At Glover Cottages on Tuesday November 10, Michael Ahrens, the executive director of the Australian Chapter of Transparency International, discussed the prevalence of corrupt business practices in Southeast Asia, and the ethical implications for Australian companies that are seeking to do business in the region.

Michael argued that Australian companies are encouraged to look outwards as the Australian market is too small for growing businesses. Michael explained that Australian companies should explore the exciting opportunities presented by the rapidly expanding Southeast Asian markets but should be aware of the ‘cultural differences’ that exist between Australia and Southeast Asia that may be  obstacles to the success of these businesses. Notably, corrupt practices may not be illegal, but common in the region. However, Australian businesses are rarely prepared for, or informed about, such differences in business practices. Consequently, the ethical aspect of reconciling these ‘cultural differences’ for Australian companies in the region is rather neglected. In this regard, Australia needs to discuss the prevalence of corruption and corrupt practices in doing business in the region, and better prepare their businesses accordingly.

Michael suggested that this moral dilemma is heightened when competitors participate in these type of practices, which forces or encourages Australian businesses to either engage in corrupt practices (and remain competitive) or to eschew illegal activity and be hit financially.

While Michael acknowledged the complex nexus between pragmatism and ethical standards from which Australian companies in the region may suffer, he warned of a direct correlation between corruption and inefficient distribution of resources and degradation of working conditions. He gave an example of the 2013 Rana plaza collapse in Bangladesh. The building, which housed over 3,000 female garment workers, collapsed due to corrupt practices complemented by the lack of regulations and oversight in the construction of the building. Therefore, Michael argued that corrupt practices could have broader implications on human rights and human lives.

Nevertheless, Michael advised against reducing this narrative of corrupt practices to a simplistic dichotomy between West vs East. Other countries in Asia, such as Singapore, rank highly on the Corruption Perceptions Index (CPI), which demonstrates their intolerance for unscrupulous practices in the private sector. China has also moved towards increased transparency in the private sector. Therefore, the issue of corruption is not culturally defined nor inherent. Instead, Michael argued that good governance is key to combating corruption in the region.

Report by Jawoon Kim

For more information on TIA please go to: www.transparency.org