerPolice Commissioner was permitted to join a private company directly after hisretirement (SCMP 1997). In the light of critical comments on these developments inthe media and in the Legislative Council, the government did slightly expandACPE’s remit in 1997.

The Committee’s terms of reference were further reviewed in 2005 following acase in which a former senior civil servant was alleged to have engaged ininappropriate lobbying. Ms Elaine Chung, who had served as Director of UrbanServices and Deputy Director of Housing, had been given permission to take up aposition with the Hong Kong Ferry Company, a company associated with theHenderson Land Development Company. Henderson was bidding for multi-milliondollar contracts for the government’s West Kowloon Cultural District developmentproject. In September 2004, the Secretary for the Civil Service wrote to Ms Chungasking her to clarify what role she had in Henderson’s bid for the contracts and,2 months later, specifically prohibited her from participating in any aspect of the bid(Legislative Council 2005a: 5). When the matter was raised in the LegislativeCouncil, Ms Chung defended her activities vigorously. She contended that there wasno conflict of interest, noting that it was 5 years since she had been involved incultural activities which more than satisfied the sanitisation period and that there hadbeen no ‘transfer of benefits’ because she had not made any decisions on projectsinvolving either the Hong Kong Ferry Company or Henderson during her time ingovernment (Chung 2004a, b). In March 2005, the Civil Service Bureau eventuallydecided that Ms Chung was not involved in a conflict of interest but warned her thatwhat she had been doing fell outside the scope of approved work.

Legislative Councillors, who had strongly criticized the existing arrangementseven before the Chung case, lodged a motion in the Council calling on the Secretaryfor the Civil Service to apologise for his handling of the case and to change ACPE’srules to increase the sanitisation period, prohibit civil servants from taking upemployment during pre-retirement leave, expand the regulation of employment toinclude Mainland China and Macau, to identify loopholes in ACPE’s work, tointroduce greater transparency on approvals and to develop a better monitoringsystem of the work of former civil servants (Hansard 2005: 4392–4466). The debatewas vitriolic. Members accused the government of ineptitude and condemned ACPE


for turning a blind eye on the implications of private sector appointments. TheSecretary for the Civil Service, in his reply, noted that the regulations had been underreview for some time but essentially conceded to the legislators’ demands (Hansard2005: 4456–4457). The motion criticising the government passed the Councilcomfortably.

When the Civil Service Bureau published a consultation document proposingreforms in March 2005, it seemed that there would be a significant tightening of theregulations (Legislative Council 2005b). The Bureau appeared to accept the maindemands of the legislators although they were subject to the outcome of discussionswith the senior civil service staff associations. The associations’ views were alreadywell known. On the day that the Legislative Council motion was debated, the HongKong Senior Government Officers Association announced that it opposed anychanges to the regulations. Subsequently, the Administrative Service Association,which included many senior civil servants, also said that it supported the existingprovisions (SCMP 2005).

When the proposals were put to the Legislative Council in November 2005, thegovernment was quick to note that the changes were ‘generally more stringent’ thanthe existing regulations (Legislative Council 2005c). The new regulations wereactually only slightly more stringent for the most senior civil servants. The controlperiod—the time during which former civil servants had to apply for permission towork—and the sanitisation period—the period before they could start work—wasreduced for officers at the lower end of the directorate scale (Legislative Council2005c, d). In addition, transparency was more equivocal than some LegislativeCouncillors would have wished. Unlike the British system, in which the dispositionof every case is clearly explained, the Hong Kong system lists the action taken in aregister, which provides only limited information on the decisions relating to the mostsenior civil servants. In August 2008, its position was further weakened when aformer Director of Public Housing, Leung Chin-man, was alleged to have a conflictof interest over his previous public responsibilities for a property development with acompany which he had subsequently been given permission to join. Although Leunghad served the sanitisation period, he had not apparently made clear to the CivilService Bureau or to ACPE that he had a potential conflict of interest. In the face ofpublic criticism, he resigned from his position with the company and the ChiefExecutive set up a committee to consider once more the rules governing post-retirement policy (Fung and Wu 2008; Chief Executive 2008).

During the Chung case, legislators depicted ACPE as relatively powerless. TheSecretary of the Civil Service was clearly held to be responsible for identifying andmonitoring possible breaches of the rules and for formulating policy to deal withshortcomings. This resulted in a difficult political situation in which the governmentstood accused of a conflict of interest by deliberating creating a weak regulatorysystem which would benefit senior civil servants when they left the service. Facedwith this kind of situation and unwilling to tighten the regulations further to satisfyits critics, the Civil Service Bureau has been left with little option but to promoteintegrity through centralised, top-down networks. In collaboration with the ICAC, ithas appointed ethics officers at the directorate level in the departments who arerequired to devise annual plans for the promotion of integrity and to relate them tospecific conflict of interest situations that might arise in the course of their


department’s work (ICAC and CSB 2007; Interview, ICAC 2008). The ICAC hasalso slightly shifted its focus from fighting corruption to promoting integrity.Corruption cases are usually prosecuted under the Prevention of Bribery Ordinancewhere the offence is defined as accepting an advantage. Since 2003, however, theICAC has also prosecuted under the common law offence ‘misconduct in publicoffice’ which has opened the door to charging those alleged to have been involved inserious ‘soft’ conflicts of interest.

Political scandals do not in themselves result in more centralized ethicalframeworks for managing integrity. But, as the chairman of ACoBA, Lord Mayhew,has observed, they do create a climate where change is possible. If, as in both Britainand Hong Kong, the government believes that it has the right mix of regulation andfreedom to take up post public employment, it will tend to resist pressures for evengreater regulation. Indeed, in Britain, the government has favored greaterderegulation rather than more rules. If this, too, is rejected, as in the case of Brownreport, options for reform may be restricted to changes which support greatercentralization such as the provision of more training in the government’s core values,the adaptation of those values to meet new forms of conflict of interest, and a moreintegrated system of ethical regulation.

Assessing the effectiveness of the regulatory systems

Do current regulatory systems provide effective checks on the new types of conflictof interest that have emerged? Are they sufficiently comprehensive? Would a morecentralized system with sanctions improve upon present practices? There issubstantial agreement that there has been an increase in the opportunities forunethical behaviour in the public service as a result of the introduction of new publicmanagement practices (Frederickson 1999). In many areas where regulatory ethicshave become an issue, greater regulation in itself need not necessarily conflict withthe underlying principles of new public management. In the regulation of the postpublic employment of civil servants, however, a central value of new publicmanagement—the desirability of increased interchange between personnel in publicand private sectors—is at odds with the idea that there should be restrictions andconditions attached to such movement.

Both ACoBA and ACPE have tried to establish a balance between thesecompeting values, placing the most stringent controls on the most senior civilservants whom, it is presumed, are most likely to be involved in conflict of interestsituations. In Britain, all civil servants are required to obtain approval within 2 yearsof leaving office before taking up any form of paid employment (ACoBA 2006: 17).However, applications are divided into three separate categories. At the most seniorlevel, applications from permanent secretaries, the top three pay bands, those with ajob evaluation score of 18 or more, special advisers of equivalent standing or wherea post reports directly to a permanent secretary or the head of a department areconsidered by ACoBA. Applications from slightly less senior civil servants arereferred to the Cabinet Office and in practice are dealt with by the Head of the HomeCivil Service (ACoBA 2006: 22). Applications from staff outside the Senior CivilService are considered by their own departments and agencies. The effect of this


division of responsibility meant that, in 2005–2006, of 604 cases, only 79 wereconsidered directly by the ACoBA committee. A further 62 cases were handled byits secretariat, 55 were dealt with by the Head of the Civil Service and 196 werereferred by departments to the Cabinet Office (ACoBA 2006:10).

The Hong Kong government has a similar system. Under the rules introduced inJanuary 2006, directorate level officials, some 1,081 people in 2006, are required toseek permission to take up future employment. However, there are differentprovisions affecting officers depending on their position within the directorate. Atthe most senior level (D8), the control period during which prior permission isrequired to take up work after leaving government is 3 years. Below the D8 level,the control period is 2 years. There are also differences in the sanitisation period,during which work is not permitted, 12 months for those above D4 and 6 monthsbelow D4. The period is normally shortened or waived if the type of work is onlynotionally remunerated. In addition, seniority affects the degree of transparency. Ofthe 56 cases considered by ACPE in 2005–2006, only 11 were above D4. In 2006,the first year that the registry was introduced, only five applications from threeformer senior civil servants were recorded, a much lower degree of transparencythan that provided in Britain (Civil Service Bureau 2007).

In both Britain and Hong Kong, the rules are specifically focused on thepossibility that an appointment might be a reward for past favors, that trade secretsmight be an issue, or that a former civil servant may have had contractual or legaldealings over tenders with a future employer (ACOBA 2006:.23; ACPE 2007: 4).ACoBA, for example, has been particularly concerned with the movement ofofficials from the Ministry of Defence into companies involved in bidding for largedefence contracts (ACoBA 2004:11–15). Both committees administer the rules inconjunction with advice which they receive from departments and the Cabinet Officeand the Civil Service Bureau, respectively, on the responsibilities of the civil servantin the last 2 years in office and whether the new position might have any connectionwith the applicant’s previous official duties. Areas in which trade secrets might beinvolved are especially difficult to regulate and both committees have been sensitiveto the need to prevent former civil servants from lobbying their old departments. Ifcivil servants set themselves up as consultants, the rules instruct departments toconsider limiting contacts with the former civil servant and to examine thepossibility that confidential information might be compromised (ACoBA 2006:25). Both committees frequently attach conditions prohibiting former civil servantsfrom lobbying for a specified period of time. The ability of the committees to imposesuch restrictions obviously depends on the information that departments collect andthat individuals provide on previous work and future employment intentions.

Despite concerns about impropriety, applications for permission to work are seldomrejected. In 2005–2006, of the 604 cases which were considered by ACoBA and itssecretariat and by the Head of the Civil Service and the Cabinet Office, 466 werepermitted to take up outside work immediately and without conditions while theremainder were allowed to do so subject to certain conditions. Most commonly, theconditions relate to the sanitisation period or to periods prohibiting lobbying, butrestraints are usually very mild. Of the 79 cases which ACoBA considered directly in2005–2006, 45 were approved unconditionally, 11 were approved with a waitingperiod and other conditions and 23 were approved subject to other conditions, mostly a


prohibition on lobbying (ACoBA 2006: 41). In Hong Kong, in 2006, of 63applications from 40 directorate-level officials, only one application was rejectedwhile 21 were approved with restrictions (ACPE 2007: 5). Of 774 applications from585 non-directorate level officials, all were approved by the Civil Service Bureau andHeads of Department although 93 had restrictions placed upon them (ACPE 2007:5).

It is generally agreed, even by critics such as Sir Patrick Brown, that ACoBAworks well and that it provides an appropriate balance between mobility with theprivate sector and the need to avoid conflicts of interest (Brown 2005). Thecommittee has been able to use publicity and transparency to good effect andprovides informal advice to senior civil servants which may lead them to changetheir minds on future employment (Interview, Secretary ACoBA 2008). Althoughthe government probably favors much more unrestricted mobility than ACoBA,there has been only one case in which the Committee’s recommendations have beenoverruled. In 2004, the Prime Minister decided, on grounds of national interest, thatthe appointment of Air Chief Marshall Sir John Day as a military adviser to BAEshould be allowed to proceed immediately; ACoBA had recommended a sanitisationperiod of 1 year (ACoBA 2004: 15, 34). In Hong Kong, by contrast, ACPE has beenperceived to be weak. On critical issues, it is the Civil Service Bureau rather thanACPE that has taken the lead. Shorn of adequate publicity for its decisions andlacking the stature of ACoBA, the Committee functions largely as an advisory bodyto the Bureau rather than as an independent organization.

Even if both committees were working well, their focus might be too restricted tomeet the kinds of problems now facing their governments. In Britain, between 2004and 2006, some 30% to 40% of senior civil service appointments came from theprivate sector (Civil Service Commissioners 2005: 25). Many of those appointedhave little exposure to civil service values and even less awareness that there mightbe constraints on their future employment (Interview, Cabinet Office 2008). TheCivil Service Commissioners have also permitted direct recruitment to the civilservice from non-departmental public bodies without going through the ‘fair andopen’ competition process, provided that the individual has originally been recruitedthrough merit procedures (Civil Service Commissioners 2005: 20). Merit proceduresmay be waived at both senior and departmental levels under conditions that include‘secondments to promote the exchange of ideas and experience’. Such appointeesare not subject to any restrictions on leaving the civil service because they are notconsidered to be part of it (Civil Service Commissioners 2005: Appendix E). Levittand Solesbury (2006) describe the treatment of recruitment of outsiders as ‘random’and observe that there is no sign that it is being seriously monitored or evaluated.The door between the public and private sector could conceivably soon revolve sorapidly that it becomes difficult to keep track of the privileged information whichmay be flowing through it. Unregulated entry and exit to middle ranking positionsmay lead to conflicts of interest at that level rather than at the senior levels policedby ACoBA.

In Hong Kong, there is as yet very little mobility from the private sector intogovernment. Promotions to senior positions are almost always internal appointmentsand are sometimes not advertised. In 2005, for example, 118 of 121 vacant posts atthe directorate level were filled by internal promotions (Public Service Commission2006: Appendix V). The problem is not that of the revolving door, as in Britain, but


rather that many public sector organizations outside the civil service are treated asthough they were part of government. Former senior civil servants are frequentlyappointed to statutory bodies and are sometimes selected by committees composedentirely of civil servants. There is no equivalent office to the Commissioner forPublic Appointments in Britain who vets recruitment to public sector bodies outsidethe civil service. Since executive positions in statutory bodies usually commandsalaries at least double that of comparable senior civil servants, it is not surprisingthat Legislative Councillors, in particular, have been highly critical of thesepractices. The government, however, seems to regard appointments to statutorybodies as part of an extended civil service fiefdom in which conflicts of interestcannot occur.

Both governments face the problem that devising and monitoring comprehensiveregulations that cover the entire gamut of the interchange of personnel between thepublic and private sector, public–private partnerships and outsourcing has becomevirtually impossible. For that reason alone, a return to the traditional practice ofseeking to inculcate core values in a top-down fashion is becoming increasinglyattractive.

Trust and centralization

In many developed countries, there has been concern about declining levels oftrust in government and what should be done about it (House of Commons2007b:13–15). In Britain, only 37% of the public trust senior civil servants (CSPL2006a, b:24). An overwhelming majority nonetheless also believe that civil servantsare not corrupt. Since this constitutes the public’s greatest concern, a relatively lowlevel of trust may still be tolerable (CSPL 2006a, b:35). Hong Kong’s trust in seniorcivil servants is slightly higher than that of Britain (Chan and Chan 2006) but thegovernment has wider and perennial problems of accountability and legitimacy. Bothgovernments would like to enhance the belief that their systems of ethical regulationare beyond reproach and that the public can be assured that civil servants will not beinvolved in conflicts of interest. In taking measures to reach that goal, assuming thatreforms are considered to be desirable, the choices seem to be to tighten regulationsor to increase efforts to enhance a culture of integrity or to do both.

The assumption that tightening regulation will enhance trust in government iswidely held. Yet, in most cases, it seems doubtful that stronger regulation doesactually increase trust in government (Atkinson and Bierling 2005; Heintzman andMarson 2005). This may vary, however, depending on what is being regulated. Incombating corruption in Hong Kong, it was possible to increase public trust eventhough the laws introduced compromised civil liberties. In the regulation of the postpublic employment of civil servants, however, there are not only the competingvalues of the right to work and the perceived desirability of greater interchangebetween personnel in the public and private sectors but also the potential forpowerful groups, such as senior civil servants and business people, to take measuresto protect their future self-interest. Under such circumstances, the regulation of postpublic employment, which is only sporadically a matter of public concern, is notlikely to contribute much to building trust in government.


The British government believes that enhancing a culture of integrity in the publicservice is more important than specific regulation. As the Select Committee puts it, a‘rule based system should never substitute for a culture of high standards, rooted inthe traditions of public life and shared by all those who participate in it’ (House ofCommons 2007b:15). A corollary of that position would seem to be that governmentshould spend more time and effort in focusing on how those values should betransmitted. Sir Alastair Graham, the chairman of the CSPL, has noted that a strongorganizational culture is a driver of increased public trust (Graham 2006). But it isquestionable whether the values that make up a strong organizational culture can beacquired, as they were in the past, largely by osmosis. The Select Committee, in itsreport on ethics and standards, suggests that greater collegiality between the variousethical watchdogs might help this process but building a culture of integrity is also aquestion of appropriate training and exposing new, and even temporary, publicservants to the core values of the service (House of Commons 2007b:35–38).

Although the Hong Kong government also takes the view that a public serviceethos is more important than regulation and does not want to further increaseregulation, it is by inclination rather more sympathetic to increased regulation thanits British counterpart. Trust is seen as a desirable by-product of a well-regulated andefficient government. This stems in part from a colonial past in which high valuewas placed on control and regulation within the civil service, from the success of theICAC in combating corruption and winning public trust, and from a post-1997government that has been even more committed to centralization than itspredecessor. Despite its commitment to regulation, when the government cameunder political pressure on post public employment, it chose only to strengthen therules marginally, principally because it also came under pressure from its ownemployees not to change them. Nonetheless, future political scandals and pressurefrom Legislative Councillors in Hong Kong could yet see the regulations furthertightened and transparency improved. At present, however, the government looks toaddress the issue of integrity by using the Civil Service Bureau and the ICAC topromote the core values within the civil service (ICAC and CSB 2007).

Conclusions

In both Britain and Hong Kong, there are significant pressures moving the ethicalregulatory systems towards a more centralized institutional form. In Britain, thegovernment’s adoption of new public management practices and a belief inderegulation has led to a situation in which mobility between the public and privatesectors, especially in middle level positions and the use of seconded personnel, couldgive rise to serious conflicts of interest. To increase regulation is not really a viableoption given the government’s intention to support greater interchange with theprivate sector. So the only alternative course of action is to rely on the public serviceethos to ensure that conflicts of interest are minimized. The logic of that implies amore centralized system, possibly on a statutory footing, which would see thepresently independent and separate ethical watchdogs interact in a more co-ordinatedmanner. The Select Committee talks of a ‘direction of travel’ along these linesalthough there is little doubt that they have a more centralized system in mind. There


will be some opposition to its proposals from those, including ACoBA, who arguethat if a system is working well there is no need to fix it, that the relationshipbetween the various regulators is tenuous, and that the situation does not warrant thecreation of an umbrella organization to oversee them.

In Hong Kong, the pressures for greater centralization of the regulatory systemhave come from conflict of interest controversies, some of which relate to changingpost public employment practices and to ‘soft’ conflict of interest situations resultingfrom public–private partnerships and outsourcing. The government has resisted callsfor much greater regulation of post public employment practices and has beenreluctant to give more independence and more transparency to ACPE. So thealternative has been to try to enhance awareness of conflicts of interest throughemphasizing civil service values and through trying to promote integrity withindepartments from the top downwards. This has the advantage of an approach inwhich senior civil servants can learn from each other about the most effective waysof promoting integrity. Its weakness may lie in an acceptance of present practicesand a failure to re-visit core values in changing times.

The centralization of ethical regulation, in itself, is unlikely to resolve theproblems which face the British and Hong Kong civil services. The problem whichprecedes a centralized, institutional solution is to identify the areas in which conflictsof interest are likely to arise. Since both governments have chosen to rely on thepublic service ethos as their first line of defence against unethical behaviour, there isthen a need to ensure that civil servants are exposed at various stages in their careersto training programmes that address conflict of interest issues. Short of such acomprehensive, holistic approach, independent ethical regulators can perform wellwithin their own terms of reference. The difficulty that both Britain and Hong Kongface is that the areas that are not regulated are where the new conflict of interestissues are emerging.

Acknowledgements We are grateful to officials in the British Cabinet Office, to the Secretary ofACoBA, and to officials in the Civil Service Bureau and the ICAC who generously gave of their time toanswer our questions. Brian Brewer made helpful suggestions for improving the text. None of them areresponsible for the views expressed here.

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Ian Scott is Emeritus Professor at Murdoch University and Adjunct Professor in the Department of Publicand Social Administration at the City University of Hong Kong.

Joan Y.H. Leung is Associate Professor in the Department of Public and Social Administration at the CityUniversity of Hong Kong.


Managing Integrity: The Regulation of Post Public Employment in Britain and Hong Kong

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