James Owen, the director of corporate investigations at Control Risks in India and south Asia, talks about corruption in the business environment in India.
What needs to be done to bring corruption in India under control?
The other thing in addition to political will is actually the work that businesses themselves can do. Businesses can be a good positive force for change in any society – particularly a society where corruption is a big problem. By instituting the right kind of risk management processes, by actually putting a programme around the way you deal with this issues, by having the right tone from the top. We often find situations where a fraud or a corrupt act is known to people in the organisation beyond those directly involved but they don’t say anything about it. You’re much more likely to encourage your staff to do the right thing and act in an ethical way if they have received the right kind of training and you have a code of conduct that from the top down is communicated in a very clear way.
What else can be done?
A sense of holding government more to account, whether it’s through technology, through the right to information act, through India’s largely free press. In tangible terms, the implementation of the companies act, which defines fraud for the first time, and the amendment to the prevention of corruption act, which is still on the agenda, but the new government is looking to bring into law as soon as it can.
To what extent are foreign companies deterred from investing in Indian because of these practices?
I think India hasn’t helped itself in the last few years, but I think already we have seen quite an uptick on the investment support side of our business with clients interested – perhaps where they weren’t six to twelve months ago – in making a move into India and I think that’s a good thing and that’s as a result of the election. I think they’re put off more broadly by the difficulties of the operating environment as a whole, and fraud and corruption certainly play a big part in that.
I think the positive thing is that we now have a government in power that is looking to improve India’s credentials in the global investment community because India needs investment and I think we’re already starting to see some positive effects as part of that.
business@thenational.ae
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