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Anti-graft act to attract international investors

July 10, 2017 - 16:04 By Korea Herald
Graham Dodds
The Australian Chamber of Commerce in Korea is the peak body representing Australian and Korean business interests in Korea with over 220 members. Our mission is to promote Australian business, the Australia-Korea business partnership and AustCham members’ interests in Korea by being an effective source of information, connections and representation. 

The Improper Solicitation and Graft Act, or the Kim Young-ran Act, came into force in late September 2016 with laudable objectives of eradicating corruption and bribery in Korean society and business culture. AustCham welcomes the measures designed to create a fairer, impartial and transparent marketplace in Korea. AustCham believes that in a modern and globalized Korean business environment there is no room for improper business conduct or practices through facilitation payments or money-for-favors.

AustCham firmly believes that this act will not only assist to evolve the Korean business environment but help foreign companies conduct business on a level playing field in Korea. This will foster greater confidence in the economy, attract international investors and help foreign businesses view and value their Korean counterparts as credible business partners.

AustCham believes that the Korean community expects the highest level of conduct from both government organizations and private business enterprises alike. Our member companies understand the obligation to act with the highest ethical standards, which is part of our social license to operate in Korea. Therefore, we view the Improper Solicitation and Graft Act to be consistent with the values and principles that guide the conduct of our member companies in engaging in business activities not only in Korea but in all parts of the world.

Australian enterprises are well-accustomed to having internal processes and policies to ensure compliance with international standards on improper solicitation and anti-corruption legislation. In particular, companies with global profiles and operations have high awareness of the requirements of the United States Foreign Corrupt Practices Act (1977) and the United Kingdom Bribery Act (2010) and the extra-territorial application of both these laws.

As such, many AustCham member companies already operate under advanced internal compliance regimes and these systems and processes, have for the most part, enabled our member companies to have a smooth transition and adapt to the new Korean legislation. Ethical conduct is a core company value for our member companies, whose workforces are educated on the expected behavior in relation to improper solicitation. Several member companies publicly report on any contraventions.

On the introduction of the new legislation, AustCham had early engagement with the Anti-Corruption and Civil Rights Commission, as the organization leading the implementation of the new legislation. The ACRC has provided AustCham with several opportunities to engage directly with them and they remain open to ongoing engagement.

The regular engagement with the ACRC has enabled AustCham to increase our understanding of the new legislation, the approach to implementation and obtain clarity in certain areas. In turn, AustCham has been able to increase the awareness of the new legislation among our member organizations and gain an understanding of the areas where they may require more clarity.

AustCham has received positive feedback from our members that they are witnessing changes in Korean business culture and practices since the introduction of the Kim Young-ran Act. We are optimistic that the act will achieve its stated objectives for the betterment of Korean business and society.

AustCham firmly believes that the proper implementation of the act should be the ongoing focus. There is a need for awareness that the one-size-fits-all aspects of the act may have some unintended consequences. It will remain crucial that any prosecutions under the act are targeted at instances of genuine acts of corruption and bribery; rather than focusing on unintended, innocent, minor breaches.

AustCham encourages the government to ensure the ongoing engagement, guidance and clarification on the issues concerning the practical implementation of the act. We acknowledge and appreciate that the ACRC has been responsive, pro-active and facilitative. AustCham will continue to act as a channel and voice for our members on this issue. We look forward to continuing to cooperate with and support the efforts of the ACRC to realize the objectives of the act.

By Graham Dodds

The writer is chair of Australian Chamber of Commerce in Korea. -- Ed.