In the first part of this conversation with Unravel, Francesco Checchi, Anti-Corruption Adviser at the United Nations Office on Drugs and Crime (UNODC), spoke about the pandemic’s impact on corruption, the potential for increased corruption at various stages of vaccine procurement and delivery, and steps being taken by governments in Southeast Asia to limit corruption.
In this second part, he talks about the effectiveness of legal frameworks that have been instituted to arrest corruption, and the ways and means adopted to mitigate the effects of this menace. Mr Checchi also shares his insights on whether ASEAN countries can launch a collective offensive against corruption.
Unravel: Countries in the region have created legal frameworks to counter corruption. Do you expect these to be effective?
Francesco Checchi: The effectiveness of anti-corruption legal and regulatory frameworks depends upon many factors. First, there must be an overall conducive environment to make sure that legal frameworks are seriously implemented. And then, we need implementation capacities and resources at various levels of public administration, an effective criminal justice system and the participation of all actors in society, effectively making it a very complex development process.
I must say that since I arrived in the region, in 2015, I have seen a lot of improvements that I think will bear fruit in the coming years. For example, Thailand, Malaysia and Indonesia have introduced the liability of legal persons for corruption, making it possible to prosecute private firms and fine them for engaging in corrupt practices. They have also developed programmes reaching out to the business community to promote compliance and to prevent facilitation payments and kickbacks.
Unfortunately, bribery—particularly to win public contracts—is still very common in the region. But I am sure the business community is taking note of these developments and the situation will improve.
Corruption hampers fair competition, creates obstacles to doing business and erodes the profit margins of companies. So, I’d say it is a rather big problem.
Another example is constituted by measures taken by several countries for enhancing transparency of beneficial ownership of companies. This is a fundamental tool to prevent conflict of interests and address money laundering. Indonesia, the Philippines, Malaysia and Myanmar have all introduced stricter requirements to produce information on beneficial owners when registering companies. Other countries will follow suit in the near future. This is also because it is a requirement in context to money laundering frameworks of the UN Convention Against Corruption and other international standards.
On the investigation side, cooperation among regional law enforcement agencies has improved. There is now faster and more direct police to police information sharing for recovering proceeds of crime transferred abroad, or for apprehending fugitives.
Unravel: What additional measures ought to be put in place to mitigate corruption in Southeast Asia?
Mr Checchi: It is a difficult question because the situation varies a lot from country to country. However, some observations can be made if we look at the results of the implementation review of the UN Convention Against Corruption. The reviews are conducted on a peer-to-peer basis among countries that are party to the Convention. They also contain information on implementation levels of the convention both in law and in practice. The reviews also outline specific recommendations to address the shortcomings identified.
On the issue of criminalisation of corruption, one of the major shortcomings relates to the need of criminalising active bribery of foreign public officials. This is bribery paid by companies to obtain a business advantage, mostly when operating in foreign countries. Most countries in the region are not compliant with the UN Convention Against Corruption. From this point of view, it is an issue that may create unfair competition with companies that instead have to adhere to strict requirements in their country of origin when conducting business abroad. But this is just an example.
The UN Convention Against Corruption is a very comprehensive treaty and many other areas for improvement stand out. For instance, a lot of work needs to be done for the development of effective whistle-blowers’ protection systems, preventing of corruption in public procurements, addressing conflict of interests, and enhancing access to information, among others. The list is really quite long.
Another issue that needs particular attention is preventing transfer of crime proceeds. This will entail working with financial centres (starting from those in the region) to enhance the sharing of information on suspicious bank transfers. Furthermore, it will need to be augmented by overall access to banking information for law enforcement authorities – both nationally and internationally. This aspect will be very important.
Unravel: Given different jurisdictions and political systems, can a whole-of-ASEAN approach ever come about in countering corruption in the future?
Mr Checchi: The ASEAN Political Security Community blueprint makes reference to the need to fight and prevent corruption, and the single countries have introduced positive reforms in recent years. As an aggregate, however, the organisation has not produced a strong anti-corruption drive so far. It would be important, for instance, that the Senior Official Meeting on Transnational Crime picks up this issue; as we know corruption is a critical tool for organised crime groups to operate.
On the investigation side, cooperation among regional law enforcement agencies has improved. There is now faster and more direct police to police information sharing for recovering proceeds of crime transferred abroad, or for apprehending fugitives.
A positive progress has been the accreditation of the ASEAN-Parties Against Corruption as a subsidiary body of ASEAN. It is an organisation that aims to develop cooperation among anti-corruption authorities in the region at the operational level. An increasing number of corruption cases involve different jurisdictions, so facilitating international cooperation among investigative authorities is becoming more and more important.
Unravel: Corruption is often cited by investors as the main obstacle to doing business in ASEAN. What are some ways in which corruption hurts businesses in the region?
Mr Checchi: Corruption hampers fair competition, creates obstacles to doing business and erodes the profit margins of companies. So, I’d say it is a rather big problem.
The World Bank estimates that on average one of three businesses operating in the region experiences at least one bribe payment request each year. Despite this, ASEAN economies have attained a record level in foreign direct investment relative to GDP. And this is expected to remain high. Investment needs up to 2030 in infrastructure in the broader Asian region are estimated by the Asian Development Bank at $1.7 trillion per year. It is also estimated that the amount of funds lost to corruption in infrastructure contracts amount on average to 20% of total value. Avoiding loss of these monies requires a growing and active role for ASEAN jurisdictions and the business community to fight the pervasiveness of corruption.
The views and opinions expressed in this article do not necessarily reflect the position of the United Nations.
* The first part of the conversation can be read here.
Francesco Checchi
Francesco has more than 15 years of experience working in international organisations in the area of good governance, public administration reform and anti-corruption. Currently, Mr Checchi is UNODC’s Anti-Corruption Regional Adviser for Southeast Asia. His work focuses on providing support to member states of the UN Convention Against Corruption for implementation of the Convention. He provides expert advice and input to the development and implementation of technical assistance programmes in anti-corruption at the regional and/or national levels in Southeast Asia and South Asia, in accordance with the UNODC’s overall strategy and as an integral element of the UNODC Regional Programme. Previously, Mr Checchi worked as Anti-Corruption Specialist at the UNDP covering Eastern Europe and Central Asia.
