Business Integrity – A Licence for international economic integration

– Dr. Vu Tien Loc – Former VCCI Chairman –

Joining hands to promote a fair business environment in Vietnam

Below, please kindly find the entire opening speech by Mr. Nguyen Tien Huy, Director General, Office for Business Sustainable Development – ​​VCCI at the workshop titled “Joining hands to promote a fair business environment in Vietnam”, which devlivered on 22 December 2022 in Hanoi.   Ms. Ruth Turner, Political and Development Counselor, British Embassy in Vietnam, Mr. Tomas Kvedaras, Project Specialist, Judicial Integrity Network in ASEAN, FairBiz project, UNDP’s Regional Hub in Bangkok, Thailand, Do Thuy Van, Program Manager, UNDP Vietnam, Ladies and Gentlemen, distinguished delegates, businesses, press agencies…,   We are now at the last days of 2022. For businesses, this probably is the busiest time to “speed up and reach the finish line” towards achieving business production plans. Therefore, the large participation of business representatives at the workshop today demonstrates the great interest of the business community in integrity and fair business environment which is always considered as a burning topic. On behalf of Vietnam Chamber of Commerce and Industry (VCCI), I would like to express my sincere thanks today in particular to the representative of the British Embassy, ​​the representative of UNDP’s regional FairBiz project and many businesses and media agencies for attending our workshop titled “Joining hands to promote a fair business environment in Vietnam” and also for actively joining efforts, providing support and coordinating with VCCI on the journey into forming a business integrity community during over time.   Ladies and Gentlemen, “Corruption remains one of the biggest obstacles to global socio-economic development. Corruption affects the implementation of the 2030 Agenda for Sustainable Development; causes negative impacts on markets and generates unequal consequences for the most vulnerable among us. Collective action plays an important role to help implement business integrity and build a more transparent global economy.” As Mrs. Sanda Ojiambo, Executive Director of the UN Global Compact Network underlined in her statement. Sharing the same perception that corruption arises as an issue with global impacts so that a global approach to anti-corruption is required along with a vision for promoting sustainable development of the business community in Vietnam, VCCI understands that only through creating a transparent, fair, integrity business environment, we will be able to mobilize and optimize use of resources of the private sector, avoid losses and waste. From there, businesses can increase their trust and concentrate resources on business production, long-term investment which contribute to the goal of sustainable socio-economic development of the locality and the nation, also improve competitiveness and strengthen international integration. Regarding the National Anti-corruption Strategy until 2020 and the United Nations Convention against Corruption Implementation Plan, as a national organization representing and bringing together the business community and entrepreneurs in Vietnam, VCCI has taken drastic measures to promote the role of businesses, business associations and trade associations in anti-corruption through developing and building a healthy, uncorrupted business culture; creating a transparent and fair competitive business environment; raising awareness on legal compliance of businesses; eradicating step by step bribery in the relationship between businesses and state agencies; coordinating with competent agencies to prevent and promptly detect acts of harassment and bribery of officials and public servants… VCCI has built a cooperative and cohesive relationship with agencies, international organizations by implementing activities to promote anti-corruption practices in business. VCCI has been actively participating in initiatives to learn from experiences, recognize and highlight domestic efforts for the promotion of business integrity. VCCI is a member of the Executive Board of the ASEAN CSR Network, a member of the Integrity Working Group in ASEAN; is an effective partner with international organizations such as OECD, UNDP, and member of the Global Compact Network – UNGC, World Business Council for Sustainable Development – WBCSD…   Ladies and Gentlemen, Since 2017, VCCI has been working closely with UNDP under the support from United Kingdom for implementing the FairBiz Project and the Government Business Integrity Initiative (GBII). Mentioning some notable results that we have achieved over the past time such as: nearly 1500 businesses have received training in internal control mechanism and code of conduct; engaging 15 business associations with nearly 13,000 members to sign a business integrity pledge; providing technical support for 05 businesses included Traphaco, Vietnam Maritime Corporation (VIMC), Fine Scandinavia, and 02 female-owned enterprises; initiating the Vietnam Business Integrity Network (VBIN) in 2021. The establishment of VBIN demonstrates great efforts of VCCI, UNDP, and British Embassy in Vietnam in raising awareness of the business community in Vietnam about business integrity, encouraging business leaders to act on business principles and practices, as well as enhancing multi-stakeholder engagement, policy dialogue which facilitates responsible business conduct, and creates a more transparent and equal business environment in Vietnam. VBIN has achieved a number of very important and encouraging initial results such as: the launching of Vietnam Business Integrity Index, assessing the current state of business integrity implementation among 30 listed companies in HCM and HN, building an online tool platform to evaluate the level of business integrity implementation. All these contents will also be shared in detail with delegates at the workshop’s program today.   Ladies and Gentlemen, The outcomes of the Provincial Competitiveness Index (PCI) survey conducted by VCCI have shown that anti-corruption practices in recent years have known positive deliverables. Specifically, the rate of businesses having to pay informal fees in general in the PCI 2021 survey decreased to 41.4% compared to 44.9% in 2020. This is also the lowest level in the past 16 years (in 2006 it was 70%). The size of informal expenses also has decreased significantly over time when the proportion of enterprises spending more than 10% of revenue to pay for this type of expense is only about 4.1%, decreased twice as in 2016  (9.1%). However, there’s still a lot of space for improvement. For example, the percentage of businesses having said “The incident of troubling for handling business procedures is common” was 57.4% in 2021, higher than 54.1% in 2019-2020. That being said, in order to create a more transparent and fair business environment, in addition to the leadership of the Government and all bodies of government, the business community must proactively take collective initiatives which have a decisive meaning. Collective action saves time and resources generate significant inspirational influence, and helps accelerate systemic changes towards business integrity and transparency. To go fast, we go alone. But to go far, we must go together. That is also the spirit of SDG Goal 17: Partnership – Strengthening Cooperation. Together, we go further. Together, we go stronger. Let’s join hands and act together towards a fair business environment for all businesses in Vietnam, for the future and sustainable development of businesses themselves. And with that conviction, I would like to respectfully announce that today’s workshop is now open. Wish you all a successful meeting! Finally, I wish you and your family a Christmas season and a New Year 2023 filled with kindness, love and joy! Merry Christmas and Happy New Year!  

Viet Nam Business Integrity Index – VBII launched

Hanoi, 21 September 2022 – Viet Nam Business Integrity Index (VBII) was introduced for the first time by Viet Nam Chamber of Commerce and Industry (VCCI) and the United Nations Development Programme (UNDP) in Ha Noi today as a tool to assess the state of business integrity of companies (refer to a sumary introduction of VBII here).   The index is built on the seven essential elements to building and operating a company based on integrity, including Culture (commitment from the top, management, employees, training);  Code of conduct, Control, Communication, Conduct (emloyee and gender/ inclusion, community, social, environment and sustainable development); Compliance, and Certification. The VBII is intended for companies in Viet Nam of all sizes, ownership, sectors, and structure, listed, privately owned, local or foreign-owned, or State-owned, any company that is interested in business integrity and sees business integrity as a bedrock principle for their growth.   Transparency, accountability, and integrity are key elements that define good governance and the existence of a Fair Business Environment in any country. In the context of the COVID recovery, good governance has gained greater attention from investors and consumers. This is reflected, for example, in the drive by governments and stock exchanges for businesses to report on their non-financial performance.  An example of this trend is the EU Corporate Sustainability Due Diligence directive and related EU and EU members’ legislations.  Disclosure while important, will have to be trusted as true and fair.   For Viet Nam to continue attracting quality investments, low level of corruption and higher levels of transparency are very important.  Businesses conduct can be a good or bad contributor to the level of corruption in the country.   Viet Nam is one of the few countries that has shown incremental progress in the Transparency International’s Corruption Perception Index, going up by 26 places globally (from 113 in 2017 to 87 in 2021); and Rule of Law Index by the World Justice Project, as an exception among ASEAN countries in moving up in ranking at 88.   However, some sectors remain more vulnerable to corruption than others. For example, a joint business survey report published by VCCI and UNDP last June showed that at least 1 out of 3 businesses participating in public procurement recognized the need of informal payments for winning government contracts. Even more concerning is that the culture of commissions or informal payments is so embedded that businesses are willing to pay even when nobody asks for it.   “Viet Nam Business Integrity Index is a tool that if used by businesses in an honest and transparent manner, will contribute to improving the country’s standing and brand, building trust based on data and information, attracting investments, generating wealth and improving lives of citizens,” said UNDP Deputy Resident Representative Patrick Haverman in his opening remarks. “We cannot promote business integrity in isolation. It is an integral part of responsible business conduct.  Business integrity therefore requires a holistic approach.  For integrity to work, the environment, workers, supply chains, government agencies, consumers, the community as stakeholders have to be respected.  Businesses need to be profitable by enhancing the operating environment and by meeting minimum expectations of stakeholders.  In deciding on investment sites, global companies will consider the state of respect in the countries for responsible business conduct with good governance and the rule of law as critical factors”.   VBII has been supported by the FairBiz project, a UNDP regional initiative that is funded by the UK Government under ASEAN Economic Reform Programme to promote a fair business environment in six ASEAN countries (Indonesia, Malaysia, Myanmar, the Philippines, Thailand, and Viet Nam).   “The UK – VN relationship continues to go from strength to strength as we are going to mark 50 years of diplomatic relationship next year,” said Deputy Head of Mission, British Embassy Ha Noi, Marcus Winsley. “Together with Vietnamese and international partners, we stand ready to support Vietnam to achieve your ambition and deliver your commitment towards a fair business environment, an effective economic reform and in various other areas including climate change, education, healthcare and innovation”.    Companies’ disclosure, transparency, and corporate integrity policies have a direct impact on the level of business integrity more broadly in the market. In fact, businesses are increasingly realizing the value and benefits of business integrity. The experience of many businesses that have put business integrity first shows that they have benefited from the attention and appreciation of investors, suppliers, buyers, and customers. This is a clear, proven advantage for those companies wanting to access international markets and participate in global supply chains.   “Sustainable development is no longer a choice between ‘yes’ and ‘no’, but has become the survival, the only way for businesses to exist and develop at present and in the future. VCCI Vice Chairman Nguyen Quang Vinh emphasized. “Viet Nam Business Integrity Index developed and launched today by VCCI and UNDP is a new step to bringing Vietnamese businesses closer to international standards of transparency and integrity as well as helping businesses overcome difficulties in integrating integrity into their production and business activities”.   VBII is a tool that needs to be maintained and improved based on experience of working.  UNDP is committed to further working on business integrity and supporting VCCI in using and improving this tool. Promoting transparency and integrity continues to be a central point of the UNDP’s Country Programme Document for Viet Nam (2022-2026).

Business Integrity Toolkit for Young Entrepreneurs

In recent years, the issue of business integrity has come to the forefront of public and private agendas. With government and corporate scandals all around, it is not surprising the public is pushing back. Corruption and fraud misdirect public funds away from the people they are supposed to support. The reality is that the Sustainable Development Goals, which are a broadly recognized series of targets for governments and society to achieve by 2030, are unlikely to be attained without also achieving SDG Target 16.5 – to “substantially reduce corruption and bribery in all their forms”. Another important priority of the SDGs is youth employment, and in particular, decent jobs for youth, whereby young women and men have access to decent, productive work, everyone benefits, and our future is more prosperous. To achieve this, it is critical for young entrepreneurs, setting up their businesses for the first time, to get started on the right foot. This Business Integrity Toolkit is very much a joint effort. Conceived as part of a training programme organized by UNDP for the Youth Co:Lab, our community of social entrepreneurs in ASEAN countries, it is an example of “collective action” – a concept in the fight against corruption which you can read more about in the Toolkit. See detail here.

Strengthen implementation of ethical practices and business integrity

In recent years, a number of free trade agreements (FTAs) have been negotiated and signed, facilitate business to deepen international integration, creating many new cooperation opportunities. Therefore, this requires businesses to ensure transparency and adopt ethical business practices. In fact, businesses  with proactive implementation of business integrity are highly appreciated by potential investors, customers and business partners… especially this is an important advantage to join global supply chains. On past November 26th, the Vietnam Chamber of Commerce and Industry (VCCI), UNDP Vietnam coordinated with the Vietnam Textile and Apparel Association (VITAS) to organize an online training workshop titled“Guidelines for ethical business practices and professional conduct”. According to Mrs. Dinh Thi Bich Xuan, Deputy Director General of Office for Business Sustainable Dvelopment,VCCI, the training is a key activity aimed to build the capacity of businesses in promoting business integrity and helping to minimize fraud and business risks towards good corporate governance. At the program, Mr. Truong Van Cam, Vice President of VITAS, the co-organizer of the workshop highlighted the importance of an appropriate code of conduct and professional conducts contributing to form a fair and transparent business environment. Through presentations of speakers and vigourous discusiion, businesses have better understood about the essential role of risk management and ethics regarding to business development in the garment industry. As a result, businesses are able to effectively apply step by step the code of conduct to resolve ethical dilemmas in business operations. The training course was provided by experienced experts from PWC Vietnam. The representatives from British Embassy in Hanoi, UNDP, VCCI  attended with 70 participants from businesses in the garment industry, middle level managers, human resources, legal officers, internal audit, account-finance officers…