Corruption has long troubled Thailand, halting economic growth and the development of democratic regimes. Attempts at fighting corruption from civil society and governmental procedure have done little to stymie corrupt exchange and have facilitated a culture of corruption across branches of Thai society. With aid from various local and international organisations, the Thai private sector appeared as the unique champion to fight corruption via the Thai Collective Action Against Corruption (Thai CAC) – a movement designed to unite Thai businesses and consolidate a foundation and framework for an actionable anti-corruption narrative.
In this episode of Collectively Combating Kleptocracy, the Thai Institute of Directors Executive Director and Thai CAC representative Pana Ratanabanangkoon joins CIPE’s ACGC Program Manager Izabela Chmielewska to discuss the mobilization, emergence, tipping points and subsequent success of the Thai CAC. Ratanabanangkoon outlines the nature of operation while exploring the specific objectives and unique characteristics of the Thai CAC. He also discusses if the Thai CAC reached its desired outcomes, as envisioned at the start of its journey, providing further discussion on what lessons have been learned and how the Thai CAC’s formulation process can be reflected in alternative contexts to promote further collective action against corruption in the private sector.
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Transcript
Announcer (00:03):
Welcome to the Collectively Combating Kleptocracy podcast series. This podcast is supported through a project on identifying successful collective action approaches against kleptocracy as part of the United States Agency for International Development Funded, Democratic Elections and Political Processes Cooperative Agreement, carried out by the Consortium for Elections and Political Process Strengthening. It is co-implemented by the International Republican Institute and the Center for International Private Enterprise, and accompanied by related case studies. The views expressed in this podcast are that of the speakers and do not necessarily reflect the views of USAID or the United States government.
Izabela Chmielewska (00:38):
My name is Izabela Chmielewska. I’m a Program Manager at the Anti-Corruption Governance Center at CIPE, and I am very pleased to introduce our podcast guest today, Pana Ratana, who is an anti-corruption collective action specialist and founder and executive director of the International Collective Action Network, I Can Fight Corruption, with rich experience in leading one of the largest anti-corruption collective action initiatives in the world called the Thai Private Sector Collective Action Against Corruption, Thai CAC for short, which we’ll be discussing today.
(01:12):
Pana served as the executive vice president at the THAI Institute of Doctors and also was responsible for establishing CAC’s SME certification program and citizen feedback projects. Early in his career, he worked for Shell in various engineering, commercial and management roles in Thailand, Singapore Europe and in the US. Pana, it’s a pleasure to have you. Welcome.
Pana Ratana (01:35):
Hi Izabela. Hi everybody. It’s a pleasure to be here and thank you for CIPE for inviting me here today.
Izabela Chmielewska (01:41):
Of course. I wanted to ask you, what was the context in which the Collective Action Movement took place in Thailand and how were you involved and how was also CIPE involved in this endeavor?
Pana Ratana (01:54):
Yes, certainly. So if you go back to about 2010 or a bit before that, around 2008, everybody might recall that we had a big global crisis, financial crisis, and of course in Thailand there was quite a both political and economic crisis happening around that time, so business leaders got together and decided that certain things in Thailand had to change mainly around transparency and the corruption in the political sector. And that was when the Thai CAC was established. So several key business leaders came together and basically rounded up a group of founding organization, namely the Thai Chamber of Commerce, the Thai Listed Company Association, Thai Banker Association, and the Thai Institute of Director. There were eight founding organization in total, and basically these founders set up the Thai CAC to basically serve as a collective action for the private sector to fight corruption. And about the same time, CIPE stepped in as a financial supporter or sponsor for the Thai CAC. And basically that’s how we got started.
Izabela Chmielewska (03:34):
Thank you for sharing this insightful information about the beginning of it all. Please tell me as far as role in particular, is there anything else that was a standout moment for you where you were able to position this movement into the success?
Pana Ratana (03:59):
So throughout 2017, I did get to know the Thai IOD and the current CEO Mr. Kulvech Janvatanavit. And basically, I at the time was leaving the corporate world to look at opportunities in the NGO sector. So I was away from Thailand for about two decades, and I felt that every time I came back to Thailand or ASEAN in general, problems such as environmental or social is widespread and it’s always the same problem over and over again. And I thought that, well, I’ve done quite a bit in the corporate sector, let’s see what I can do to help change the problem in this country. And I would say coincidentally, I met with Kulvech and get to know the Thai IOD and he invited me to help work part-time at the Thai CAC. That was in 2017. So in 2017, the Thai CAC was pretty active.
(05:09):
We had about 300 members at the time, but we were looking to expand. So 300 company is a success. However, we would like to expand that to small medium-sized business. We would like to expand our membership to non-listed companies in Thailand. So that’s what was my challenge after joining in 2017. So after I joined, we created a certification program for the SME and still I think I believe to this day, we are the only collective action against corruption that has a dual certification program for both large companies, medium-sized, and small enterprises. We also try to push the government for change. The first mission of the collective action of course is to grow the collective action, so to recruit as many members as possible. The second objective is to push for change in the government sector. That’s really what our members look for and wants us to help on. Basically, the next time they go request a permit or bid on a government contract, they don’t want to have to pay bribes and be asked to pay bribe.
(06:39):
And our third mission is really to, as a vehicle for the collective action to function, there has to be some sort of a structure or framework that all the members can abide to. And that’s what I would refer to as our certification program. Essentially all the members that joined us, they would have to prove that internally they have done everything they can to put in place a good compliance program to avoid or mitigate corruption. And to date, we have about 515 certified companies, both large and small and medium. And within the waiting line, I would say we have 374 signatory companies. Basically, signatory companies are companies that have signed pledges to become certified at a later date with the Thai CAC, so quite a healthy pipeline of close to 1000 companies in various stages of the collective action.
Izabela Chmielewska (07:48):
You exceeded my next question, which was what actors were instrumental in making the movement possible? You described that this is very much driven by the private sector, but I was wondering also if there was a role for civil society to play, and it sounds like any collective action requires the collaboration of many activists, but if there was a singular champion that really led the coalition building or push for reform that you’d like to mention in this context, that would be very helpful as well.
Pana Ratana (08:24):
Throughout our journey, I think there’s several key group of catalysts. I’m not sure what the term would be, but supporter catalysts champions for the Thai CAC.
(08:39):
The first group is of course our first council members. And basically when the Thai CAC was formed, we imitated a corporate model where we have board members, but in our case we would call board members as council members. So the Thai CAC Council represented influential, ethical and very senior business leaders and public organization leaders that would like to see less corruption and more transparency in the Thai society. And about 12 of these council members were the first ones to try to not only encourage more members to join, but help us connect with other stakeholders like the stock exchange, the Thai Banking Association, and the seven other founders to come together and formalize the CAC.
(09:43):
And then further on, of course, I mentioned that CIPE had a very key role in helping CAC, even though we were part of the Thai IOD, the activities that we were conducting such as the review of all the documents that the companies provided for certification or to put together events to recognize the companies that have been certified all requires funding support. And I think CIPE was a very instrumental part of the success early on in terms of enabling the Thai CAC to continue forward.
Izabela Chmielewska (10:26):
And that really covers some of the civil society role that was in effect played by CIPE too. I’m just wondering if it also gave the ability for a Thailand-based civil society organizations to also be involved in this endeavor.
Pana Ratana (10:43):
Yeah, we have a twin, I would say a twin civil society organization called the Anti-Corruption Thailand. Essentially the founder of Thai CAC was also closely linked with the ACT or Anti-Corruption Thailand. And we somehow split the responsibility, whereas Thai CAC looks after the Thai private sector, IE companies and the ACT looks after the civil society, basically the government and the citizen movement efforts.
Izabela Chmielewska (11:24):
Okay. That’s really complementary. And then of course CIPE’s role as an international NGO is a very important one as well, and we’ve been very happy to support all of these endeavors. And obviously, this was way before my time, but I know that this is a very exemplary piece of collective action that we often refer to, especially when it comes to very difficult and entrenched ways of fighting corruption in particular kleptocracy. So I wanted to ask you, what was the tipping point for collective action? You mentioned that from your personal experience, it was a little bit frustrating to come back and see the level of bribery and how it affected the private sector’s day-to-day function. But I wonder if not a singular tipping point, but what would you describe as this push for change where organizations across sectors?
Pana Ratana (12:51):
Well, surely there were multiple tipping points at a point where we got dizzy. But really I would say that the tipping point would be initially to be able to get a group of business leader to come together and be vocal about what they want to see, to be supportive of the Thai CAC, and to get the seven other associations to come on board as a founding member. That was the first tipping point. As you mentioned in the introduction, I’m also helping other countries set up collective action, and this first step is not that easy as it seems. Initially, many people and many organization are very skeptical of any collective action effort. So I would say our first tipping point was to get all the relevant founder and members on board and got the wheel rolling. The second tipping point I mentioned is having financial support.
(14:09):
And we not only rely on CIPE, but we try to seek funding from the capital market here in Thailand, the Thai IOT also play a big role in terms of resources and finance for the Thai CAC, and this is probably the second challenge that any collective action would face, is to be able to generate financial income to get the activities going in year two or year three. And I would say that the next tipping point would be for the Thai CAC specifically, is to get the stock exchange of Thailand or SET to be our key champion. Essentially what they did was the Thai stock exchange required companies within the Thai stock market to disclose whether or not they’re part of the CAC membership. And you may think that, well, why is that important? It’s very important because when you look to buy a stock in the stock market here, you can very clearly see whether the companies are certified for anti-corruption or they’re not certified. And if you’re really an investor and you look at a company to invest and they’re not certified in anti-corruption, that’s a big red flag.
(15:36):
And to have this disclosure requirement from the stock exchange of Thailand was another tipping point to start bringing in more companies in the listed stock exchange. And then the next tipping point was we were able to essentially got all the banking sector, the insurance sector and the financial sectors to be the first core members. So 90 or 80% of all the banks, the financial services companies, and the insurance company came on board within the first five years, and that was the next tipping point. So once you have this sort of critical mass from these three sectors, other companies from other sectors starting to pay more attention to the Thai CAC and they start signing up, and over time that 25 or 27 companies initially became 515 today.
Izabela Chmielewska (16:56):
Thank you, Pana. The level of multiple tipping points makes total sense when it comes to dismantling something as complex as corruption. So thank you for sharing all of that. I was wondering if the movement was mobilized in different ways in particular through technology or protests or a voting initiative. Could you please expand a little bit on that point?
Pana Ratana (17:21):
Certainly, as I mentioned before, our mission at the Thai CAC is threefold, and the last is to basically push for governmental change. Basically what we’re trying to do is that as a private sector with hundreds of members, we, I would say sit on top of valuable information, which is in the companies our members interact with the what kind of corruption risk do they see. And that comes through the certification program, whereas all the companies that are certified have to disclose what corruption risk they face as a company. And when you have the risk profile of all the companies or within each of the sector, you can use this understanding or use this risk profile to go back to the government and make suggestions to either change service, improve service. You can look at ways on how to avoid corruption by using online services, online payment, or you can pinpoint issues with whistleblowing and complaint channels and things like that.
(18:42):
So basically our movement is not through protests, but through positive engagement or constructive engagement with the government agencies. Certainly not all the government agencies are receptive. You can imagine that some are harder to change than the others, but what we try to do is to work with the government leaders that are receptive and that wants to share our mission as well. And I can name several government agencies like the Ministry of Commerce, the Bangkok Metropolitan administration, the Bank of Thailand. These are basically close partner in trying to push for change in their area. But going back to your question, basically how these Thai CAC was mobilized is through I would say recognition.
(19:43):
So imagine if you have business leaders that are somewhat engaged in bribery, like it or not, they may be forced to. And I say that because let’s say you are in a high corruption environment and you need to bid on a project or projects for your survival as a company or you’re in real estate, whereas you spent a lot of money buying land and you need to get 15 or 20 of these permits to do construction, you don’t really have a lot of choices when it comes to being asked for bribe.
(20:28):
What we try to do is to bring this problem out and provide a platform to show that, well, if you are able to put in a good compliant system that proves that you’ve done your best to try to mitigate bribery and corruption, you put in the right policies, you looked at all the risks that might happen, and you put in mitigation, you train your staff, you put in effective whistleblowing channels, everything that you can do as a company to avoid being engaged in corruption and bribery, then we would certainly want to recognize and have a platform where you can join together with like-minded business leaders.
(21:17):
And that’s what CAC is about, is through our certification program, if a company can go through and become certified, it shows that they have a good internal compliance system, whereas they’re somewhat proactive and immune to corruption than the other companies that have not joined. And twice a year, the Thai CAC gives out the certification plaque. And every time we visited companies to talk about their challenges and things like that, when we walk in their front entrance, the first thing we normally see is this certification plaque that were given out to them at the time they were certified. So I think this works. And of course, if they get recognized and the Thai CAC can help solve their corruption problem, that’s even better.
Izabela Chmielewska (22:19):
Absolutely. And it really is exemplary of how this can work in practice without tension if there are champions within government that see this as an issue, and there is a business case for reducing the level of doing business as overcoming social norms when it comes to bribery and other corrupt practices that everyone really wants things to work better and more efficiently. And it’s really, really good to hear this. This is a question just to kind of pivot on the incentives of the private sector participation. Those are obvious as you’ve described throughout our conversation. So I think this is a very different approach to other anti-kleptocracy movements that we’ve been discussing as part of the series where that incentivization of participation of private sector isn’t coming from the protest side or the civil society side. It’s quite the opposite. It’s really driven by the private sector. So just to get a sense of the incentives behind it, were there any business owners or any major private sector actors that maybe joined later or needed additional incentives in order to join the CAC?
Pana Ratana (23:46):
Yes. So companies that join the Thai CAC actually have to pay money, so they have to pay money to become certified. So the question is what brings them here? I mean, what brings them to join the Thai CAC? I think, first of all, nobody likes corruption. Whether, I think even businessmen or business owners that have to pay bribe or that pays bribe, doesn’t want to pay bribe. They don’t have to. So the incentive is certainly to become less susceptible to corruption and bribery as ways to not only do business transparently, but be operating with lower expense without having to pay bribe. The second incentive is, of course, almost every country these days have corruption legislation where corporations are penalized. A good example, of course is the USFCPA and UK Bribery Act. Actually in Thailand there is a similar law. So the second incentive would be that if you have a good and standardized compliance system in place to prevent corruption and bribery, chances are that you have a low risk of being prosecuted with the anti-corruption law.
(25:17):
And the third incentive would be back to the answer to your early question, which is to be recognized. Companies these days, they try very hard to differentiate themselves. Back in the old days, if you have a good product and your price was competitive, that’s where you might be successful. But nowadays, if you do cross-border transaction, especially with European and Western countries, you have to do a lot more as you know. You have to talk about ESG, you have to talk about human rights, fair labor practices, and of course, being in ASEAN with pretty low corruption perception index score, that leaves another question is, what are you doing with anti-corruption compliance? And this is where we fill in that gap, is to allow the companies to develop the compliance program with us in a standardized way such that not only themselves benefit internally, but it offers them more opportunities to conduct business outside Thailand.
Izabela Chmielewska (26:34):
Thank you. I wanted to follow up on one area there. When it comes to all of this wonderful collective action, it seems that it was quite smooth. And it took some time to get off the ground, but once it was off the ground, the momentum kept building and building. So I was wondering, were there any efforts to repress this movement at all?
Pana Ratana (27:02):
So far, there hasn’t been any effort to repress the movement, but I would say that there has been good headways on a number of things that we tried to do, but realistically, you cannot change the government agencies overnight. So when we try to push for change in certain government agency that is quite corrupted, things move very slowly or they don’t move at all. And that’s probably the biggest challenge when it comes to our membership is that let’s say government agency X is highly corrupted, our members really want to see changes, but we are doing the best we can to offer solutions, but the progress is slow. To answer your question, there hasn’t been any effort to repress, but certain progress is slow, much slower than what we’d like to see in some agencies.
Izabela Chmielewska (28:19):
So it’s not active repression, it’s just that the process takes so long because of embedded interests and other reasons. But overall, it sounds like a very successful collective action initiative, and it’s been going on for over a decade. So I have two more questions for you. Looking back, do you think that the movement achieved its desired outcomes as it was envisioned in the beginning of the CAC Thai?
Pana Ratana (28:48):
So I’ll revisit our three missions again. One is to grow the collective action. Two is to set a compliance standard where we are pretty close to international compliance system for anti-corruption. And number three is to push for change in the government sector. In the first mission, looking by the numbers or judging by the numbers, I think that we have come quite a long ways, 515 certified members, 374 signatory companies members, and the majority or about 50 to 60% of these companies are in the Thai stock exchange. So I think within this metrics I would say is quite significant, but we have a long way to go. I think there are companies out there that are not in the stock exchange of Thailand that could potentially benefit, and of course there’s hundreds of thousands and SMEs that could potentially benefit as well. So in mission number one, we’ve made good progress. There’s quite a bit of ways to go.
(30:09):
In the second mission, which is to uplift the compliance to international standards, I must go back and say early on we started with a simple checklist and we gave it to our members. And if they say that yes, we have policies, we’ve done risk assessment, we have a whistleblowing channel that we implement internally, then we say, that’s fine, you’re good. But then we also start looking at what they put together. And over time, we try to develop a more stringent and stricter standards based on international standards like the Transparency International, the OECD standards. And to this day, our checklist, I would say, is very close, maybe 80 to 90% of what’s on the TI checklist. So in terms of the second mission to uplift the compliance, we came a long way as well. Not to mention that initially, we were certifying companies.
(31:16):
We have 17 checklists in general for large companies, and 17 checklists for SMEs, all the paperwork was done by hand. And you can imagine that every quarter, we have a huge stack of paper to look through. As the project director, we shifted over to online certification. So to this day, not a single piece of paper is sent to us. We’ve certified every company’s online. And so in the second mission, we’ve made good progress as well. In the third mission is where I think we have quite a ways to go, which is to push for government change. We’ve been able to get a pretty good seeding within the national Anti-Corruption agencies. There are two or three of them. They view the Thai CAC as a strong partner. And we have been instrumental in helping shape the policies, the framework around whistleblowing as well as the private sector engagement that they’re doing. But with the other government agency, especially the ones that are hard to make progress, we need to continue to try to make good efforts and create change in those agencies.
Izabela Chmielewska (32:51):
Absolutely, and I think the involvement of the Thai CAC in the design and also the implementation and redesign of policy so that they’re actually practically applicable and usable is an extremely important part of the ongoing efforts. My very last question is about lessons learned. What might be relevant in other country contexts from this experience in Thailand, and what do you think activists and other anti-corruption champions can learn from the experience of developing and growing the Thai CAC?
Pana Ratana (33:29):
Sure. I can suggest maybe two or three. First of all, I think you need to start with a strong partner or champion, especially the ones that can help bring in membership. And I think that for each of the countries, they may not be the same. Some of them may even be anti-corruption agencies that you partner with. Some of the champions could be business associations or even certain business leaders, individuals that are willing to be a voice for you. I think that would be the first one. The second one is to develop a framework that basically allows the companies to develop their internal system so that they’re more immune to bribery and corruption. And the framework needs to be developed according to how ready the business sector is willing to adopt. For example, if you’re just starting out with a CAC, you certainly don’t want to implement ISO 37,001 right away. That would be a big leap for companies to even try to follow or be certified. And a third would be that look for other collective action that can help you learn from their mistakes.
(35:15):
It took us 13 years, 14 now to where we have 515 certified companies. We’ve made certainly plenty of mistakes during the time I was project directors, and they’re all good mistakes, I would say. So we had to try to find new ways. Over the time that I was there, there was the social media, there was YouTube, and there were certain group of members that requires special type of communication to get to the key leaders and the owners to be more passionate about what we do. So we had to try many things, and some of them worked, some of them didn’t. But for other countries that are trying to set up a CAC, to be able to learn from the mistakes or the best practice of other CAC I think is very valuable. Remember that you have limited resources, both people and time and money to get your CAC going, and that’s when this really third-best practice chair, your learning can make you grow faster.
Izabela Chmielewska (36:36):
Thank you. I think that’s incredibly insightful, and the Thai CAC has been such a luminary example of how this can work in practice, and having the span of 14 or so years can really shine light on the trajectory of what that might look like in the long term or medium term. So it’s been incredible to have you on the podcast. Thank you so much for sharing your firsthand insights about collective action and fighting kleptocracy in Thailand, and we are very lucky to have learned along the way from everything that you shared today. Thank you, Pana.
Pana Ratana (37:18):
Thanks for having me.
Announcer (37:20):
Thank you for listening to this podcast. For more episodes from the Collectively Combating Kleptocracy series and the full report with case studies, please visit Acgc.cipe.org. That’s Acgc.C-I-P-E.org.
Published Date: September 19, 2024