34 ASIAN LEGAL BUSINESS – JUNE 2023 WWW.LEGALBUSINESSONLINE.COM ANTI-CORRUPTION mind that a belief that bribery is commonplace is no defence under most antibribery laws. On the opposite end of the spectrum, just because a jurisdiction is perceived to be relatively free from bribery and corruption, does not mean it is risk-free. Because these countries are often viewed as business-friendly due to a relative lack of domestic public bribery, they are used as jumping off points for business activities in some very high-risk neighbouring jurisdictions. Companies should, therefore, not let their guard down, even when basing their operations in these business centres perceived to be low risk,” says Levison. “To address this, we advise companies to engage in strong compliance education efforts, not just through training, but also by communicating a strong tone at the top and “mood at the middle”. Strong compliance messaging should come not just from global leaders based in headquarters outside the region but also from senior regional and local management so that local employees know these issues are taken seriously by their direct managers and those in-region. Of course, the “buzz at the bottom” should also be monitored to gauge how well the cultural messaging is reaching all levels of employees. This is consistent with regulator expectations that companies make sure that their compliance program goes beyond just the paper on which it is written, and is reflected in the corporate culture broadly,” adds Levison. Companies will also have to commit to ongoing monitoring. Third-party due diligence reviews are usually only conducted once, when the third party is onboarded. This presents a risk of complacency and does not factor in potential changes in the relationship or business of the third party, experts say. “Another factor to consider is the reach of the ABAC function within the company. Anti-bribery compliance may extend to multiple functions of the company, and there may be obstacles in the ABAC function’s path to ensuring compliance across multiple departments and the collection of relevant information for reporting purposes. Obstacles may include a lack of technical knowledge or conflicts of interest,” says Tan. Companies may benefit from keeping a comprehensive record of all their third-party relationships, complete with detailed documentation regarding the nature and history of each partnership. To ensure that all these relationships remain compliant with anti-bribery regulations, companies can conduct regular third-party due diligence checks, after the relationship has been established. “The implementation of technology such as automated controls and end-to-end procurement tools with in-built ABAC due diligence as part of the company’s ABAC and due diligence framework can assist the company in maintaining compliance. A balance needs to be struck between risk segregation where appropriate and ensuring the ABAC function is not treated as a silo. Companies should ensure the ABAC approach is communicated clearly across all relevant departments,” says Tan. Experts point out that in Southeast Southeast Asia, there may be a reluctance to report misconduct due to cultural factors such as concerns about betraying teammates or managers. However, companies can overcome this challenge by building trust in their compliance program and its reporting mechanism. This can be achieved by allowing for anonymity, clarifying non-retaliation policies, and sharing anonymised cases and investigation trends with employees through compliance training or newsletters. By demonstrating that the reporting program is working and accountability is being upheld, employees can develop greater trust in the company’s compliance program as a whole. “To address this cultural challenge, we advise companies to focus efforts on building employees’ trust in the compliance program and specifically its reporting mechanism to promote a “speak up culture.” For example, beyond bolstering reporting mechanisms by allowing for anonymity and making non-retaliation policies clear, companies can demonstrate that the reporting program is working by, for example, sharing particularly important anonymised cases or updating employees with high-level trends from investigations (e.g., through compliance training or compliance “newsletters”). These steps strengthen employees’ belief and trust in not just the company’s reporting system, but also its overall compliance program as they can see accountability in practice,” says Levison. Add to that the obstacles to effective anti-corruption compliance programmes in the region, explains Bush. “The legal and compliance teams at corporate headquarters outside Southeast Asia often struggle to establish effective channels for detecting, preventing, and remedying compliance risks emerging within their Southeast Asia operations. Difficulties often stem from internal organisational limitations and resource constraints. Where countrylevel finance and compliance personnel report to country-level commercial management, they may lack sufficient clout or incentives to challenge their bosses by flagging compliance risks,” he says. “A “dotted line” from local compliance and finance to headquarters is often insufficient to ensure effective guidance or oversight for the local business teams. In many MNCs, regional legal and compliance resources are stretched thin, with a single headcount in Singapore or Hong Kong covering markets from Mumbai to Melbourne,” adds Bush. THE WAY AHEAD Given the challenges there are ways in which companies operating in Southeast Asia can implement procedures in a more effective way, experts point out. “No international legal frameworks and conventions similar to the United Nations Convention against Corruption (UNCAC) or OECD Anti-Bribery Convention have existed on a regional level in Southeast Asia. However, ongoing collective effort can be observed through ASEAN Parties Against Corruption (ASEAN-PAC) which was established to front the Community’s commitment to combat bribery and corruption collaboratively. In the wake of the most recent agreement towards the group’s Action Plan 2023 - 2025 in September 2022 during the 18th ASEAN-PAC Secretariat Meeting, in which one of the proposed main action pillars to be executed is the
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