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Legal framework on anti-corruption responsibility of businesses in Vietnam
Legal framework on anti-corruption responsibility of businesses in Vietnam
11/8/17
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 ]
Each State Party shall take appropriate measures, within its means and in accordance with fundamental principles of its domestic law.
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.
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.
The first half of 2016 saw Vietnam’s fight against corruption gain new momentum.
For years, the police and the judiciary have emerged as the sectors most affected by corruption.
Vietnam’s ‘system fault’ is caught in the reform dilemma between economic liberalisation and political democratisation.
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.
Those who commit an act of corruption should face administrative or criminal penalties no matter who they are and what position they hold.
Party members who have shown signs of corruption and waste should be deprived of their current post although their wrongdoing has not been confirmed.
Properties obtained through corruption should be confiscated. Organized corruption should be harshly dealt with.
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