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Whistleblowing systems and the development of anti corruption regulation in Thailand

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Fraud, most notably corruption and bribery, has been a persistent threat to organizations worldwide, wreaking havoc on each country’s political and economic systems. Thailand is one of the countries that has long suffered from fraud.

Being aware of the involvement of private sectors in many cases of public corruption and bribery, the Thai government has expanded its anti-corruption regulations over time, targeting not only the public but also private sectors. Corporations that fail to comply with the regulations will be subject to criminal liability and legal fines.

Thai’s anti-corruption regulations

One of the regulations is the Organic Act on Anti-Corruption B.E. 2561 (2018) (“the New Anti Corruption Law,”) which replaces the 1999 Organic Act on Counter Corruption (the “Old OACC”) and all of its amendments.

Unlike the Old OACC, under this new law, corporations are included in legal entities that can be liable for bribery. Corporations are liable if the bribes are given by an associated person, who can be employees, joint venture partners, agents, affiliated companies, or anyone on behalf of the corporations.

Another significant amendment to the New Anti-Corruption Law is that legal entities also include foreign juristic persons, which means that the law applies to corporations registered overseas but operating in Thailand.

However, the regulation also mentions that the liability can be reduced if the corporations implement appropriate anti-corruption measures.

Another regulation enforced is the Public Procurement Act. As we are all aware that public procurement is one of the activities that is most vulnerable to corruption, the regulation establishes rules for the procurement activities of public officials.

Similar to the measures mentioned with regards to the New Anti Corruption Law, Public Procurement Act requires a business that would like to engage in public procurement for a project valued at THB 500 million (approx. USD 15 million) or more to put in place an anti-corruption policy and have appropriate anti-corruption measures.

Appropriate anti-corruption measures

It is essential to note that effective anti-corruption measures safeguard corporations, their directors, and related individuals from detrimental consequences of corruption and bribery charges that might jeopardize their image and reputation. Although neither the regulation specifies what constitutes appropriate anti-corruption measures, the office of the National Anti-Corruption Commission (NAAC) has issued guidelines, which state that the measures comprise eight fundamentals. One of them is communication mechanisms that encourage the reporting of suspicion of bribery.

A whistleblowing system so far is a reporting tool that meets the fundamentals and has been proven effective in detecting fraud.

According to PwC survey in 2020, 33% of Thai companies were affected by fraud, corruption, or other economic crimes during the last two years, and almost one-third of crimes were discovered by someone alerting the company, either by informal tip-off (20 %) or a formal whistleblowing hotline (10%).

As the regulations are being enforced, implementing a whistleblowing system as part of anti-corruption measures becomes vital for corporations. By implementing a whistleblowing system, the corporations will basically adhere to the principle of transparency. Through the whistleblowing system, whistleblowers can raise their concerns securely and safely.

Integrity Asia, with two decades of experience working in the field of compliance, provides whistleblowing services for clients from various business backgrounds. Through our Canary Whistleblowing System, Integrity Asia provides a combination of several reporting channels that are centralized on the website application thereby increasing our client’s accessibility to reports, whilst ensuring the anonymity of the whistleblowers.

Safeguard your corporation from adverse implications of bribery and corruption, contact us today!

Image by elbgau from Pixabay

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