Thai society should pressure the government to put some control on middlemen and sales agents to fight corruption in state procurement contracts, says an expert on transparency.
Michael Hershman, a co-founder of the Berlin-based Transparency International, said if the procurement system is subverted through corruption, billions of dollars will be added to the cost of doing business.
On average, 14-20% of a country's gross domestic product is devoted to essential public services.
With the 2-trillion-baht borrowing bill to support the government's infrastructure projects cleared in its first reading in the Senate last week, the private sector is keen to set up an integrity pact for third-party involvement enabling transparency in bidding processes.
The Anti-Corruption Organisation of Thailand hopes the pact will be approved by the cabinet later this year.
Mr Hershman also warned governments to establish the integrity pact early enough in the planning stages to bring in international experts that understand these complicated projects and fair market values.
Procurement reform plays a critical role in promoting integrity, not only because it affects every group within society but also the opportunities for corruption are multiplied when it comes to large multimillion-dollar infrastructure procurement, said Mr Hershman, who is also director of the Washington-based Center for International Private Enterprise.
He proposed the licensing of all middlemen related to the procurement, which requires them to disclose relationships with ministries as well as the terms and conditions of their contracts.
"We regulate everything else you can think of. But when it comes to the people most responsible to help facilitate bribes, they are totally unchecked and unsupervised," he told last week's anti-corruption conference.
"I call upon the Thai government, NGO community and those of you who are in business to pressure the government to put some sort of controls on these middlemen.
"A government using a middleman is a government I wouldn't trust, because there's no reason not to allow companies to bid directly on government purchases. Some governments require foreign companies to partner with local middlemen or agents to do business. This is just another means of extorting rent from companies."
Ali Adam, the East Asia development director of Halcrow Group, a London-based engineering consultancy, said the private sector is looking for predictability, accountability and a lack of collusion in operations and maintenance.
"It's a bit like where the construction industry was 20 or 30 years ago in terms of safety. I think we need to get to that stage where you see CEOs in jail. Zero tolerance towards bribery has to be part of the DNA," he said.
Mr Hershman stressed the private sector needs to push the government in the right direction, as governments have lagged in terms of transparency and accountability with the private sector taking the lead.
Thailand ranks 88th among 176 countries according to Transparency International in terms of graft, receiving 33 points out of 100 in the 2012 Corruption Perceptions Index.
Loi Kheng Min, the secretary-general of Transparency International Malaysia, said those in his country who make the integrity pledge will be tracked by the Malaysian Anti-Corruption Commission, while a list of signatories is maintained by the Institute of Integrity and can be accessed online.
But there is no assurance the promises made by these companies will be followed through on, and actual implementation still needs monitoring, he said.
Panthep Klanarongran, the chairman of Thailand's National Anti-Corruption Commission (NACC), said corruption laws have not been widely implemented in this country, and a warning will be issued first if there are complaints by the public.
Analysts say the Thai government plans to cut the NACC's budget for fiscal 2014, which would worsen the image of a country already well known for its corruption problems.
Mr Hershman said: "You cannot attract foreign investment at the same time you are cutting your anti-corruption programmes. I can assure you firms will not come here to invest with this perception."
About the author
- Writer: Nanchanok Wongsamuth
Position: News Reporter