Legal framework on anti-corruption responsibility of businesses in Vietnam

11/08/2017
Enterprises, business associations and professional associations play a very important role in anti-corruption work. These entities frequently use public services, and they may influence the “health” of the economy. Over the past few years, enterprises have not only been the “victims” of corruption, power abuse and harassment caused by persons with higher positions and/or power, but also the “cause” of corruption. Many enterprises seek to give bribes to public cadres and civil servants in order to obtain certain business or profit making advantages.
According to the Report on Provincial Competitiveness Index, the number of enterprises that paid unofficial charges increased over the years, from 50% in 2013 up to 64.5% in 2014 and 66% in 2015-2016. Enterprises themselves are also exposed to potential risks of their employees committing corrupt acts, abusing their positions and delegated powers to make personal gains or cause loss of enterprise’s assets.
In order to effectively tackle corruption, it is necessary to have active and proactive participation from all society actors, especially the business community.
What to do to promote the role of businesses in fighting corruption?
For the Government:

Affirming and promoting the role of enterprises in anti-corruption work
Fighting against corruption is not only a responsibility of enterprises, rather enterprises play a very important role in promoting an effective fight. Therefore, the AC Law should include provisions to highlight the important role of enterprises (as well as of other social actors) in this fight and, at the same time, adopt policies to create favorable conditions for businesses to promote their roles in practice. These provisions would contribute to the change of citizen’s perception since a number of citizens still think that combating corruption is a mission of state agencies.
Supplementing the Law on Enterprises with provisions on how to handle contracts signed between SOEs and enterprises in which the chairman, members of the Boards of Members and related persons are owners/shareholders/capital contributors 
For joint-stock companies, such contracts must be approved by the GMS or BOD. SOEs are usually single-member limited liability companies. For example, if a company has only a chairman (with no Board of Members) and the company enters into a contract with another enterprise in which the chairman is the owner/shareholder/capital contributor, how should the procedure of approval be regulated in this case? This issue needs to be clarified and specified in LOE.
Considering the extension of the scope of assets to be declared; diversifying methods to verify assets origin and forms of asset declaration disclosure  
To prevent persons with the declaration obligation from concealing and dispersing assets to their relatives, it is necessary to extend the scope of declared assets, including assets and income of parents and adult children of declaring persons.
A proposed option would be to declare only the assets which are originated from persons having declaration obligation (to cover circumstances where declaring persons transfers their assets to parents and adult children) or assets which are related to those with the declaration obligation (to cover circumstances where corruption-related assets are transferred to parents and adult children of persons with positions/powers). If so, a definition should be given to the concept of “assets originated from or related to persons with the declaration obligation”. This will raise higher requirements for verification and justification of the assets origin. Therefore, it is needed to have a specialized professional department/agency to verify the declarations in SOEs.

According to current regulations, verification is only carried out in certain cases. The urgent need of the fight against corruption requires verification of asset declarations to be conducted on a regular basis and is a mandatory step, but it only needs to be done for certain leading positions due to the large amount of work and limited resources. Besides, random verification of other declarers should also be taken into account.
Public disclosure of asset declarations should be done in a more flexible way. Apart from being posted at the head offices of enterprises, asset declarations can also be posted at regular workplaces of declaring persons if they are different from the head offices.
Requiring businesses to build an internal control mechanism
The law should require the establishment of an internal control department in certain types of enterprises, or at least in SOEs. This demand has been included in the draft amended AC Law “Enterprises have responsibility to include in their charter or operation regulations provisions on internal control in order to prevent conflict of interest and handle embezzlement, bribery, abuse of position/power and other corrupt acts.”
Issuing clear regulations on enterprises’ right to notify corrupt acts
As analyzed above, the current AC Law has recognized the right to “notify” of enterprises but no specific regulations for the implementation. Hence, it is necessary to supplement provisions on the mechanism and process to enable enterprises to proactively exercise their right to notify corrupt acts and specify the responsibilities of state agencies to receive and respond to such notices.
For businesses:
Proactive disclosure and transparency in their operations
Proactive disclosure and transparency by enterprises are very important, bringing about huge benefits to enterprises. Transparency will help increase productivity, gain partners’ trust and strong commitment of employees, attract more partners and customers and contribute to sustainable development of companies. According to a survey, 48% respondents are willing to pay more to buy goods from a company that is clean/corruption free.
Developing and publicizing anti-corruption programs
Enterprises should realize the importance of anti-corruption programs and proactively develop their anti-corruption programs. In addition to internal control regulations and code of conduct, anti-corruption programs may include policies on gifts, hospitalities and prohibition of facilitation payments. By publicizing anti-corruption programs, companies express their commitments to fighting against corruption to state agencies and their partners.
Enterprises need to realize the importance and necessity of the internal control mechanism and establish regulations and procedures for internal control aiming at preventing and combating corrupt acts inside and outside enterprises. At the same time, enterprises should proactively improve the structure of the Supervisory Board and internal audit and enhance the capacity, expertise and independence of members of the Supervisory Board and internal audit.
Conducting anti-corruption communication and training for employees
In order for anti-corruption policies and regulations of the Government and of businesses to be applied and implemented effectively, companies need to organize communication programs and training for all staff levels including senior leaders, supervisory staff and employees in the organization to provide information and guidance for implementation of these policies and regulations.
Actively participating in collective actions
An enterprise can participate in the fight against corruption at three levels: (i) within enterprises, (ii) in relationship with partners, and (iii) within business environment.
Within enterprises, they can develop and apply anti-corruption programs as one of the most effective measures to protect companies from corruption risks, reduce unofficial charges or legal consequence as well as reputation risk caused by corruption. For example, having policies on prohibiting facilitation fees, conflict of interest, gifts; carry out annual assessment on corruption risk.
Companies should disseminate anti-corruption policies to their partners and other stakeholders, such as clients and intermediaries.


Within the business environment, enterprises should actively join collective action to promote business integrity and create a healthy business environment. Members joining such initiatives will learn from each other, share experience and spread knowledge of business integrity, start action and inspire other companies to apply international standards.
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All comments [ 10 ]


MaskOf Zero 13/8/17 21:15

Each State Party shall take appropriate measures, within its means and in accordance with fundamental principles of its domestic law.

Love Peace 13/8/17 21:16

After ten years since the adoption of the Anti-corruption Law, the Vietnam Fatherland Front and its member organizations have conducted many legal dissemination activities and educated integrity for people.

yobro yobro 13/8/17 21:17

In the last 5 years, communications on anti-corruption have been pushed up, the frequency and volume of information is enormous, forms is diversified and constantly renewed.

Jane smartnic 13/8/17 21:19

The first half of 2016 saw Vietnam’s fight against corruption gain new momentum.

LawrenceSamuels 13/8/17 21:20

For years, the police and the judiciary have emerged as the sectors most affected by corruption.

Gentle Moon 13/8/17 21:21

Vietnam’s ‘system fault’ is caught in the reform dilemma between economic liberalisation and political democratisation.

John Smith 13/8/17 21:24

The Party Central Committee’s Inspection Commission has renewed efforts to fight corruption, saying violators should face due punishment no matter who they are and what position they hold.

Only Solidar 13/8/17 21:25

Those who commit an act of corruption should face administrative or criminal penalties no matter who they are and what position they hold.

Pack Cassiopian 13/8/17 21:26

Party members who have shown signs of corruption and waste should be deprived of their current post although their wrongdoing has not been confirmed.

Deck Hero14 13/8/17 21:27

Properties obtained through corruption should be confiscated. Organized corruption should be harshly dealt with.

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