Governments and private sector come together to fight business sector corruption in ASEAN countries

Posted on 21 March 2016

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The U.S. - ASEAN (Association of Southeast Asian Nations) summit held this February in California confirmed the importance of the Southeast Asian region for the U.S. and constituted a decisive opportunity for the ASEAN countries to demonstrate their efforts in tackling regional challenges. Among these, corruption in the business sector is a crucial issue: economic integration is one of the key priorities of the Plan of Action to implement the ASEAN - US Strategic Partnership 2016-2020, but high levels of corruption in the countries of the region constitute a serious impediment for foreign investments and businesses. According to PwC's Global Economic Crime Survey, corruption is one of the biggest issues for private companies due to the number of business processes it threatens: sales, marketing, distribution, payments and international expansion, just to name a few.

The pervasiveness of corruption in the private sector is confirmed by corruption surveys conducted in the East Asia and Pacific region: in 2010-2016, 38.9% of firms experienced at least one bribe payment request and 48.9% of firms were expected to give gifts to get a construction permit (while the share of firms expected to provide favors to get an operating license, an electrical or a water connection ranges between 32 and 39 percent).

This is why it is crucial for Governments in the region to develop an effective strategy against corruption and bribery in the private sector and at the interface between private and public sectors. In order to be truly effective, such strategy must be built on the joint action of States, private sector and civil society. With this in mind, UNODC supported the signing of a Memorandum of Understanding between the ASEAN Corporate Social Responsibility Network (ACN) and chambers of commerce in the region that will pave the way towards the development of a private-sector-led strategy against corruption in the ASEAN business community. The agreement created the "Regional Working Group on Promoting Business Integrity in ASEAN" which aims to mainstream the private sector collective action against corruption concept among its members.

The UNODC has also supported a number of regional events aiming to enhance the business community's and anti-corruption authorities' understanding of corruption in the private sector and of issues such as foreign bribery and liability of legal persons, together with the related requirements of the UNCAC.

Working with national anti-corruption institutions on this matter is also a priority. For instance, UNODC is part of the Thailand National Anti-Corruption Commission's Sub-Committee responsible for producing an Anti-Corruption Compliance Guidance for Private Sector, which should help the development of business integrity following an inclusive public-private dialogue approach.

In terms of the next steps, the UNODC in Southeast Asia will keep up its engagement for the promotion of business and government joint action against corruption. The mandate of the Organization in this area has been recently reinforced: promoting private-public partnership against corruption was one of the issues debated at the Conference of State Parties to the UNCAC, held in St. Petersburg in November 2015. The Conference discussed the status of implementation of the Private Sector Resolution adopted in 2013: the resolution urged State parties to promote the engagement of the business community in the prevention of corruption and highlighted the need to implement appropriate anti-corruption ethics and compliance programmes within the private sector.

On these bases UNODC in Southeast Asia will keep on supporting the review of the existing legislation on private sector corruption, foreign bribery and corporate liability as well as capacity building activities of all major stakeholders. At the end of March 2016 a meeting of the mentioned Working Group on Promoting Business integrity in ASEAN will decide on the next steps to be taken jointly with our partners.

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