With Cambodia repeatedly being perceived as the most corrupt nation in Asean by Transparency International, the organisation held a workshop yesterday urging businesses to adopt more transparent operations to avoid legal battles and negative press that could hamper profits, especially as the Kingdom becomes greater connected to global supply chains.

Reach Ra, undersecretary of state for the Ministry of Commerce, said ensuring transparency was a matter of economic necessity as businesses sourcing from the Kingdom face greater international scrutiny.

“Transparency will attract responsible businesses to Cambodia,” he said. “Businesses who want to make long-term profits must make this a priority, because customers are helping the economy grow, and customers need transparency.”

He added that while the government has taken steps towards strengthening the economy by paving the way for companies to enter the Kingdom, more regulations are needed to enforce transparency.

“We have reduced bureaucracy and saved time for business people,” he said. “In order for businesses to be transparent, the ministry has to establish laws to pave the way to doing business fairly and judiciously.”

Melissa Chang, programme manager at the Asean CSR Network, an organisation focused on corporate social responsibility in Southeast Asia, said business transparency and responsibility were effective means of avoiding both legal and social repercussions.

“Showing due diligence allows you to defend yourself against reputational risks, and you can use it as a defense in legal court,” she said. “There is a court of opinion here as well, and investors will judge you. Big companies with violations [of transparency and responsibility] suffer big damages to their reputations.”

Businesses should take steps to avoid negative impacts by constantly reviewing their operations, providing remediation when necessary and reporting their processes to the government, she said.

“If a company is violating the laws of the country, it is the government’s responsibility to act,” she said. “But there are other drivers, too, coming from customers, investors and nongovernmental organisations who apply pressure to companies [to be internationally compliant].”

Jack van Dokkum, human resources manager for garment exporting firm Pactics, agreed that while external pressures could encourage businesses to implement transparent practices, some are already trying to conform to international norms despite a lack of government regulations.

“Development in Cambodia is increasing, and conforming to codes of conduct is becoming a matter of what business managers want to do, not what they need to do.”

He added that for new businesses, it was crucial to establish foundations of transparency and responsibility from the very start.

“There are a lot of young entrepreneurs in Cambodia who want to run their own businesses and do something good for Cambodia,” he said. “Luckily, those two things should go hand in hand.”