Business implications of Singapore's toughened anti-corruption regime

Although Singapore stands out as a leading financial centre and strong enforcer of anti-corruption laws in a region plagued by graft, its reputation has been tarnished by a number of prominent bribery cases involving senior government officials and Singapore-based companies.

These have affected Singapore's standing internationally, as reflected by its slide from 5th to 7th place on the Transparency International (TI) Index, published in December 2014, that ranks 174 countries based on perceptions of corruption.

Singapore has responded quickly to its slippage in international standing by introducing plans to implement changes to the anti-corruption regime. These impending changes include, primarily, a review of the Prevention of Corruption Act (PCA), an augmentation by 20% of the workforce at the Corrupt Practices Investigations Bureau (CPIB), and the creation of a centre for reporting corruption.

These changes were announced in January 2015 by Singapore Prime Minister Lee Hsien Loong, who stated that the primary reasons for implementing the changes to Singapore's anti-corruption regime were to ensure public trust in public officials and to maintain Singapore's strong reputation for its zero-tolerance policy for corruption. "Once the civil service [goes] corrupt," Prime Minister Lee stated, "it is a cancer. You cannot root it out again."

Singapore's proactive response and overriding concern with its reputation comes amidst several corruption-related upheavals in the region. To name a few, Indonesia is being rocked by a highly-politicised stand-off between the Komisi Pemberantasan Korupsi (KPK), the Indonesian anti-corruption commission, and the National Police, which has involved the arrest of several members of the KPK.

Corruption concerns were also central in the military coup in Thailand and subsequent ousting of former Thai Prime Minister Yingluck Shinawatra.

The sustained efforts of the Chinese authorities to investigate both foreign and domestic companies' activities, and to track and prosecute officials who have absconded abroad through "Operation Foxhunt," represents a ground shift in China's tolerance for corruption and has caused businesses operating in the region to make considerable changes to their expectations and practices.

The announced changes signal an increased attention to the activities of businesses within Singapore's jurisdiction. Both foreign and domestic companies engaging in businesses within Singapore, as well as domestic companies engaging in business abroad, will be affected by these changes.

Businesses will not only have to keep abreast of the amendments to the PCA and any initiatives implemented by the CPIB, but proactively ensure that they have strong policies and procedures in place to mitigate the risks of corruption.