By Luisa Murphy.
As a former employee of the United States Department of Justice Antitrust Division, I worked on corruption cases involving companies accused of both collusion and bribery. However, when these cases crossed borders, enforcement of US laws became particularly challenging. It also raised questions about the relevance of US Federal laws in regions of the globe such as Asia where different ‘national business systems’ (Witt & Redding, 2014) prevail. Today, through my PhD studies on the institutionalization of CSR, I find myself considering some of these same questions informed from the vantage point of the Association of Southeast Asian Nations (ASEAN).
Corruption in ASEAN
As with other areas, the ASEAN region has not been immune to the effects of corruption involving national, regional and transnational actors. One need look no further than the recent UK Rolls-Royce bribery scandal (which was settled for £671m) and moreover, implicated Thai Airways for taking bribes. The front page scandal involving the discovery of $1 billion dollars in Malaysian Prime Minister Najib Razak’s personal bank accounts which was allegedly taken from the state investment fund 1MDB has also directed attention to the region.
Thus, it is no secret then that the ASEAN region, in common with others around the globe, suffers from corruption issues and that this presents a major challenge to its socio-economic development. For instance, in 2015, Transparency International reported that ‘rampant corruption across the region threatens to derail plans for economic integration’ (Transparency International, 2015), while 7 out of 10 countries in ASEAN ranked 40 or under (100 is a perfect score) in Transparency International’s 2016 Corruption Perceptions Index. As a result, international, regional and national organizations have rallied together to confront these issues. And although the region still may be experimenting with different approaches, there appear to be a few distinctive ASEAN strategies which are taking hold and may very well, provide informative lessons for the future. A recent conference in Singapore organized by the ASEAN CSR network (a regional hub and leader on CSR issues which connects international, regional and national networks), brought a few takeaways to the forefront.
Triggering business integrity
Elements of hard law may be an important tool in inducing adherence to international soft-law frameworks such as the United Nations Global Compact (UNGC)’s 10th principle on Anti-Corruption, Goal 16.5 of the 2030 Agenda for Sustainable Development and the ISO37001 anti-bribery management system among others. For instance, one company executive who participated in the Singapore conference captured the applicability of hard law enforcement approaches in relation to other CSR issues e.g. health and safety standards, by noting that workers in one country in the region didn’t take compliance seriously until they were fired for not wearing safety hats. This resulted in ‘triggering’ compliance with health and safety standards thereafter. In the case of Singapore, prohibitions such as littering in public places, jaywalking or chewing gum on the street have been particularly effective in engendering behaviors which need not be enforced in the long-run. Thus, an approach which utilizes elements of hard law in conjunction with binding international frameworks such as United Nations Convention against Corruption and the UK Bribery Act as well as regional frameworks (e.g. ASEAN 2020) may be an effective means to trigger adherence to soft law frameworks in the future.
Culture as an opportunity and not an excuse
Corruption is not necessarily an ASEAN region cultural problem per se and certainly many positive aspects of the regional culture can be harnessed to fight corruption. While gift giving in the form of bribes may have previously been (or in some cases currently) is a ‘cultural norm’, it can also be argued that many companies operate with a spirit of business integrity. Although, it would be naive to say that the ethos of business integrity is inherent in every company, behavior and culture are different, and issues of corruption may be related to governance issues or other factors rather than ‘culture´ itself. Notwithstanding this, cultural norms such as the fear of ‘losing face’ have reportedly been successfully employed in efforts to pressure CEOs into implementing anti-corruption initiatives. The Thai Collective Action Coalition (CAC) is one such example of a private-sector initiative which has been particularly successful in combating corruption in Thailand, perhaps because it reportedly operates with a mindset which utilizes international frameworks such as Transparency International’s UK (TI-UK) Adequate Procedures Checklist while tapping into ASEAN cultural norms of e.g. ‘losing face’ to ensure that Thai CEOs join the initiative. Therefore, energies in the future might focus on norms which are counter to corruption rather than daunting conceptualizations of assumed ‘cultures’ of corruption.
Youth and SMEs as engines of business integrity
Finally, approaches to combating corruption are increasingly focusing on youth and SMEs and using them as indicators for progress on the issue. In the ASEAN context, this has meant mobilizing and providing resources which can contribute to business integrity among the youth population and also small and medium- sized enterprises (SMEs). While this may seem like a ‘no brainer,’ ASEAN countries and international organizations are still clarifying their approaches. For instance, whether there will be enough ‘trickle-down’ from top-down approaches which deliver e.g. training via multinational corporations (MNCs) or whether a bottom-up approach is necessary is still being debated. Moreover, while the youth of many ASEAN countries have good intentions, they are often derailed due to economic or familial concerns. For instance, a 2014 Transparency International report indicated that while honesty is more important than wealth to 94% of the youth in Vietnam, 41% are “willing to lie for the sake of family income or loyalty to family.’ (Transparency International, 2014). Despite these figures, we should remain optimistic given the integration of youth into CSR activities and the overall focus on reaching SMEs in the region (topics for another blog).
In conclusion, only time will tell how ASEAN triggers business integrity, uses culture as an opportunity and mobilizes youth and SMEs in the battle against corruption. I, for one, see promise in these developments and ideas which might just become part of the ASEAN way.
Luisa Murphy is PhD Fellow at Copenhagen Business School and supported by the VELUX Endowed Chair in Corporate Sustainability. Her research examines the governance of corporate social responsibility. She brings a human rights and business background from the University of Oxford and legal experience from the Antitrust Division of the United States Department of Justice.