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VCCI News

Last updated: Tuesday, December 11, 2018

 

Fostering Integrity in Business

Posted: Tuesday, September 25, 2018

In Vietnam, some companies have adopted measures to build corporate governance systems and compliance policies towards international practices, such as Vinamilk, which issued its Code of Conduct in 2009 when it prepared for share listing on the Singapore Securities Exchange. Vinamilk scored a maximum 100 per cent of Organisational Transparency (OT) among the Top 30 largest companies in Vietnam, according to the Transparency in Corporate Reporting (TRAC) launched by Transparency International in 2017. Nonetheless, Vinamilk scored only 38 per cent of Anti-Corruption Programmes (ACP).

According to the “Fostering Government-Business Integrity Action in Vietnam: From Awareness to Action - Recommendation Report” - GBII by the Vietnam Business Council for Sustainable Development (VBCSD) under the Vietnam Chamber of Commerce and Industry (VCCI), there is no general assessment of the performance of compliance programmes at large Vietnamese companies, but official survey data show that corruption is still rampant.

Large-scale Vietnamese businesses that have invested overseas or attracted capital from foreign investors are more aware of compliance and anti-bribery regulations according to good international practices.

Improving compliance and integrity is not yet a priority for Vietnamese enterprises, especially small and medium ones, because they think they have to deal with other challenges in day-to-day business. In previous anti-corruption support activities, small and medium-sized enterprises (SMEs) expressed concern about risks from whistle-blowing corruption and lacked resources to address bribery solicitations. Many believe that corruption is unavoidable in the current business environment in Vietnam. Some say they have no choice but accept it to continue their business. There are no records of assessments or surveys showing that SMEs which used to benefit from training programmes supported by VCCI or other organisations have applied or deployed what they had learnt to corporate management.

In addition, it is said that underdeveloped corporate governance systems at Vietnamese enterprises created opportunity for wrongdoings. This remark is illustrated by the lowest ranking of Vietnam among six ASEAN countries (Indonesia, Malaysia, the Philippines, Singapore and Thailand) according to the ASEAN Business Governance Ratings Report 2013-2014 released by the Asian Development Bank (ADB). Some organisations, including VCCI, Foreign Trade Offices, VBF and TT, conducted training courses to build capacity and encourage business integrity in Vietnam. However, in practice, there has been no assessment or measurement of impacts to date. In spite of incomplete statistics, it is commonly perceived that impacts of these activities relating to behavioural changes are quite limited, both in depth and width.

Fighting against corruption is a complex issue requiring many stakeholders to work together. The Government-Business Integrity Initiative (GBII) Report said, the business community and the government need to develop action plans to increase the involvement of the business community in the coming period to achieve Resolution 126/NQ-CP of the Government dated November 29, 2017 on the promulgation of the Government Action Plan to fight corruption until 2020.

On the government side, to improve Vietnam's rankings on global indicators, anti-corruption must be given greater priority, to perfect the Anti-corruption Law.

On the business side, strengthening institutionalisation and enforcing regulations of the OECD Anti-Bribery Convention in countries like the Act of Combating Bribery of Foreign Public Officials of the United States (US), the Bribery Act of the United Kingdom (UK), and similar laws in other countries are placing actual pressure on foreign investors or business partners with companies in Vietnam to seriously adhere to corporate compliance programmes of their parent companies. Accordingly, business partners which are Vietnamese entities must also meet anti-bribery requirements, depending on the level of engagement in business transactions.

At the same time, compiling strategic documents and action plans needs to build a framework, network and organisation for carrying out these policies. Results and successful lessons will be shared for broad application.

The “Fostering Government-Business Integrity Action in Vietnam: From Awareness to Action” Report is attributed to a joint effort between the Vietnam Business Council for Sustainable Development (VBCSD) - VCCI, and an expert team including Madam Nguyen Thi Kim Lien - senior business integrity specialist and Mr Brook Horowitz, General Manager of IBLF Global.

GBII, launched in September 2018 with a long-term vision to 2025, will be carried out over three years and make annual plans. The roadmap will be phased to ensure sustainability. Recommendations will be made for major works. Each work may be undertaken by a lead agency with financial resources sought from various sources. GBII will be jointly carried out by VCCI and the Government Inspectorate and joined by representatives from relevant ministries and business leaders to manage GBII (called the Initiative Leadership Team). This leadership team will review and approve the GBII Action Plan and report to the Deputy Prime Minister every six months.









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