Note: Someone asked me about other articles I have written on bribery and corruption. I have posted another one below that I have found in my collection which was published more than 7 years ago, about bribery and corruption risks as our companies venture overseas. The article mentioned an anti-corruption conference, which leads to a question someone asked me over lunch yesterday. Do our directors, including those in our government-linked companies, attend professional development programmes in the area of bribery and corruption risks?

About three years ago, I was asked to moderate a panel discussion at an ethics conference held in Singapore. There were probably about 300 attendees. Before I started, I asked the audience: how many of those here are company directors? how many are CEOs? I barely saw a hand come up (the same thing often happens at conferences on sustainability). Such conferences are like a church service. Nearly everyone who is there is already a convert. For such conferences, you will usually find a collection of people in ethics, legal, compliance and internal audit – if you are lucky, some people in procurement. Very few front-line sales people, who are often the ones who face pressure in paying bribes. And hardly a CEO or board director.

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First published in Today on August 25, 2010

By Mak Yuen Teen

As this great nation of ours turns 45 and we celebrate the progress we have made, we should do some soul searching and ask ourselves this: What will become of us in 10 or 20 years’ time?

Each year, the international non-governmental organisation, Transparency International, publishes the Corruption Perceptions Index (CPI), which measures the levels of public sector corruption around the world. It also publishes a map of the world which is coloured according to the levels of corruption.

In previous years, this map was colour coded such that the darker the shade of red, the higher the level of corruption indicated. Countries with low levels of corruption were represented by shades of yellow. The most striking thing about the map was how much of the world was in different shades of red and therefore, had relatively high levels of corruption as measured by the CPI.

The other striking thing was that Singapore was actually a little yellow dot surrounded by masses of red. On these old maps, we were not the little red dot that we are often referred to as. We were a little yellow dot — and that’s good. Last year, Singapore ranked joint third with Sweden out of 180 countries on the CPI.

It is actually quite remarkable that Singapore has managed to stay “yellow” when it is surrounded by “red” countries. It is very easy to do what others do especially when we are so small. For this, the Government deserves credit for a low tolerance towards corruption here. Institutions such as the Corrupt Practices Investigation Bureau (CPIB) and the Auditor-General’s Office have all contributed to ensuring that we have one of the cleanest public sectors in the world.

The level of private sector corruption here is relatively low too. However, as our government-linked companies and small-to-medium enterprises increasingly venture overseas into “red” countries, the issue they must all face is how to do business in countries where corruption is the norm.

While we may be able to continue to manage our corruption at home, the behaviour of our companies overseas can ultimately damage our reputation as being one of the cleanest countries in the world. Over time, this may also creep into business practices in Singapore and destroy our hard-earned reputation.

At an anti-corruption conference here last year, a participant asked our Minister for Law this question: How would Singapore maintain its high standards of integrity and ethics in light of our open immigration policy?

I thought the minister’s answer was honest and perceptive. The gist of what he said was this: Singaporeans are not inherently more honest than our neighbours because we come from the same roots. However, our strict rules against corruption and strong enforcement keep everyone honest — and will also keep our immigrants honest.

WILLING TO BRIBE ABROAD

During the panel discussion, I asked one of the panellists the corollary to that question: If Singaporeans are not inherently more honest and it is our strict rules and enforcement here that keep us honest, does this not mean that when our companies venture abroad and the rules and enforcement are less strict, they will pay bribes like others?

Transparency International produces another index, called the Bribe Payers Index, which measures the propensity of firms from leading export economies to bribe abroad. On this index, Singapore is ranked joint ninth out of 22 countries. This suggests that our while our internal corruption is low, our firms appear more willing to pay bribes when they do business abroad. When we look at the masses of “red” around us, this should not surprise us.

I have spoken to a number of businessmen and I can see the constant struggles they face in trying to “do the right thing” and also trying to survive and grow the business.

One businessman talked about having to add a 10-per-cent “facilitation” fee when bidding for public sector projects in a neighbouring country. Another said that he uses third parties so that he is not directly involved in paying bribes. The anecdotal evidence supports the data that corruption in some form by our companies operating overseas is not as uncommon as we would like to believe.

There may also be differences between how our laws define corruption and what our businessmen perceive as corruption. Take the example of companies paying the media in some countries to cover their events — a not uncommon practice in countries like China and Vietnam.

If payment is not made, the media will not cover the events. Some companies use third parties to do so, and many probably do not see this as corruption. Yet, I have been told by a senior regulator that paying the media is a form of corruption.

I think we are faced with a difficult dilemma of sustaining growth while maintaining our pristine reputation. I hope that we will look into the challenges faced by our businesses in doing the right thing and making money at the same time.

Just telling them “not to do it” may not be a helpful answer. They need to have a better understanding of how to manage corruption risks when they venture abroad because if we lose our hard-earned reputation as we regionalise and globalise, we may never get it back.

This may cause us great harm in the long term as global companies are increasingly concerned about the impact of corruption risks in overseas countries on their legal liability and reputation. It is troubling to think we might truly turn into a little red dot.

The writer is an associate professor at the NUS Business School.