Vietnam Enlists the Private Sector in the Fight Against Corruption

Last November Vietnam approved a new anticorruption law.  Initial reports in the English language press recounted the measures cracking down on public officials: the closing of loopholes in the conflict of interest rules, the increased information officials must provide about their personal finances, stiffer penalties for engaging in corruption, and so forth.  The recent publication of an English translation of the law reveals these early reports failed to mention a critical provision. As of July 1, all firms doing business in Vietnam, whether domestic or foreign, must:

  • determine if any employee or officer has engaged in corruption and if so promptly report him or her to the competent authority;
  • train employees on the anti-corruption laws; and
  • implement a code of business conduct that must include a rule barring conflicts of interest.

By my count (nations with anticorruption compliance laws january 2019), Vietnam is now the 25th nation to require some or all of the companies that do business in its territory to have some type of anticorruption compliance program.  Like every other anticorruption policy, requiring the private sector to join the fight against corruption is not a panacea.  But it surely is a part of the solution.

What are the rest of the world’s nations waiting for?  Do they think they can win the fight on their own?  Don’t they think the private sector has something to do with corruption?  Why aren’t they enlisting it in struggle?

4 thoughts on “Vietnam Enlists the Private Sector in the Fight Against Corruption

  1. Rick, I’m curious if whether in your survey of these laws, you’ve gotten any sense of how they’re enforced, or how effective they are in practice. I’m also curious (though you may not be able to tell this from the text of the law and/or the translation provided) what standard is to be used to determine whether a training program or code of conduct is considered adequate to satisfy these legal requirements.

    The easiest of these provisions to enforce, I think, is the requirement that a company promptly report any cases of corruption that it knows about. What other countries have a similar requirement, and do we know anything about how many people have been turned in by their employees?

  2. This is a very interesting idea, and makes total sense as a policy to have. Does the government offer any reward to businesses for reporting? Or do they simply expect them to report?

    While I agree this is certainly a good idea, it seems prudent to point out that it has limits. While some businesses would gain from less corruption (who likes paying bribes anyways?), certainly not all of them would. Many of the most corrupt businesses are propped up by the fact that they routinely get government contracts through bribing procurement officials, and these would have little incentive to report.

  3. While a slightly different issue, I found it interesting that Vietnam’s new anticorruption law provides for the prosecution of individuals working for private companies. Previously, Vietnam’s anticorruption crimes were limited to acts by public officials. Now, the Vietnamese National Assembly appears poised to further expand individual criminal liability if it finds the new law is successful.

    Theoretically, individual liability for corruption would seem to carry with it heftier deterrent effect. To Professor Stephenson’s point, however, laws on the books aren’t worth anything if they’re not enforced. It’s early, but as of September 2018 (nine months after adopting the new Penal Code), no prosecutions had been made. (See https://www.hoganlovells.com/en/publications/vietnam-continues-to-make-strides-on-anti-corruption-efforts).

  4. Thanks for the useful comments and additions. They prompted me to devote February 13’s post to considering the effectiveness of compliance programs. Link: https://globalanticorruptionblog.com/2019/02/13/are-corporate-anticorruption-compliance-programs-effective/

    To Alexandr Poulsen’s comment, one would hope that those companies which don’t pay bribes, either because they fear prosecution by their home countries or for intrinsic reasons, would pressure authorities to crack down on bribe payers.

Leave a Reply to Blake Ellison Cancel reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.