DICA’s anti-corruption rules not clear on donations or political contributions

In their latest drive to tackle corruption, the government released a code of ethics prohibiting businesses from bribing officials, but it remains unclear what a company and charities and individuals associated can and cannot do. A non-profit organisation urged Nay Pyi Taw to consult experts and require companies to set up a code of conduct to tackle the issue effectively.

The Directorate of Investment and Company Administration (DICA) under the finance ministry issued an anti-corruption code of ethics announcement governing organisations doing business in Myanmar. The code of ethics covers all dealings and “business activities” between government organisations and all entities in the private sector.

The announcement prohibited companies and organisations incorporated under the 2017 Companies Law from six activities with dealing with the government: giving gifts, hospitality and entertainment, giving support for travel, giving money to facilitate business activities, giving social contributions and charity donations, giving political contributions and donations, giving assistance or support in the employment between organisations related to a company for personal interest. The “business activities” category refers to activities which involve providing money or financial benefits, directly or indirectly, in order to allow a business to move ahead “smoothly”. Presumably, this covers licencing, officials approvals, endorsements, the tender process and any decision-making involving the government.

However, there needs to be clarity about what firms, foundations and related individuals can and cannot do. What should be considered is the risk of corruption. If a payment or donation is intended to influence a decision of the government, it should not make any difference whether the bribe comes from the company, its owner, shareholder or individuals with vested interest who do so under the pretence of “personal/ private capacity”.

Vicky Bowman, director of Yangon-based Myanmar Centre for Responsible Business, told The Myanmar Times that combatting corruption requires a joint effort by government and the private sector and that the anti-graft body has made good progress.

“It is very welcome that the new chair of the Anti-Corruption Commission has established a regular dialogue with the business community. This should facilitate effective action on corruption hotspots since businesses are well-placed to identify these. That will then enable the Commission to raise with government departments where they need to take action to eliminate corrupt practices,” she said. Owing to the 4th amendment to the Anti-Corruption Law, the Commission can now even take investigative action on its own initiative, instead of only acting on complaints.

Grey areas

In addition, the 4th amendment empowers the Commission to issue a Notification concerning how companies should set up a code of conduct to prevent corruption.

“We hope that there will be the opportunity to contribute to this Notification and any associated guidelines. There are some good international examples of guidelines which can serve as a model,” she went on. For example, the Thai National Anti-Corruption Commission’s “Eight principles to prevent bribery” includes the need for “tone from the top”, risk assessment of the firm’s key exposures to bribery, specific controls for high-risk areas and for business partners, accurate accounts, human resources management, reporting mechanisms, including internal “whistleblowing” and more. If a firm has those controls in place, it can make a more accurate assessment of the “grey areas”, such as donations and political contributions.

Concerning political contributions and donations, it is difficult to distinguish between the firm, their Foundation (if they have one), and the business owner, especially in Myanmar where there are so many family-owned companies.

“There are Myanmar companies which publish policies saying they do not make political donations, but we all know their main owner of the company does. The most effective control on this is always going to be transparency, with both the recipient political party or charity, and the company – including its major shareholder – publishing details of the donation, and ensuring accurate and audited accounts.”

DICA’s guidance seems to leave some questions unanswered, especially regarding legitimate hospitality. It made no mention of a cap on gifts, the regulation on overseas trips purportedly for educational purposes or the enforcement mechanism. For example, if there isn’t a cap on gifts, snacks and drinks will be prohibited in meetings and lunch for officials during an all-day workshop in a hotel in Nay Pyi Taw will not be allowed.

According to the Myanmar Centre for Responsible Business, some of these grey areas, such as travel sponsorship for officials and seasonal gifts, were already addressed in the guidelines established by the National League for Democracy-led government in April 2016.

“Companies should ensure that their employees comply with these, and report to the Anti-Corruption Commission where officials are in breach of them,” Ms Bowman explained.

Guidelines issued in 2016

The President’s Office in 2016 issued a set of guidelines for acceptance of “gifts”, which is defined as money and other items of value such as gold, silver, air tickets, free accommodation, meals, entertainment, golf club membership etc.

Gifting is prohibited unless it is with a value of no more than K25,000, while the maximum value of gifts which may be received from a person or organisation within a year shall be K100,000. Gifts which are received solely because of family or personal relationship and that there is no direct or indirect conflict of interest between the two parties are permitted, as well as gifts with a value of no more than K100,000 and which are given on a special annual occasion such as Christmas or Thadingyut.

Gifts with a value of no more than K400,000, costs of travel for official purposes (e.g. air ticket, accommodation and meal expenses), scholarships and medical expenses are allowed if they are endowed by foreign governments.


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