VCCI and UNDP promote business integrity in Vietnam

November 14, 2019 | 11:48
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Combatting corruption was a big challenge for small and medium-sized enterprises in many countries, especially in Vietnam where 98-99 per cent of enterprises fell into that bracket, said Vu Tien Loc, president of Vietnam Chamber of Commerce and Industry (VCCI), at a workshop in Ha Noi on Wednesday.
vcci and undp promote business integrity in vietnam
Vu Tien Loc, president of Vietnam Chamber of Commerce and Industry, and Caitlin Wiesen, UNDP Resident Representative in Vietnam, present certificates to business associations that have committed to joining the Business Integrity Pledge.-VNS Photo Khanh Duong

Small and medium-sized enterprises were vulnerable to corruption, and while the losses to society as a whole were small, they hit those businesses hard, he said.

“Five million household businesses makes Vietnam a ‘fertile land’ for petty corruption. However, this could be prevented by strengthening governance and creating conditions for this sector to thrive,” Loc said.

According to the Organisation for Economic Co-operation and Development, spending on corruption accounted for up to 50 per cent of Gross Domestic Product worldwide, equivalent to about US$2.6 trillion. The World Bank estimated that $1 trillion was paid each year in bribes, Loc said.

“These are huge numbers. Corruption puts a burden on the business sector’s expenses and destabilises enterprises.

“Corruption leads to less effective public budget allocation. In developing economies like Vietnam, corruption also affects allocation of land, natural resources and other resources.

“The consequences of corruption in developing countries are much more serious than in developed countries,” he said.

In recent years, ethical violations in the business sector had eroded trust among investors, customers and employees. Bribery cases that had been taken to court had signalled a warning about this issue, he said, adding that corruption and bribery “destroyed the business climate, led to ineffective mobilisation of resources and affected trust among stakeholders”.

“Losing trust is the biggest loss in all economies,” he told the workshop.

Caitlin Wiesen, United Nations Development Programme (UNDP) Resident Representative in Vietnam, said according to the Vietnam Provincial Competitiveness Index 2018, more than half of the companies surveyed reported paying “informal charges”.

“One of the key new aspects of the Vietnamese revised Law on Anti-corruption is the expansion of its scope to the private sector. This demonstrates the intention of the Vietnamese Government to combat corruption in all areas of society and implement the requirements of the UN Convention Against Corruption. We need joint efforts from the Vietnamese Government and the business community to effectively implement this new law.”

As Vietnam is fast integrating into the global and regional economy, the role of the business sector in preventing corruption is urgently important. Promoting a level playing field for businesses requires an effort not only on the part of the Government but also on the part of companies and other stakeholders to “put their houses in order” and participate in collective action in the region, she said.

To help businesses implement the new Anti-Corruption Law, the UNDP and VCCI have developed a business integrity pledge for business associations. With this pledge, business associations commit themselves to promote business integrity and encourage their members to comply with the 2018 Anti-Corruption Law. The VCCI has reached out to potentially interested business associations in Ha Noi and HCM City to encourage them to take the pledge.

Loc from the VCCI said to combat corruption, the VCCI had set up a set of tools to enhance business governance capacity and assist them, especially micro, small and medium-sized enterprises, with digital transformation. About 100 business associations nationwide were key partners to form a network to support enterprises for this project.

At a workshop entitled “Enhancing Business Sector Engagement Through Integrity Pledge Co-operation” on Wednesday, eleven business associations in Hanoi and HCM City signed the Business Integrity Pledge to uphold the core values of integrity, ethical behaviour and accountability. They will be given guidance to build action plans.


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