A study based on collected data from survey of 239 enterprises and in-depth interview of 40 enterprises showed that a large proportion of businesses still misunderstood or incompletely understand the concept of internal control and code of conduct. Many of those believed that internal control is merely the responsibility of the internal controller, not corporate governance.   In compliance, for example in relation with state agency, two key issues would be concerned including (i) a large proportion of enterprises violated some regulations; (ii) non-formal fee for government officers seem to be a common business practice in Vietnam. To explain this fact, businesses convinced some challenges to comply that is difficulty in law implementation or law is overlapped, contradictory and changed often while companies have no legal staffs to handle and update those changes. Moreover, business partnership is mostly formulated from non-formal and familiar relationship and this partnership is popular in Vietnam.      Personal relation, non-formal cost is disguised in various forms taken account of 25-30% in business transaction. One third of the companies surveyed said that they have never applied a competitive procurement method. Abnormal transactions in procurement and sales account for a large proportion in the surveyed companies and this fact seem to be a risk making impact on business integrity. In procurement, not good practice such as «order not for demand», «order not of right quality », «quotation is revised in untransparency» account for 10%.   Similarly, in sales, 11% – 16% of the surveyed companies (equivalent to 24% – 34% of the respondents) recognized these irregularities clearly such as «incorrect invoicing », «do not comply the company sale policies», «do not deliver in accordance with the contract». More alarming is that there are anomalies in human resource management where about 27% to 38% of the respondents recognized that they aware the “inadequate implementation of cost payable to employees” but “do not comply yet the labor code in practice with employees», «recruitment is mostly based on acquaintances, relationships rather than capacity”     See more information here

Hanoi, August 27th 2019. The consultation workshop was held by VCCI and UNDP Vietnam to complete “The Manual on Internal Control and Code of Conduct in Business”. Nearly 100 participants came from SOEs, private sector and social organizations. This is a workshop organized by VCCI under the the Government-Business Integrity Initiative – GBII within the project “Promoting a Fair Business Environment in ASEAN” implemented by UNDP and financed by UK Prosperity Fund.  Internal control (IC) and Code of Conduct (CoC) are the best tools for SMEs to improve governance and management toward transparency and efficiency, ensuring the benefit of investors and shareholders and enhancing company’s reputation and image. Speaking at this workshop, Dr. Vu Thi Phuong Lien, the consultant from TDI Consulting Co. Ltd. said: These are two parts helped businesses realize the strategic vision and core values, as well as show their commitments in document. The substance of this manual has been simplified for SMEs to easily apply in practice.      The draft manual has been warmly welcomed. Mrs. Nguyễn Thị Minh Tâm, the Director of MCT Việt Nam said: “Currently, SMEs mostly have no code of conduct or control standard, so we are just spontaneous and we control each other. This manual is applicable to my company and we will try to do it”. Mr. Dinh Van Duc, Head of Planning Department of Vietnam Mineral and Metallurgical Company said: “the information shared at this workshop is appropriate and essential to my business”. The draft manual is download here tại đây A lot of comments have been made to the workshop from businesses. It is recommended that the project promoted training activities for businesses as well as businesses need more time to study and apply successfully IC and CoC. “Time is required to formulate new approach because many businesses are on the old way” – Mrs. Minh Tâm constributed. To that requirement, Ms. Dinh Thi Bich Xuan, Deputy Director of the SDforB, VCCI said that in the period of 2019 – 2020, the project will design many activities to support businesses in application of IC and CoC which include completion of the training manual to disseminate in business community, training of trainers, capacity building for businesses, demonstration models of IC and CoC for 2 companies in Hanoi, signing agreement on business integrity. Read more and resgister here tại đây.

Only 50%-60% of businesses clearly understand the importance of internal control and code of conduct for sustainable development. On March 5, 2019, the Vietnam Chamber of Commerce and Industry (VCCI) in coordination with the United Nations Development Program (UNDP) announced the survey results at the consultation workshop with stakeholders to finalize the Draft Report of the research on “Application of internal control mechanism and code of conduct in Vietnamese enterprises: key findings and recommendation”. This report was prepared by the Office of Sustainable Development for Business (VCCI) and TDI Consulting Co. Ltd together with the reputable experts from National Economics University, the Academy of Finance and members of the International Leaders Forum – IBLF Global (UK). This workshop is one of the core activities in the Business-Government Integrity Initiative – GBII under Project 12 funded by UK Prosperity Fund through the regional project “Promoting a fair business environment in ASEAN” implemented by UNDP. This is the time when the Anti-Corruption Law (revised) is going to take effect in July 2019 that expands the scope of anti-corruption to the non-state sector. 153 participants attended the workshop including delegates from the government agencies, embassies, businesses, business associations, international organizations and press agencies in Hanoi and neighbor areas. As a finding of the report, only 50%-60% businesses clearly understand the importance of internal control and code of conduct for business sustainable development. Dr. Vu Tien Loc, Chairman of VCCI while attending and speaking at the workshop said if internal control and compliance are not fully applied in business, bad behaviors are more likely to arise in the company and beyond via global trade and investment supply chains. Agreed with that point of view, Mrs. Caitlin Wiesen, UNDP Acting Resident Representative for Viet Nam, affirmed the importance of a code of conduct and internal control mechanisms in promoting business integrity. She said the UNDP will support the business community in developing a manual guiding application of code of conduct and internal control mechanisms. Moreover, VCCI will provide training courses to raise awareness and build capacity for businesses. Represented for donor, Mr. Gareth Warth, British Ambassador in Vietnam addressed that promoting business integrity in business is always a priority of the UK Government.    Accordingly, Associate PhD. Nguyen Van Thang, NEU research team leader said that personal relationships and informal fees are “disguised” in various forms, accounting for 25-30% in business transactions. In addition, irregularities in human resource management, lack of professional manpower or personal relationship-based recruitment created the challenges to comply with laws. The report reflected the shortcoming and even inefficiencies in management generally. Most misconduct cases are the consequences of poor compliance of internal controls and the code of conduct. Businesses are recommended to respect the core values such as integrity, transparency in order to develop a long term strategy and an appropriate, consistent governance system. Hence the enterprises are given with more opportunities to participate in global supply chain. At the same time, SOE leaders must strengthen accountability and law enforcement. MNCs should share the best practices and spread out the values of the integrity project to local businesses. Being able to implement an effective business integrity program, the cooperation and support of stakeholders including from government agencies, government officials to the business community of social organizations are very necessary. Project news.

What should businesses do to combat with money taps and harassment? If possible, please denounce the misconduct! In this article, we would suggest a number of useful channels for businesses to denounce corruption to protect their companies. Inform the company’s leaders If you found that the government officials, partners, colleagues … have acts of asking for and giving bribes, sales staff should immediately report the case to internal inspectors and business leaders. These are the first people who can protect your company and fight corruption with you. Denounce in public agencies There are two ways that business can provide information related to embezzlement or bribery to law enforcement body: Denunciation at the Supreme People’s Procuracy (VKSNDTC). Addresses of VKSNDTC, its permanent representatives and the professional division are as follows: Hanoi No. 9 Pham Van Bach, Yen Hoa, Cau Giay district, Hanoi Tel: 0243.8255058, Mobile: 0971751122 Yen Bai No. 566 Ngo Minh Loan, Hop Minh, Yên Bái city, Yen Bai              Tel: 0216 385 6616, Mobile: 0971831122 Da Nang 23 Tran Binh Trong, Hai Chau, Đa Nang  Tel: 0236 389 8738, Mobile: 0971541122 Đak Lak             21B Mai Hac De, Tan Thanh ward, Buon Ma Thuot City, Đak Lak              Tel: 0262 367 3366, Mobile: 0971951122 Ho Chí Minh            199 Hoàng Van Thu, Phu Nhuan district, HCMC  Tel: : 08 08 6882, Mobile: 0971501122 Can Tho:                D21-8&9 khu dan cu Long Thịnh, Phu Thu ward, Cai Rang district, Can Tho City.             Tel: 0292 625 8166, Mobile: 0971081122 You can drop messages on the website or send email to [email protected] Denounce to the Government Inspectorate at Lo D29, Tran Thai Tong New Urban Area, Yen Hoa, Cau Giay, Hanoi. You can leave the messages at the website or send email to, call 08044430 or email to [email protected] Other addresses: Local congressmen News agencies Business is not sure how to denounce or whether denounce? You can contact us for help and free advice. Please send email to us at [email protected] or contact us here; you also leave comments at the end of each article. You will be advised and supported to deal with difficulties thus to promote business integrity. 

Through this article, businesses will be provided with information on important points that the current Anti-Corruption Law (2005) stipulates. In Vietnam, bribery is illegal. Government officials who collect and accept bribes will be strictly sanctioned by the law. Enterprises that give bribes will also be sanctioned, seriously affecting the performance, turnover and reputation. Below are some examples of companies that have been sanctioned and prosecuted for responsible business behavior. Businesses can find out more information on current laws at the National Legal Database. Below are some of the key points of anti-corruption laws that are directly relevant to businesses. According to Chapter VI, Article 87, the obligations of an enterprise include: Reporting of corrupt practices to competent authorities Cooperate with competent authorities in the investigation of corruption Provide feedback on anti-corruption laws to competent authorities to contribute to the fight against corruption Cooperate with competent authorities, VCCI and business associations to build a healthy corporate culture. Compete fairly in the market by establishing internal control system within the company Currently, the Draft Law on Anti-Corruption is under discussion for amendments and is expected to be approved in the near future. The Draft Law also clearly defines the responsibilities of businesses, on the need to build a more professional and transparent business culture. Refer here. What can your business do to reduce the risk of corruption? See Chapter 3 of the How to Prevent and Fight Corruption Toolkit. You will find lots of ideas on how to set up simple systems in your company to protect yourself. Your business can send people to business integrity training. Find training programs in the Training section of our website. What can businesses do to deal with the bribery of government officials? If possible, the company should report this misconduct. There are a number of ways you can report bribery and corruption. Refer to KDLC for some tips and some successful anti-corruption cases.

In the afternoon of August 13th, the People’s Committee of Ha Tinh province issued a decision to sanction Tien Dat Construction Joint Stock Company 435 million VND for the act of discharging wastewater causing environmental pollution. Specifically, Tien Dat company was fined 290 million VND for discharging wastewater directly into the sea causing environmental pollution and a fine increase of 50% for recidivism, disregard of the law. At the same time, Tien Dat Company was suspended for 3 months and forced to renovate and upgrade the wastewater treatment system to ensure technical standards in accordance with the law. Tien Dat Joint Stock Company has invested in shrimp farming since 2015 in Thinh Loc commune (Ha Tinh province) on an area of more than 10 hectares of water, located close to the sea. In operation, the shrimp pond of Tien Dat Company did not treat wastewater properly but discharged it directly to the environment. The local marine environment has been seriously polluted, causing frustration in society, suffering a loss of money and the company’s reputation In fact, protection of environment is important in practice for responsible businesses. The Government of Vietnam has issued Decree 155/2016 / ND-CP, which provides appropriate penalties for violations of the regulations on environmental protection. Enterprises can refer to the Environmental Technical Regulations for wastewater on the website of the Institute of Legal Science (Ministry of Justice) and Decree 155/2016 / ND-CP at the Government Portal. Let’s take a closer look at Article 13, which deals with a violation of wastewater treatment regulations. To avoid penalty and sustain your reputation in the market, it is advisable to take care of environmental impact and ethical standards in operation of your business. A code of conduct is important to identify the company’s ethic values and manage the employees’ behaviours more responsively. You can visit our website to learn more application of code of conduct. Otherwise you can refer an example of a code of conduct here