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Five firms to sign with ACU

A general view of Herbalife head office in Phnom Penh last year
A general view of Herbalife head office in Phnom Penh last year. Herbalife is one of five companies set to sign an anti-corruption agreement with the ACU today. Pha Lina

Five firms to sign with ACU

To mark International Anti-Corruption Day, five firms – consumer finance operator Mega Leasing, garment manufacturer Pactics, rice miller Loran Group, confectionary producer Aprati Foods (Cambodia) and US-based nutrition company Herbalife – are expected today to sign agreements with Cambodia’s Anti-Corruption Unit (ACU), promising to eliminate bribery from their companies, sources close to the deals confirmed.

The companies would join Coca-Cola and Prudential as the only seven firms to commit to the ACU’s anti-corruption contract, which stipulates that signatories must operate entirely “corruption-free”.

“It also promotes a transparency culture and creates a clear direction for staff to benchmark the laws and regulations while the staff is dealing with the governmental agency,” Paul Popelier, country manager of Coca-Cola said yesterday in an email.

Coca-Cola was the first company in Cambodia to sign the ACU memorandum of understanding (MoU) last December. According to Popelier, the company has since reported instances of corruption to the ACU via a number of communication interaction “points”.

“ACU takes action upon our notifications and supports requests from Coca-Cola.… We report the cases that impact on our business and society as a whole,” Popelier said.

But it is not only the eradication of illicit payments between the government and the private sector that the ACU MoU stands to achieve. The agreements are also proving to be a promising addition to promoting Coca-Cola’s image in Cambodia, Popelier said.

“The MoU, via focal points, creates a good and effective cooperation between the company and the ACU when a potential bribery/corruption issue is surfacing. It also sends a message to stakeholders that we are not tolerant [of] any form of bribery/corruption.”

Bretton Sciaroni, head of the American Chamber of Commerce in Cambodia, said scepticism among the business community over the impact of the MoU has dissipated since Coca-Cola began cooperating with the anti-corruption body.

“When lower level officials have tried to extract unofficial fees, the MoU has been effective in deterring them. With the ACU making arrests on a weekly basis, government officials do not want to run afoul of the law,” he said.

Pankaj Banerjee, CEO of Prudential (Cambodia) Life Assurance, meanwhile, says the ACU’s signing up of firms to its anti-graft campaign can benefit Cambodia’s private sector as a whole.

“We genuinely believe that strong corporate governance is a long-term competitive advantage and in general makes the overall business environment efficient,” Banerjee said. “We appreciate initiatives such as the ACU’s MoU and would like to partner in putting efforts to create a more effective business environment.”

Exact details of the MoUs and the penalties associated with breaching the terms of agreement remain confidential. The ACU, however, released some key points of Prudential’s agreement after the signing on October 10. This includes training employees to promote corruption-free interactions with government officials, communicating openly and reporting to the ACU all issues involving corruption that the firm faces.

The ACU also says it is committed to keeping all sources and evidence provided by signatories confidential and intends to open investigations when it has been presented with enough cause to do so.
However, doubts remain over the effectiveness of the agreements.

Preap Kol, executive director at TI Cambodia, said the intentions and the impact of the MoU’s are largely unclear.

“It is very difficult however to assess how much weight these MoUs carry as the process is not fully transparent – the long-term goals of these MoUs and how they will benefit the general business environment in Cambodia has not been clearly expressed,” Kol said.

“It is not clear whether these companies sign the MoUs to gain some sort of protection from the ACU, in which case there would be no benefit for the general business environment, or to actually promote clean business standards.”

Kol called for sector-wide principals to be applied to all private firms, instead of the voluntary basis method that is currently in operation.

International Anti-Corruption Day celebrates the anniversary of the UN Convention against Corruption, which has been ratified by 171 nations including Cambodia.

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