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What Businesses Need To Know About Singapore’s Anti-Corruption Regulations And How To Implement Best Practices

Singapore was ranked among the top 5 least corrupted countries in the world in 2022, according to anti-corruption body Transparency International’s Corruption Perceptions Index (CPI). As the only Asian country in the top 10 out of a list of 180 countries, it’s an accolade that shouldn’t be taken for granted.

Since its days of self-government in 1959, Singapore has adopted a zero-tolerance stance towards corruption. As a small city-state with no natural resources, our ability to operate on the meritocracy principle provides us with a competitive advantage in attracting foreign investment.

Given that 86% of all corruption cases in 2020 were from the private sector, here are some things businesses should take note of regarding the anti-corruption regulations and how to combat corruption.

What Constitutes As Corruption?

An act of corruption constitutes receiving, asking for, or giving any forms of gratification, such as any amount of payment, gift, sexual act, or other property, as an inducement or reward to someone in exchange for a favour with a corrupt intent. These favours include unfair business advantages, confidential information, and other special privileges.

The Four Pillars Of Singapore’s Corruption Control Framework

Singapore’s acclaimed reputation as one of the least corrupt countries in the world is a result of an effective corruption control framework.

At its base, the political will of the government since 1959 under then-Prime Minister Lee Kuan Yew to weed out corruption at all levels has continued to be observed and enforced to date. This “zero tolerance” culture has also become part of the way of life in Singapore.

Next are the four pillars, of which one is Law. There are two key legislations that help fight corruption in Singapore. First is the Prevention of Corruption Act (PCA), which applies to persons who give or receive bribes in both the public and private sectors. Second is the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA), which is applied to seize ill-gotten gains from corrupt offenders.

The second pillar is Adjudication. In Singapore, there is an independent judiciary where the Chief Justice is appointed by the President on the advice of the Prime Minister and the Council of Presidential Advisers. They adopt a stance of deterrence by meting out stiff fines and imprisonment towards corrupt offenders.

The third pillar is Public Administration, which itself is guided by a Code of Conduct that sets out the high standards of behaviour expected of public officers based on the principles of integrity, incorruptibility, and transparency.

The fourth and final pillar is Enforcement, which is headed solely by the Corrupt Practices Investigation Bureau (CPIB). The agency reports directly to the Prime Minister enabling it to operate independently. It investigates and enforces the tough anti-corruption laws impartially for both the public and private sectors.

Together, they stem corruption in Singapore and ensure a system that is based on mediocracy and transparency.

source: <a href="" rel="nofollow noopener" target="_blank" data-ylk="slk:CPIB;elm:context_link;itc:0" class="link ">CPIB</a>
source: CPIB

Punishments And Penalties

Under the Prevention of Corruption Act (PCA), any person found guilty of corruption shall be liable to a fine not exceeding $100,000 or imprisonment for a term not exceeding 5 years, or both. However, if the matter or transaction is related to a contract or proposal for a contract with the government, the punishment is enhanced to a fine exceeding $100,000 or imprisonment for a term not exceeding 7 years, or both.

Additionally, it is also the legal duty of any person aware of any public officials engaging in corruption activities to immediately report and give information to police under the Criminal Procedure Code Section 424.

Read Also: Tax Evasion: What Happens If You Don’t Report Your Taxes Accurately

Companies Can Implement PACT, A 4-Step Guide To Preventing Corruption

Here’s a simple 4-step guide, termed PACT by the CPIB, that businesses can implement to prevent corruption within their organisation.

#1 Pledge

As leaders of the organisation, senior management or the owner(s) of the business must take the lead by pledging their commitment to zero-tolerance for corruption. This could set the tone for a work culture that is based on core values like honesty, fairness, and openness.

Implement Anti-Corruption Policy

Businesses can also implement an anti-corruption policy that prescribes a set of rules and principles for conduct and behaviour to which employees and business partners must adhere. Here are some key features that can go into the anti-corruption policy:

  • Declaration to abide by Singapore’s anti-corruption laws

  • Denouement of any form of corruption and bribery

  • Undertaking to set-up, maintain and regularly review corruption-susceptible operational processes, including providing regular training to staff

  • Supporting and protecting whistle-blowers

  • Compliance with regular monitoring and auditing

Create A Code Of Conduct

Businesses should also consider creating a code of conduct to serve as an unambiguous guide for all employees to follow in all areas of business activities, especially where corrupt practices are likely to occur. The code of conduct should address what constitutes corrupt behaviour and conflicts of interest. It should also define what is acceptable in relation to gifts and entertainment and obtaining personal loans from clients/customers.

#2 Assess

Next, companies should conduct periodical risk assessments to safeguard their integrity and interests. This would aid in the company’s corruption prevention capability.

One way companies could identify potential corruption risks is by conducting consultation sessions with employees whose job functions are vulnerable to corruption. Additionally, companies could also network with other business partners to share best practices and knowledge or hire external professional consultants.

#3 Control & Communicate

Having a clear and carefully worded anti-corruption policy and a code of conduct alone may not be enough to stem corruption from your business. It is imperative to also have strong internal controls that are capable of exposing irregularities that might be the result of corrupt practices. Companies need to ensure they have accurate records, put in place clear operating procedures, and conduct regular audit checks to detect red flags or suspected corruption.

At the same time, companies should have a robust reporting or whistle-blowing system that encourages employees to report anonymously of any suspicious activities without fear of reprisal or reprimand if done in good faith.

Lastly, the company’s efforts towards anti-corruption must be clearly communicated to all employees, which can be done at various stages such as employee induction, corporate trainings, and company town hall meetings.

#4 Track

Finally, companies should undertake timely tracking and evaluation of the anti-corruption policies put in place to ensure efficiency and determine whether improvements or modifications are required.

Read Also: What Is Your Responsibility As A Company Director In Singapore?

Play Your Role As A Corruption-Free Business  

Corruption is caused by greed for amassing wealth through unethical means. This can be detrimental not just to a company’s reputation but also to society as a whole, as it may deprive others of essential services or opportunities.

For a country like Singapore, corruption also erodes our value proposition and competitive advantage to foreign investments. Local businesses can look to implement the PACT to protect their businesses from corrupt practices and play their part in keeping the country’s system clean.

The post What Businesses Need To Know About Singapore’s Anti-Corruption Regulations And How To Implement Best Practices appeared first on DollarsAndSense Business.