Most of the corruption and bribery cases involving foreigners in Vietnam have been discovered and publicized by foreign agencies and organizations. From the case of Australian company Securency bribing State Bank of Vietnam (SBV)’s officials to win a contract to print polymer money more than 10 years ago to the Japanese company Tenma bribing some customs officers in Bac Ninh province last year or a number of cases the World Bank pointed out recently, although occurring in Vietnam, they were not discovered by the Vietnamese authorities. This lack of information is due to the unsubstantial corruption involved foreigners or Vietnam’s Government has not paid attention to this type of crime?
Unclear more or less, increase or decrease
Although anti-corruption activities, also known as “furnace works” are considered to be accelerating in recent years, official information on anti-corruption activities, bribery with foreign elements is quite rare on the website of the Government of Vietnam.
It is impossible to know exactly how many cases of corruption or bribery involving foreigners and foreign companies in Vietnam and does the issue increase or decreases. The Government Inspectorate’s reports on anti-corruption activities in 2019 and 2020 say there are many achievements against corruption, but none of the lines mentioning the anti-corruption activities with the involvement of foreign factors. The RFA reporter has contacted the Government Inspectorate’s Anti-Corruption Department several times but was not provided with this information.
The rampage of corrupt practices by public officials at work, on the streets, in hospitals, or at schools and the presence of many high-ranking officials in many recent serious cases have caused people to think that corruption and bribery with the involvement of foreign elements is no exception. Commenting on the news that the World Bank punishes Grupo Mecánica del Vuelo Sistemas group based in Spain for collusion and fraud at 2 Hanoi Urban Transport Development and Sustainable Development project in Danang city, many RFA readers said that by working in Vietnam, foreign enterprises have been forced to bribe because “if you do not bribe, you cannot do business in Vietnam!”
Ms. Nguyen Thi Kieu Vien, director of Towards Transparency – an international organization specializing in fighting corruption and promoting transparency and integrity, in an interview with RFA also affirmed: The viewpoint that bribery and corruption are “commonplace in Vietnam” in business activities is also quite common in Vietnam. She said that although the business environment in Vietnam has had some positive improvements, such as mentioning the need to practice a culture of business integrity, there are still many potential corruption risks. However, when referring to corruption and bribery with foreign elements, Ms. Vien only replied that she was known through media surveillance “that there are cases of corruption, bribery, and collusion in projects with foreign elements.” She said her organization can hardly tell whether this phenomenon is increasing or decreasing “because there are not enough data.” She also emphasized that according to a study by Towards Transparency conducted in 2018 for 45 largest enterprises operating in Vietnam, including 15 FDI enterprises, at present, Vietnamese law still has no public regulations for providing information on anti-corruption programs for businesses operating in Vietnam.
According to Associate Professor, Dr. Pham Quy Tho, a lecturer at the Institute of Policy and Development under the Ministry of Planning and Investment and an observer of anti-corruption issues in Vietnam, currently, the Provincial Competitiveness Index (PCI) conducted by the Vietnam Chamber of Commerce and Industry (VCCI) with the support of the US Agency for International Development (USAID) is a rare source of information that partly reflects the picture of corruption with foreign factors because this index regularly surveys foreign direct investment (FDI) enterprises about the informal costs they have to pay in production and business activities.
“The PCI, compared to other data sources in Vietnam, is done by a fairly advanced survey method, which has been carried out continuously [since 2005] and is systematic and opens so that it can be referred to the trend, but the absolute number cannot be confirmed,” Dr. Pham Quy Tho said and added that while Vietnam has specialized corruption investigations but keep the results unpublicized, the source of PCI should partly reflect the picture of corruption with foreign elements.”
What does the PCI say?
Announced in May 2020 and surveyed more than 12,000 enterprises including more than 1,500 FDI enterprises, coming from 52 countries and territories, the 2019 PCI Report is currently the latest PCI report.
Despite recording many improvements in the business environment in Vietnam compared to previous years, the report shows that FDI enterprises still have to spend 1.11% of their revenue – not a small amount – on unofficial fees or so-called “lubrication” costs in 2019. Also according to the report, 32.5% of FDI enterprises still have to pay unofficial fees for inspectors and 42.5% of enterprises have to pay unofficial fees when performing import and export procedures. Notably, the research team’s analysis of informal costs in the construction sector found that up to 48% of FDI enterprises applying for a construction permit in 2019 paid an additional average of approximately VND24 million in unofficial fees to get this license. Regarding this situation, the research team stated: “There is a clear risk, these types of corruption can cause businesses to give up their intention to expand production and business.”
Difficult to detect the case or do not want to do?
Experts believe that corruption and bribery with foreign elements are often very sophisticated and tricky. Although some advanced countries in the world such as the US, UK, and France have anti-corruption laws or regulations in foreign countries, the person who pays bribes usually does not give money directly to local officials but through a subsidiary or partner company or through an organization or individual in the host country. Bribes are also sent to the host country officials in many forms, from cash to commissions … to paying for visiting tourism or studying abroad for the official’s children.
Dr. Dinh Van Minh, head of the Government Inspectorate’s Legal Department and also an expert on corruption and bribery, refused to give an interview to RFA on anti-corruption, bribery with foreign elements. However, after the Japanese company Tenma bribed some customs officers in Bac Ninh province VND5 billion to get hundreds of billion tax reduction when answering questions from the domestic press about why the bribery with foreign elements is often detected and processed first by foreign agencies and organizations, Mr. Minh said that bribes with foreign elements are difficult to detect “because both the giver and the receiver are beneficial so any side is willing to denounce the other side.” He said that in inspection, auditing, market management, tax, and customs activities, when detecting a mistake, there is often bargaining, an agreement between the violator and the civil servants who would turn big violations into small violations, thus making corruption more difficult to detect. According to Mr. Minh, the use of cash too much also makes it difficult for corruption because it is difficult to prove whose money is from, and the origin.
“Anti-corruption is really a matter of governance. To reduce corruption, we must follow the best governance practices, in particular, must ensure 4 factors: 1- Respect the law, 2- Have an independent judiciary, 3 – Have an independent press, and 4- Have healthy and active civil society organizations,” said Ph.D. Nguyen Quang A.
Admitting the sophistication of bribery cases involving foreign elements, Mr. Nguyen Quang A, former Director of the IDS Institute for Development Studies (self-dissolved) said that the Government of Vietnam has not really done an active part in this sector because it is a “fertile and safe ground” for corrupt government officials.
“I can confirm that the FDI sector, the non-state sector, is the channel to help them [state officials – PV] become corrupt that people are hard to know, the judiciary is hard to know…. They are safer to receive corrupt bribes through foreign channels than from within the country. They are incentive [motivation –PV] to protect those channels,” Ph.D. Quang A said and said that corruption through foreign partners in Vietnam is very large.
Mr. Quang A also said that despite protecting transparency and integrity, governments and foreign organizations also tend to be cautious and “respectful” when dealing with corruption and bribery cases related to Vietnam because many factors and interests have to be considered. He said:
“When foreign governments or foreign organizations cooperate with Vietnam, I do not talk about sponsorship, in particular, they certainly pay attention to the specific situation of Vietnam and want to continue to maintain relations with Vietnam and also have to consider 5, 7 to 10 other factors and they may not be too bold to talk about corruption. I think this is understandable because they have many of their own interests and anti-corruption is just one of those factors.”
“In a jumble of such benefits and factors, when considered, they cannot be completely objective, so it is very natural for them to be shy, respectful, or unspoken about it, I think is very natural,” Quang A analyzed and added that he expected the foreign government and international organizations to actively uncover corruption and bribery related to Vietnam and do so to the extent that can target any official involved and suspend all their transactions and accounts in foreign countries to make these punishments more effective.