Eliminating Corruption (June 2005)

The Issue

Corruption and bribery remain significant and unfair barriers to trade and economic development in many countries throughout the Asia-Pacific region. These practices increase costs, stifle fair competition and represent a significant deterrent to investment. Corruption thrives when the rule of law is weak and is a major barrier to economic and social development.

Position7

The Asia-Pacific Council of American Chambers of Commerce (APCAC) urges businesses, governments, international organizations and multilateral financial institutions to intensify their efforts to stem official corruption, to eliminate bribery in business transactions, to increase transparency and to promote good governance in general.

APCAC strongly encourages governments in the region to:

• Create credible and transparent legal and judicial systems to promote the rule of law.
• Enact legislation that protects the sanctity of contracts and implement effective dispute settlement methods, including independent arbitration.
• Establish independent systems to monitor the integrity of government agencies.
• Promote judicial reforms to eliminate long delays, corruption, and incompetence.
• Assure the integrity of capital markets and financial disclosure.
• Improve public accounting, auditing, and corporate governance standards.
• Implement transparent bidding processes in areas such as procurement and privatization.
• Enact effective bankruptcy and insolvency laws.
• Limit discretionary authority for officials who perform inspections or audits, oversee procurement, grant licenses and permits, or provide final approval for contracts or projects..
• Provide reasonable access to public records and information.

APCAC urges governments in Asia-Pacific to make it illegal to bribe government officials and judicial authorities at all levels. In countries that already have laws in place, but where corruption persists, APCAC calls for vigorous enforcement and prosecution under those laws.

Rationale

Corruption is a fundamental concern for American businesses in Asia. It creates a negative investment climate, stifles economic activity, distorts prices and undermines national legal and judicial systems. Corruption harms not only the citizens of the countries where it exists, but also US and other foreign businesses operating in these countries. Corruption is a major factor in reducing competitiveness in an increasingly globalized economy.