Business Integrity – A Licence for international economic integration

– Dr. Vu Tien Loc- VCCI Chairman –

Public Procurement and Responsible Business Conduct

Governments are the largest buyers of goods, services and public works.  Public procurement accounts for approximately 12% of GDP in OECD countries and is critical to the delivery of services like infrastructure, health and education. Value for money remains a fundamental principle of public procurement. However, the concept has evolved to encompass a wider range of considerations such as environmental, economic and social aspects. This makes public procurement a strategic tool for achieving policy objectives such as the Sustainable Development Goals, and for promoting Responsible Business Conduct (RBC).   Governments can lead by example by incorporating responsible business standards (RBC objectives) in their purchasing policies and practices, to safeguard the public interest and ensure the accountability of public spending.  Integrating RBC objectives in public procurement can provide an incentive for companies to incorporate responsible business practices and risk-based due diligence in their global supply chains.   The OECD has launched a programme to advance the integration of Responsible Business Conduct (RBC), in particular risk-based due diligence, into public procurement policies and processes. Since October 2019,  the OECD has been delivering on three pillars:   1) Research and analysis to support policymaking: The OECD is taking stock of existing practices in countries to integrate RBC objectives in public procurement policies and practices. OECD gives a policy brief on benefits and lessons for governments to integrate RBC in public procurement.   2) Knowledge sharing to promote implementation: The OECD is creating a platform to support peer learning and collaboration in the effective implementation of RBC in public procurement. The platform convenes practitioners, policymakers and stakeholders on public procurement and RBC. It provides a space to exchange on solutions for preventing and mitigating risks in global supply chains, such as through supply chain due diligence in public procurement.   3) Implementation: pilot on the public procurement of garment and textiles: A pilot on risk-based due diligence in the public procurement of garment and textiles aims to support countries in implementing the approach of the OECD Due Diligence Guidance for Responsible Business Conduct and the OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector, tailored to the public procurement context.  

Decreased importance of personal relationship for state employment

The 2020 PAPI shows that close relations (status of ‘self-centered’) in human resource recruitment in the public sector have become less important nationwide.   The Vietnam Provincial Governance and Public Administration Performance Index (PAPI) is a policy monitoring tool initiated by the United Nations Development Programme in Viet Nam since 2009. PAPI captures and benchmarks citizen’s experiences and perception on the performance and quality of policy implementation and services delivery of all 63 provincial governments in Vietnam to advocate for effective and responsive governance. PAPI is a combination of 8 dimensions including: (1) Participation at local level; (2)Transparency in local decisions-making; (3) Vertical accountability towards citizens; (4) Control of corruption in the public sector; (5) Public administrative procedures; (6) Public service delivery; (7) Environmental governance; (8) E-governance. The 2020 Vietnam Provincial Governance and Public Administration Performance Index Report (PAPI) was released in April 2021. This report demonstrated that there has been an incremental improvement of government and public administration performance during the 2016-2021 government term, as compared to the 2011-2016 government term. The most striking observation is that 60 provinces and cities recorded the growth rate in their core PAPI annual score fluctuating from 0.1% to 3.1% since the first PAPI studied in 2011.   Control of Corruption (Dimension 4) in the public sector has been significantly improved  In 2020, citizens encountered less trouble when accessing specific public services compared to 2019. Recently, local governments have also paid greater attention to a fair recruitment of state employees. As many as 18 provinces made significant progress in 2020. Out of the 16 best performers, Ben Tre performed well in this dimension. 6 provinces experienced significant setbacks as opposed to 2019. Ninh Thuan and Ninh Binh had the largest declines. Hai Phong and Ho Chi Minh City were among the poorest performers in both 2019 and 2020. Therefore, 9 out of 10 top performers in controlling corrupt behaviors in local governments and public services are central and southern provinces. Quang Ninh, Dong Thap, Ben Tre, Quang Tri and Quang Nam are the top five performers in this indicator. Corrupt behaviors in the public sector as measured by PAPI were found most often in Lam Dong, Kon Tum, Khanh Hoa, Hai Phong, Ninh Binh. In Quang Ninh, citizens experienced more bribes for state employment while citizens in Ben Tre and Dong Thap paid more bribes when applying for construction permits.   Personal relations (status of ‘self-centered’) are less important to access state employment Compared to the 2016 findings, personal relationships to be hired for government positions have become less important nationwide. However, personal relationships remain very important for five public offices at the commune level even among the top performers in this dimension. The 2020 survey results showed the percentage of citizens said personal relationships are “important” or “very important” keeps on decreasing. However, it is still as high as over 60%. Across a range of all five positions, the percentage of respondents suggesting that connections were important in hiring for those positions is at its lowest number since the 2011 survey began. Additionally, this rate increased in 2015 before seeing a gradual decline in 2016. The analysis partly reflects how anti-corruption efforts have improved since the 2016-2021 government term started. In 2020, Phu Yen, Lai Chau, Khanh Hoa, Son La, Dien Bien, Lam Dong and Quang Binh were the provinces where personal relationships for state employment were most important.     Source: Vietnamnet    

Candidate pledges to anti-corruption

As General Secretary and President Nguyen Phu Trong emphasized at the Standing meeting of the Central Steering Committee on Anti-Corruption on March 18, 2021: the anti-corruption work in the new term must be stronger and more effective than the previous term. This is also clearly demonstrated by the candidates for the 15th National Assembly in their campaign commitments before voters.   Anti-corruption ‘no forbidden zones, no exceptions’ is the statement of Mr. Vo Van Thuong, Politburo member, Permanent member of the Secretariat of the Central Committee of the Communist Party of Vietnam, term XIII in the online conference to meet the voters in the 13 ward, Hai Chau district, Da Nang belongs to the No. 1 constituency. As a permanent member of the Secretariat, Mr. Vo Van Thuong pledged to work with the Politburo and the Secretariat to focus on directing, implementing and improving the effectiveness and efficiency of Party building and rectification, step up and resolutely fight against corruption and negativity, with the idea that there is no forbidden zone, no exception, and is not affected by any organization or individual”. Mr. Vo Van Thuong, Politburo member, Permanent member of the Secretariat of the Central Committee of the Communist Party of Vietnam, term XIII in the online conference to meet the voters in the 13 ward, Hai Chau district, Da Nang. Photo: Hoang Son/Thanh Nien   Standing member of the Finance and Budget Committee, delegate Vu Thi Luu Mai (introduced for re-election in the 4th constituency of Hanoi) also pledged to propose the removal of parochialism provisions leading to policy corruption, group interests, budget damage… Specifically, Ms. Mai promised to propose amendments to the law on land to improve management efficiency, ensure people’s interests, and avoid budget loss. One of the other priorities of this candidate is perfecting tax and fee policies, cutting unreasonable revenues, reforming and transparent administrative procedures, and facilitating people in transactions… Standing member of the Finance and Budget Committee, delegate Vu Thi Luu Mai. Photo: Van Diep/TTXVN   Candidate Hoang Van Cuong, Vice Rector of National Economics University, is an incumbent and self-nominated candidate for the 15th National Assembly and is allocated at the 10th constituency of Hanoi. Mr. Cuong pledged that if elected, he would contribute to building a mechanism to monitor power, prevent corruption right from the formulation of policies and laws, actively participate in supervising the law enforcement process in the investment sector, finance and management of national programs and projects.   Hoang Van Cuong, Vice Rector of National Economics University. Photo: NEU   Also running for election in Hanoi, constituency No. 5, the Chairman of the Vietnam Chamber of Commerce and Industry Vu Tien Loc, who has had 4 consecutive sessions in the National Assembly committed efforts to contribute to institutional reform, administrative reform, perfecting the legal framework, overcoming the lack of transparency, overlapping, troublesome administrative procedures, causing difficulties and insecurity for people and businesses.   Chairman of the Vietnam Chamber of Commerce and Industry – Mr. Vu Tien Loc at the meeting between voters and candidates for the 15th National Assembly, Tay Ho district. Photo: Hanoimoi       Compiled news  

VCCI provided technical support to Traphaco strengthening internal auditing system

Pioneering in pharmaceutical business for sustainable development, Traphaco expressed their strong determination to achieve their “sustainability” in farming green materials, making green products and now to choose transparent corporate governance and business integrity for sustainable development. This is important to empower “green” brand and differentiate  Traphaco from other competitors, build trust in customers, shareholders and attract investors. During the context of declining economy due to Covid-19 pandemic, sustainable development is a global trend that Traphaco well recognized and take a choice.   In the framework of “Government-Business Integrity Initiative – GBII” promoted by VCCI, a component of the regional project “Promoting a Fair Business Environment in ASEAN” financially supported by UK Prosperity Fund, VCCI and  UNDP have carried out many training, consulting activities and improving capacity in transparent governance and integrity business for various companies in Vietnam including Traphaco.   Photo of the project team and Traphaco staff at a technical advice meeting   In compliance with the technical package provided by VCCI and UNDP to support Traphaco, Deloitte Vietnam has been selected to supply expertise for this assignment. Recently, Deloitte has conducted an assessment on current status of internal control and risk management in Traphaco. Based on the outcome, Deloitte would develop auditing standards and appropriate procedures and provide training service at the company in order to transfer tools for Traphaco.   On past March 31st, Traphaco Joint Stock Company has successfully hosted the 2021 Annual General Meeting of Shareholders for the Term 2021-2025 to elect the Board of Directors, the Board of Supervisors and the Auditing Committee Representative who importantly take the role in directing business operations of Traphaco. In considering the features and traits of Traphaco business, Deloitte will develop the appropriate procedures applied to a selected audit. The deliverables will be reported  in May 2021. A training program will be provided for Traphaco’s relevant employees thus to enhance capacity for the internal audit team in compliance with the Circular No 08/2021/TT-BTC and meet the requirement for the business development.