The ICAC's Advisory Services Group helps the private sector with advice on how to prevent and fight corruption, writes Wattie Lo
The old saying 'prevention is better than cure' was put into practice by the Corruption Prevention Department of the Independent Commission Against Corruption (ICAC), when it set up a specialized taskforce offering free and confidential advice to businesses on ways of preventing corruption.
The Advisory Services Group (ASG) was formed in 1985 to extend prevention efforts from the public sector to the private sector. It is run by a group of specialists with diverse industrial and professional backgrounds to give tailor-made advice to business organizations on how to mitigate the risk of corruption and related malpractice.
"The numbers of non-anonymous complaints and management referrals have been steadily rising in recent years," says H C Ng, Head of the ASG. "This demonstrates that the public has become less tolerant towards corruption."
The target of ASG's services is a range of high-risk areas including tendering and procurement practices, inventory control, sales, accounting, staff administration, and production and retail processes. The group assists private companies in different industries in identifying corruption risks, devising and promulgating codes of conduct for staff, and making recommendations for remedying procedural loopholes that may give rise to corruption opportunities.
Mr Ng says: "We particularly aim to promote our services to small- and medium-sized enterprises, as many of them don't have the experience or the manpower required to figure out effective internal controls against corrupt practices."
Hiroko Sugahara, Senior Assignment Officer of the ASG, adds: "We not only respond to those in need of our tailor-made advice on request, but also to victims of corruption [i.e. companies which have suffered from corruption]. We render a full proactive consultancy service to address their concerns."
She explains that the ASG works very much like a management consultancy requiring its officers to make on-site visits, hold face-to-face discussions with clients and compile reports listing the risks identified with the corresponding measures for consideration by the clients.
While the ASG has the statutory responsibility to offer corruption prevention advice to any person seeking assistance, it is not mandatory for private companies to take up the recommendations made by the ASG but are strongly encouraged to do so, explains Mr Ng, citing the provisions of the ICAC Ordinance.
What lies ahead?
As differences between national and international business practices have progressively blurred, maintaining a level playing-field is absolutely imperative for Hong Kong to maintain its status as an international financial hub in Asia. Mr Ng explains that Hong Kong exercises jurisdiction over corruption matters on a territorial basis, meaning that any business, whether foreign or local, engaging in a commercial transaction in Hong Kong will be subject to the same legal treatment under the law.
Mr Ng points out that the real challenge facing the ASG is to safeguard the existing level playing-field against the ills of corruption, while making the best use of the group's manpower capacity.
"For instance, after the revelation of the short-piling scandal about two years ago, the ASG devoted a great deal of resources to raise probity awareness and promote best practices in the construction industry," Mr Ng says. "But for us to work alone wasn't the best way to tackle corruption in the industry and we fully recognized the importance of working in partnership with the stake holders, including construction professionals, contractors and developers in a concerted effort to avert entrenched corruption in the construction industry."
Hoping to reduce its rising caseload, the ASG has also drawn on past experience to lay down some general guidelines in the form of 'Best Practice Packages' (A4-size booklets), which cover over 20 areas of potential corruption risk. However, he notes that these 'Packages' remain general preventive measures and only offer clients typical solutions. He explains: "We don't intend to discourage people from using our services [by relying solely on these publications]. We want to raise awareness about corruption among those who can't afford the time or are initially skeptical about our work...This is why we named ourselves Advisory Services Group in the first place, to emphasize our professional consultancy role!"
The ICAC's 2001 annual report showed that the number of corruption complaints reached 4,476 compared with 4,390 in 2000. Of that number, 3,261 cases were considered pursuable, up four per cent from the number in 2000. Of the 4,476 complaints, 347 concerned public bodies, 513 the police, 1,074 government departments, and 2,542 the private sector. While the number of corruption complaints against the police and government departments dropped slightly in the past two years, those against the private sector and public bodies continue to rise steadily.
Mr Ng argues that due in a large part to a decline in company profitability, the Asian financial crisis from 1997 to 1999 exposed some graft-induced frauds and under-the-table dealings that took place when the economy was in good shape.
He concludes: "While it's uncertain whether the coming decade will see a reverse trend in the corruption figures...there are hopes that our services will help curtail corrupt behavior by way of putting into action the three-pronged strategy, investigation, corruption prevention and community education."
Private companies wishing to refer to the 'Best Practice Packages' or inquire about other services are welcome to contact the ASG directly at email@example.com or on 2526 6363. The ASG will respond to any request within two working days.