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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!  

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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.  

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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    

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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  

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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.    

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According to research conducted by Towards Transparency ago, it showed that 85% of youth said that lacking of integrity will be hamful to the country, their families and themselves; 87% of respondents answered they had a significant role in combating corruption and 74% of Vietnamese youth said they did not know or had very little knowledge about anti-corruption and relevant laws. It is notable that only 18% of adolescents said they have been educated on anti- corruption.   Since 2009, National Project 137 on putting integrity into institutions of training and education was approved. Following this, recently, VCCI and UNDP have been providing kind supports to the International School under Vietnam National University, Hanoi to adapt the existing manual on internal controls and codes of conduct in business to train at their university.   Through training, it is hopefully a good way to raise student’s awareness and equip them these useful knowledge prior to start of their career. In the near future, those people are expected to be business owners, therefore, they will be a right person to make changes in doing business and take a leading role in navigating their owned business towards long-term sustainable development. Supposedly, being  employees at companies and/or organizations later, they will be a part of target group to realize pursued core values of companies and organizations. Once they could understand how important integrity is and fundamental knowledge can be equipped at their early ages, then they can proactively address challenges and insprire good practices. Photo of pilot training at the International School, VNU   Our project has  been  so far supporting several selected businesses to conduct pilot role models by applying internal control mechanisms and codes of conduct in business. These companies included Vietnam Maritime Corporation (VIMC), Traphaco Joint Stock Company and some other female-owned businesses in Thai Nguyen City like Lucas as an example. Through this initial assistance, it will create key foundation for businesses to standardize internal control mechanism and auditing committee to meet requirements of relevant regulations such as Law on Enterprises (2020), Law on Securities and Decree No. 05/2019/ND/CP on internal audit dated 22nd January, 2019.    

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Since the beginning of 2020, the World has faced one of the biggest global crises in recent decades, which was the rapid spread of Covid-19 pandemic. Isolation measures, social distancing and different restrictions were strictly implemented setting out great challenges for businesses and showing a less prosperous picture of global economy. Businesses in the Southeast Asia have been suffering from many difficulties during over period. In fact, number of businesses could absolutely understand how Covid-19 pandemic affecting their business operations in the near future still remains a weakness.   At the virtual business integrity roundtable series – beyond the Covid 19 crisis hosted by the Organization for Economic Cooperation and Development (OECD) in collaboration with the United Nations Development Program (UNDP) on past March 31st, the event brought together representatives from many different sectors. On the Vietnamese side, Mr. Nguyen Quang Vinh, VCCI Secretary General attended the conference to share his insights into several identified risks that businesses encountered during the pandemic outbreak period.   On the business side, the pressure of ensuring business continuity, labor management as well as disrubtion to global supply chain, etc. were reasons causing significant impacts on business integrity. In order to overcome obstacles towards sustainable development in the long term, Mr Vinh highlighted that despite the size of businesses whether they were large or small, business integrity should be put at the heart of their operation because it would create a core foundation helping businesses to boost its resilience, attract loyal and new customers as well as the interest of genuine investors, recruit and retain talents in times of crisis.   Through this workshop, great efforts of promoting business integrity made by VCCI over the past 10 years were also shared, especially initiatives of Helping SMEs to resist corruption and “Government-Business Integrity Initiative-GBII. These projects were funded by the UK Prosperity Fund through UNDP regional project “Promoting a Fair Business Environment in ASEAN”.    On this occasion, OECD and UNDP would like to thank VCCI for recent goodwill cooperation, particularly the 10th Asia Pacific Anti-corruption Initiative Regional Conference’s Business Integrity Meeting as a good example and they also expressed their interest in closely working with VCCI in days coming for similar activities.