Last updated: Wednesday, April 24, 2019


Business Integrity Initiative: From Awareness to Action

Posted: Thursday, March 29, 2018

“Building business integrity has become one of the most important factors in improving the business environment so that businesses can move towards global value chains.”

The consultation workshop on promoting business integrity initiative in Vietnam: From awareness to action was held by the Vietnam Chamber of Commerce and Industry (VCCI) in coordination with related agencies in Hanoi on March 21. The event aimed to share, discuss and consult stakeholders’ comments on some key findings of the draft assessment report on collective initiatives for promoting business integrity. The report is the result of a collaborative research effort conducted by VCCI's Business Office for Sustainable Development and a team of experts including Brook Horowitz, CEO of IBIF Global.

Critical needs for better business environment
In the process of international economic integration, businesses need to improve their competitiveness and deepen their participation in global supply chains. More and more research confirms that acting on principles of integrity is a prerequisite for businesses to grow sustainably, to preserve and to promote their core values. A company wishing to join the “global playground” should not only ensure compliance with laws of the country where it is established, but also comply with international law and regulations of foreign business partners, especially multinational corporations.

Speaking at the workshop, VCCI President Vu Tien Loc said, “At the Government Online Conference with localities on December 28, 2017, the Prime Minister set the guideline of action in 2018: Discipline, integrity, action, creativity and efficiency.” At the 2018 Vietnam Economic Scenario Conference themed “Breakthrough opportunity for business growth”, VCCI collected opinions from 400 businesses, of which up to 50 per cent of respondents said what they needed is action, but the biggest challenge to the government is integrity.

Corruption is a drag on economic development of Vietnam relative to other Southeast Asian countries. According to the Vietnam Provincial Competitiveness Index (PCI), the rate of companies paying “unofficial fees” increased from 50 per cent in 2013 to 64 per cent in 2014 and stayed unchanged at 66 per cent in 2015 and 2016.

According to another study by the Centre for Social Governance Research (CENSOGOR), business trust in corruption detection and punishment in Vietnam is very low. A majority of small and medium-sized enterprises (SMEs) participating in the VCCI-led “SME Guide to Resist Corruption” sub-project in 2016 - 2017 said that corruption is a “serious problem”, a “destructive force in business environment” and a “never-stop thing once started.”

Not only that, Vietnam ranked 81st in morality and corruption and 109th in informal payments and bribery among 137 countries, and corruption was considered the third hardest difficulty in doing business in Vietnam, according to data from the World Economic Forum. In the 2017 Corruption Perceptions Index released by Transparency International, Vietnam ranked 107th among 180 countries and territories surveyed.

VCCI President Vu Tien Loc affirmed that businesses are both victims and agents in the fight against corruption. Thus, building business integrity has become one of the most important needs in improving the business environment so that businesses can move towards global value chains, as corruption and bribery not only negatively impact the sustainable development of the business and increase operating costs, but also discourage the will of many from keeping their core values of integrity as the foundation of long-term development.

Many recommendations for government and business
According to Ms Nguyen Thi Kim Lien, a senior integrity expert, bribery, facilitation pay, more than usual kickbacks, incentives in contract signing, and conflicts of interest are existing behaviours of corruption in business.

Speaking at the workshop, many delegates said that anti-corruption is a complicated issue that requires many actors to act together. Recommendations centre on facilitating collective efforts of businesses, business associations, governments and non-governmental organisations to make substantive changes to business practices.

An underlying recommendation is that the business community and the government need to work out an action plan to increase the involvement of the business community in the coming period to help realise Resolution 126/NQ-CP dated November 29, 2017 of the Government on launching the Governmental Action Plan on Corruption Resistance until 2020.

On the government side, in order to improve Vietnam's rankings on global indicators, anti-corruption should be given further precedence.

On the business side, strengthening institutionalisation and enforcement of the OECD Anti-Bribery Convention in other countries such as the United States Foreign Corrupt Practices Act, the United Kingdom Bribery Act and similar laws in other nations is putting real pressure on foreign investors or business partners with those in Vietnam to seriously execute corporate compliance programmes of their parent companies. Accordingly, business partners who are Vietnamese must also meet anti-bribery requirements, depending on the level of engagement in business transactions.

At the same time, making strategic documents and action plans requires building a framework, network and organisation to carry out these policies. Their successful outcomes and lessons will be shared for broad application.

Thu Ha

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