Thailand’s economy, with a GDP of US$506 billion in 2021 (as per World Bank figures), attracted an estimated US$2.5 billion in foreign direct investment (FDI) last year, according to the country’s Ministry of Commerce. Good governance of private companies in Thailand supports GDP growth and can increase FDI, while corruption seriously undermines economic development because it poses a threat to foreign and domestic investment.
Thailand’s National Anti-Corruption Commission (NACC), which was established as an independent commission in 1999, is helping to create a safe business environment in Thailand by combating corruption involving the government and public agencies. The NACC operates under the principle that deterring corruption before it can be committed is critical to fighting it, and one of the ways the organization is accomplishing its mission is by tackling the supply side of corruption. To do so, cooperation between the private sector and the NACC is essential, and the organization has the power to take legal, policy and enforcement measures to help create a business culture in the Kingdom that is proactive, a deterrent, and which does not tolerate corruption.
To prevent corruption and encourage good corporate governance and transparency in the private sector, the NACC’s Bureau of Good Governance Development and Promotion is innovating and developing a body of knowledge on good governance for the private sector, as well as disseminating that knowledge to stakeholders.
Targeted stakeholders include private sector organizations that are counterparts to government agencies, to ensure that they understand legal and regulatory requirements and international standards of business conduct. The NACC also has local and provincial chapters charged with supporting good governance and private corporate governance at the local level, and offers guidance to them on how to do so. In addition, the NACC organizes regular seminars to promote good governance.
The NACC has also developed, in line with existing international standards on the prevention of corruption, a group of eight essential principles to prevent bribery.
The NACC’s Eight Principles to Prevent Bribery
1. Strong, visible policy and support from top-level management to fight bribery
The NACC strongly advocates that top-level management of any private organization must adopt a zero tolerance policy against bribery of state officials and set the tone to shape corporate culture while ensuring the formation of internal control measures to prevent it. According to the NACC, “Top-level management of a juristic person must express strong, clear and visible intention to fight bribery through its policies and business operations. In addition, it should be the main decision maker on activities with risks of bribery.”
2. Risk assessment to effectively identify and evaluate exposure to bribery
Private organizations doing business with the Thai government need to do a bribery risk assessment specific to their particular operations and sensitivities, and should take into consideration external factors including location, type of project and business partners, as well as the nature of contact with state officials.
3. Enhanced and detailed measures for high-risk and vulnerable areas
Organizations doing business in situations where there is a higher risk of bribery should establish detailed processes and procedures. High-risk situations might include those where facilitation payments, hospitality expenses, donations, etc. are involved.
4. Application of anti-bribery measures to business partners
Though private companies do not have direct control over their business partners and affiliates, if they are relying on the latter to engage or act on their behalf, they may still be held liable for misdeeds. To protect themselves, private companies should impose their anti-bribery programs on business partners.
5. Accurate books and accounting records
As accounting systems can be used as tools to hide illegal costs relating to bribes, organizations must have effective internal controls that include having an accurate and transparent accounting system. Again, success begins at the top, and high-level executives must prioritize good systems and participate in audits to detect irregularities.
6. Human resource management policies complementary to anti-bribery measures
A commitment to compliance should be reflected in human resource management practices, as well as throughout the company. To that end, recruitment, promotions, performance evaluations, compensation and training should all reflect an organization’s commitment to compliance with anti-bribery laws and regulations.
7. Communication mechanisms that encourage reporting of suspicion of bribery
Employees must be protected from retaliation and encouraged to report violations, suspicious cases and general weaknesses in internal controls in order to protect organizations and allow management to prevent illegal behavior or mitigate any damage that could occur.
8. Periodic review and evaluation of anti-bribery measures and their effectiveness
As risk factors change over time, top-level management must periodically review and evaluate their anti-bribery measures to ensure that they are appropriate, and make any modifications that are necessary if not.
Following these principles will strengthen the private sector, and a strong private sector that operates with good corporate governance and transparency, according to the NACC, will also improve the country’s trade and investment, and help spur and maintain economic growth.
Find out more on NACC’s website.