An NGO-backed scheme seeking to clean up corruption in the private sector has the support of major banks, but other business people are less keen
The chairman of the Clean Business Initiative steering committee, Hagar Social Enterprises CEO Talmage Payne (left), and ANZ Royal CEO Stephen Higgins answer questions at the CBI launch Monday in Phnom Penh.
PLANS for the Clean Business Initiative organised by development NGO Pact Cambodia were announced Monday, with major Cambodian banks endorsing the NGO-backed scheme.
"As a bank, we are in an environment where we have to be responsible and transparent to our stakeholders," said In Channy, president and CEO of Acleda Bank.
In Channy added that the Clean Business Initiative, or CBI, would help lay the foundation for the Cambodian Stock Market by establishing a large pool of businesses whose practices were already regulated by a third party.
Stephen Higgins, CEO of ANZ Royal, said at the launch that corruption in Cambodia is "a major disincentive for multinationals to invest".
Both said they would promote the initiative to their commercial customers but would not make membership a necessary prerequisite for account holders.
Pact's Aaron Bornstein said the NGO wants the program to establish a recognised standard for all business in the Kingdom.
"We want to make it into a well-known brand," he said.
Bornstein said that the Cambodian businesses participating in their focus groups were enthusiastic about the scheme and offered feedback that led to the expansion of the CBI's definition of corruption. While he expected there would be strong pressure within the private sector to join in order to earn a mark of trust, he said the program was not pressuring companies to enlist.
But multiple sources say that Pact's CBI project has received mixed reviews from representatives of the international business community in Phnom Penh. When a Pact official spoke to the British Business Association of Cambodia several months ago to explain the program the reception was particularly hostile as it was perceived that the private sector was being accused by Pact of colluding with corrupt government officials.
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As well, it was not clear to many attendees how the program was supposed to help stop public-sector corruption, and some businessmen wondered if the CBI wasn't just another NGO boondoggle cooked up by good governance consultants.
More recently, one executive of a major international company was told by a client firm that had agreed to join the Pact initiative that if it did not also sign up for the project the firm would have to stop using its services.
Outraged at what was perceived to be a form of coercion to join the effort eventually reached the ears of a senior USAID official, who was not amused with the prospect that US government funds were being used to strong-arm businesses to join the CBI initiative.
Pact denied Monday that anybody is being pressured to join the initiative, with Bornstein saying that it would ultimately be in a business's best interest to participate. "Foreign investors will probably look to the groups registered in CBI first," Bornstein said.