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Bribery and corruption may pose the greatest threat to global businesses because of the number of business processes it threatens. Sales, marketing, distribution, payments, international expansion, expense reimbursement, tax compliance, facilities operations are all vulnerable processes.
PWC Business Report 2013
Tackling the endemic practices of graft and financial corruption in businesses, particularly in developing countries was the key theme of a Asia Regional TI business Integrity Workshop held in mid-March 2014 in Kuala Lumpur hosted by the TI Malaysia in collaboration with the TI Secretariat.
Asia Business Integrity Workshop Participants
TI chapters from Colombia, Malaysia, Mongolia, Cambodia, Vietnam, the Philippines, Australia and New Zealand gathered with the TI Secretariat to review progress on the TIS international drive to implement the BIS work and to prepare a Business Integrity framework for future actions for TI chapters
There was a clear commitment to challenge official and business corruption and bribery from the highest levels of government to grass roots organisations. The workshop affirmed the current set of business integrity tools available from TIS as an important resource, including online resources. These are important aides for businesses who wish to ensure longevity and brand reputation, especially in emerging markets.
Fuimaono Tuiasau of Transparency International New Zealand presented the findings and recommendations of the Business Chapter of TINZ 2013 NIS Report. Fuimaono spoke about some good recent developments in transparency and accountability in corporate finance, banking, and the expansion of the NFP sectors in NZ, which could explain NZs high ranking in the Corruption Index Survey. There were also other indicators to support NZs position which included the recently released international justice survey.
Asia Business Integrity Workshop
But Fuimaono also warned about emerging business challenges in NZ which needed to be addressed. These include the extreme ease in which companies could be registered, the accuracy of information on majority overseas control of New Zealand companies, business dealings with overseas markets and business practices there, the black market economy in New Zealand and money laundering.
The harmful effects of business corruption and financial cannot be underestimated. Forbes Magazine has said ‘It’s a sad quantitative fact that bribery runs so rampant in the world. A July 2013 report from Transparency International finds that more than one in four people paid a bribe in the past year, based on a survey of 114,000 respondents in 107 countries. The World Bank estimates that the equivalent of $1 trillion is offered in bribes every year.’
This puts many business ventures constantly at risk and gives South East Asian nation states challenges in the drive in promoting itself as a good place to do businesses. The activities of corrupt officials and the value chains being frequently exposed to bribery and sharp practices on a daily basis include ‘Facilitation’ payments, ’business consulting services’ and paid for ‘Letters of Support’ from officials and corporates permeates many aspects of business practices. The costs are enormous.
However, the workshop showed real progress is occurring with major changes coming from a broad range of sectors and leaders. The workshop included presentations for Malaysian government officials from the Prime Minister’s office to the legal counsel from the Department of Commerce presenting the government agenda and actions to make doing business in Malaysia simple and transparent. Dr Mark Lovatt of Malaysia TI explained that impetus for TIM work is now delivering a package of business integrity workshop and tools to businesses and start-ups and to government agencies. TI Malaysia work was strengthened when its CEO was elected as a government MP and then appointed the Minister of Governance, Accountability and Human Rights. The newly elected government campaigned on a strong anti-corruption platform and there is an increase in public intolerance is also being expressed through media and business disclosure, high profile court cases, and the ever increasing numbers of young tech savvy business and law graduates and entrepreneurs who want to see change.
The Catarina Cadavid from TI Colombia outlined their Business Integrity Services being delivered by engaging with government and business leaders in developing a range of business integrity services and tools for their sectors.
Other TI chapters reported on their activities with many positive impacts from even the smallest TI presence in the chapter countries. It was reported that even in the powerhouse economy of China there were fewer graduates joining the once hallowed public service since the official crackdown on bribery and corruption. Mongolia’s business and political leaders are being exposed to pressure to opening up access to it rich natural resources. The costs are being borne by its people who see little benefit or improvements in government services in education, health and social services while there is growth of enclaves of new rich elites. Mongolia expressed strong interest in New Zealand’s NIS Assessment report.
TIS Business Integrity System(BIS) is a major contribution to international and national businesses who wish to ensure their practices across the value chain is based on business integrity and corporate responsibility to ensure there is longevity and being prosecution free.