Monday, October 24 2016


Domestic businesses lack integrity

Update: December, 31/2015 - 08:22
Just 29 per cent of enterprises practice integrity and transparency in their business. — Illustrative image/ Photo
HA NOI  (VNS) — Just 29 per cent of enterprises practice integrity and transparency in their business, announced the latest survey of Viet Nam Chamber of Commerce and Industry (VCCI) on Tuesday.

VCCI carried out the survey with the participation of 180 enterprises in major cities of Ha Noi, Da Nang and HCM City under the "Enhancing Integrity Implementation Initiative in Business - Project 12" in the period of 2015 to 2019.

Florian Beranek, Lead Expert of Social Responsibility at the United Nations Industrial Development Organisation (UNIDO), said for businesses, corruption was not only known as bribery receiving or giving but also includes lacking transparency in recruitment, no information provided to employees or other acts.

Common corruption phenomena are internal fraud within a company, from share-out and bribery between the parent company and its subsidiaries, between management tiers using common properties for personal purposes to the appointment of trusted persons in important positions in that company.

VCCI's survey said that about 93 per cent of enterprises understood the concept of integrity and transparency in business which was known as doing business according to law with no bribes and no violations.

Over 55 per cent of enterprises believe that business integrity must be attached to ethical and legal principles and standards and make barriers against bribery and corruption. 29 per cent of enterprises which implemented good practices said they carry out good internal control spending management and make transparent reporting mechanisms with the tax customs authorities.

VCCI's survey also found that though enterprises understood the term of integrity, state agency was one of the factors hindering their performance of integrity. The enterprises in the leather and footwear, food processing and banking industries often experience difficulties and harassment dealing with the state agencies even when they try to apply the integrity in their business.

Nguyen Quang Vinh, VCCI's deputy secretary said without appreciating and applying integrity and transparency, it was difficult for Viet Nam to build a national brand for companies and a good business environment.

Economist Pham Chi Lan said it was not easy for enterprises to practice integrity because much of the bribery and fraud come from the management apparatus. According to a recent report by the World Bank, when Vietnamese enterprises earn one dong from a business contract, they must sometimes spend almost another dong in bribes to get the contract. They must pay about 40.8 per cent of profits for official taxes and fees.

Lan said very few Vietnamese enterprises practiced integrity, which caused low participation of local enterprises in the production chains in the region and in the world.

Data showed that 36 per cent of Vietnamese firms are engaged in production networks while in Malaysia and Thailand in is 60 per cent. About 21 per cent of Viet Nam enterprises engage in global value chains while it's 30 per cent in Thailand and 46 per cent in Malaysia. The lower level of involvement has resulted in less technology and knowledge transfer as well as less productivity improvement of the local enterprises.— VNS

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