THAILAND

Disappointed by slipping global rankings for Thailand in terms of corruption, public and private organisations are coming up with concrete measures to rein in bad practices that are believed to have led Thailand to its present condition.

At a round-table discussion last week hosted by Krungthep Turakij, Utis Kaothien of the National Anti-Corruption Commission said the Cabinet would soon be presented with an integrated initiative to combat corruption.

The process will require a greater role for the National Economic and Social Development Board (NESDB), the Budget Bureau, ministries' inspectors-general, the NACC and the Office of the Auditor-General.

"The problem now is that the anti-corruption system is not integrated. It must be, also taking into account risk-management measures," Utis said at the round table titled "How to Tackle Corruptionω"

Under the initiative, the NESDB, which screens investment projects, should look at all possible channels for corruption, such as land purchases. Representatives from civic groups will join procurement committees to ensure proper prices.

Inspectors-general, whose remarks on the progress of projects have often been ignored, will then monitor whether the projects have been completed according to the terms set by the NESDB. If not, their remarks will then be sent to the NACC.

"This will require lengthy talks with many agencies. This will add duties to all. The projects could be delayed a bit, but the lost time should not be serious if one or two more conditions are attached to ensure transparency," Utis said, adding that this initiative was based on South Korea's experience and adjusted to fit the Thai culture.

NACC plans to adopt ethical rankings for public agencies, and for those unsure of their ranking it is ready to help improve the standards.

Utis asserted that the NACC alone could not eradicate corruption, but it needed support from all stakeholders, particularly the private sector, the general public and the media.

He added that the public would single out bad companies, while preventing corruption with help from the watchdogs.

Then, social recognition for those with good practices would set a new standard.

Dusit Nontanakorn, chairman of Thai Chamber of Commerce, said the association was trying to segregate good and bad members, by giving awards to ethical members.

In the next step, it will extend the scheme to non-members.

As the last step, unethical members will be denounced.

The University of the Thai Chamber of Commerce will also be assigned to maintain a transparency index for benchmarking purposes, despite the risk that it could be criticised by organisations with poor scores.

Dusit noted that in private companies, chief executives were evaluated based on financial returns, and this could be adapted by the private sector.

"Corruption is a cost to all, and it leads to damage to the entire country. We have talked about it for a long time, but actions must be in place. We need a target, let's say for Thailand's transparency ranking to be in the top 10-15. We can't afford to see it slip further," he said.

Charnchai Charuvastr, president and CEO of the Thai Institute of Directors Association, said that since good governance practices were enforced on listed companies after the 1997 financial crisis, there had been progress. In 2009, 52 of more than 500 companies won five stars, with scores of 90 or higher on the 100-point scale. These companies are encouraged to extend their knowledge to others.

Yet corruption can be seen through transactions between companies, and it can encompass public agencies.

In cooperation with the Thai Chamber of Commerce, companies bidding for government projects are encouraged to enter agreements that they will not pay bribes. It is hoped that this will lead to peer-to-peer sanctions, Charnchai said.

Waratchya Srimachand, an assistant secretary-general of the Securities and Exchange Commission, said he thought much could be done to address corruption. In the corporate world, directors must answer to shareholders. At the national level, politicians are handling national resources and are responsible to all stakeholders.

On the SEC's part, as it is hard to seek criminal penalties, the commission plans to seek civil penalties for violators.

While the regulatory framework could be rigid, a principle-based approach would be in place whereby all directors must regulate themselves.

Whenever they are involved in any decision, they must make sure they are performing tasks according to good principles. Once investigated, they must be ready to support their decisions.

Juree Vichit-vadakan, secretary-general of Transparency Thailand, noted that Thais should beware that corruption prevents financial help for the underprivileged.

The school milk project was highlighted as an example. Some principals offer cheap products. Others collude with suppliers who deliver an exact amount, but to many schools, so that the last school supplied could receive spoilt milk.

If students complain to their parents, the well-to-do will simply buy their children fresh milk. However, the poor have no say.

"The more powerful they are, the more they exploit their power. This will lead to greater disadvantages to people.

"Only stronger public power will plug this hole. This vicious cycle must be eradicated," she said.

Juree noted that there were ways to improve the situation. First, the witness protection scheme must be changed.

There should also be disclosure of procurements by public agencies, for comparison purposes. Awareness of corruption must be heightened, as public perceptions of right and wrong and fairness remained distorted.

"Actions are motivated by perception. We can start with children, as social sanction matters," she said.

"Finland enjoys a high transparency ranking.

"People there, no matter how rich they are, refrain from showing off their wealth, as doing so could put them at risk of being denounced by others."

Waratchya said that as companies embrace corporate social responsibility, they should focus more on software, not hardware such as buildings.

Instead of a school building, for example, they should focus more on teachers.