Fighting Asia Causes, Effects and Remedies Editors John Kidd Frank-Jiirgen Richter Fighting in Asia Causes, Effects and Remedies Fighting CORRUPTION in Asia Causes, Effects and Remedies Editors John Kidd Aston University, UK Frank-Jurgen Richter World Economic Forum, Switzerland Vfe World Scientific I New Jersey • London • Si New Jersey • London • Singapore • Hong Kong Published by World Scientific Publishing Co. Pte. Ltd. 5 Toh Tuck Link, Singapore 596224 USA office: Suite 202, 1060 Main Street, River Edge, NJ 07661 UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. FIGHTING CORRUPTION IN ASIA Causes, Effects and Remedies Copyright © 2003 by World Scientific Publishing Co. Pte. Ltd. All rights reserved. This book, or parts thereof, may not be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage and retrieval system now known or to be invented, without written permission from the Publisher. For photocopying of material in this volume, please pay a copying fee through the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA. In this case permission to photocopy is not required from the publisher. ISBN 981-238-242-9 Printed by Fulsland Offset Printing (S) Pte Ltd, Singapore This page is intentionally left blank V Contents Chapter 1 Introduction: Corruption and Its Measures 1 John B Kidd and Frank-Jurgen Richter Chapter 2 The OECD Convention and Asia 27 Enery Quinones Chapter 3 The Asian Money Laundering Explosion 47 Peter Lilley Chapter 4 Corruption in Context 73 Leslie Palmier Chapter 5 Is the 21st Century 'The Age of Asia-Pacific Region'? Hopes and Expectations as Viewed from East Russia 91 Anatoly Korchagin and Alex Ivanov Chapter 6 Monopoly Rights and Wrongs: Two Forms of Intellectual Property Rights Violations in Asia 115 Hock-Beng Cheah Chapter 7 Corruption in Mainland China Today: Data and Law in a Dubious Battle 175 Francois-Yves Damon Chapter 8 Culture and Level of Industrialization as Determinants of Corruption in Asia 203 Domenic Sculli vi Fighting Corruption in Asia Chapter 9 The Economy of Seepage and Leakage in Asia: The Most Dangerous Issue 221 Gilbert Etienne Chapter 10 Combating Corruption in Southeast Asia 237 Clay Wescott Chapter 11 The Institutional Economics of Legal Institutions, Guanxi, and Corruption in the PR China 271 Matthias Schramm and Markus Taube Chapter 12 The Nature of Corruption Hidden Culture: The Case of Korea 297 Yong-Lin Moon and Gary N McLean Chapter 13 Combating Corruption in Thailand: A Call to an End of the "White Buffet" 317 Maneewan Chat-uthai and Gary N McLean Chapter 14 Comparitive Study of Anti-Corruption Systems, Efforts and Strategies in Asian Countries: Focusing on Hong Kong, Singapore, Malaysia, and Korea 349 Taek Kim Chapter 15 An Exploration of the Dynamics of the 'Corrupter' and the 'Corrupted': Developing Cutting Edge Practices to Prevent Seduction 377 Lionel Stapley VII List of Contributors Maneewan Chat-uthai is an assistant professor in the graduate program in human resource development of the National Institute of Development Administration (NIDA), a public graduate univer- sity in Thailand. Maneewan received her B.A. from Thailand's Thammasat University and her M.A. from Northeast Missouri State University. She received a Japanese Government Scholarship to com- plete her Ph.D. at the University of Missouri-Columbia. Her work experience includes being chief researcher at the Busi- ness Information and Research Company, planning and policy ana- lyst of King Mongkut's Institute of Technology, administrative secretary to the deputy permanent secretary for University affairs, and deputy and director of the NIDA-HRD Graduate Program. Maneewan is a frequent lecturer and guest speaker for staff devel- opment in public and private organizations. She has worked as a consultant for the United Nations Development Program and is currently seconded to join the UN International Labour Organi- zation's International Program on the elimination of child labour, as the National Program Manager for Thailand. Hock-Beng Cheah researches and teaches at the School of Econom- ics and Management, University College, University of New South Wales. In economics, his research interests are focused on economic development and political economy in the Asia-Pacific region. In the management field, his teaching and research interests include human resource management, organizational development, and entrepreneurship. He was a visiting Research Fellow at the Snider Entrepreneurial Center, University of Pennsylvania, where he pro- posed a new perspective of the entrepreneurial process. Since then, VIM Fighting Corruption in Asia he has explored more extensively the ramifications of this perspec- tive of entrepreneurship for organizations, management and eco- nomic development. He has also undertaken research at the Economics Research Cen- ter at Nagoya University, Japan, and the Institute of Southeast Asian Studies, Singapore. His work has been published in a variety of monographs and journals including: Creativity and Innovation Man- agement, Journal of Business Venturing, Journal of Enterprising Culture, Manchester Papers on Development, and Labour & Industry. Francois-Yves Damon studied history at the Sorbonne, and Chinese in the Ecole des Langues Orientales, Paris, and Peking. Now is Maitre de conferences habilite a diriger des recherches, Universite Charles de Gaulle in Lille. He is also Chercheur Associe at the Centre de recherches sociologiques sur le droit et les institutions penales, Ministere de la justice, Guyancourt. His thesis concerned the textile industry and trade in China, and since then he has researched the economy, employment, and Law in China (e.g. Translation of the Law on the deployment of the People's Army in Hong Kong after the first of July 1997). He is also a member of the Association francaise de criminologie. He has published widely, for instance on criminality from various justice, police and Chinese reviews, in Perspectives Chinoises, a review of the French Center on Contemporary China, Hong Kong; on illegal immigration, analysis of sociological and psychological condi- tions of six murders by a lone murderer in Fujian. And forthcoming is The Traffic of Women in Guangdong (women sold for domestic slavery, and pregnancy, then re-sold); plus Transition and Corruption, (the three strata of corruption in China) ESSCA, Angers-France, 2001. His other work concerns 'the cultural revolution', and the statis- tical relationships between the Great Leap Forward and the constitu- tion of the establishment of the provincial revolutionary committees. Gilbert Etienne is a professor emeritus of development economics at the Graduate Institutes of International Studies & Development List of Contributors IX Studies, Geneva. He has spent many years in Asia since 1952, first as a student at the School of Oriental Civilisations & Languages, Paris; then in business; and since 1959 for research or consultancy with the Swiss government. He has published a number of books on development in South Asia, Afghanistan and China, the latest being: Rural Change in South Asia — India, Pakistan, Bangladesh. New Delhi, Vikas. Also Feeding Asia in the next Century. Macmillan, New Delhi; and Chine, Inde, le match du siecle. Presses de Sciences Po, Paris. This latter book has been updated and translated into Chinese and published by Xinhua Press, Peking, 2000. He has been visiting professor at M.I.T., The Economic Develop- ment Institute of the World Bank, has often lectured in France, Pakistan, India and China. Alexander M Ivanov gained his Doctor of Laws after his activity as a state prosecutor being a lawyer for ten years. Now, he is a senior lecturer on comparative law and criminology at law school of FESU, and as a fellow of Vladivostok centre for the study of organised crime and corruption. This centre was established by, and works upon the initiative of Professor Louise Shelly (American University, Washington). He has about 50 papers, book chapters and books on organised crime, economic crimes, corruption and comparative, criminal, constitutional and church law. John Kidd was educated in the UK and worked for several major UK organizations before returning to University scholarship. In the Uni- versities of Birmingham and now Aston Business School, his research focused on the development of IT use in SMEs; the management of projects; and the softer management issues that concern multina- tional joint ventures. He has held visiting professorships in several European universities, and in the China Europe International Busi- ness School, Shanghai. His recent books on Asian matters, co-edited with Li Xue and Frank-Jurgen Richter, are Maximising Human Intelligence Deployment in Asia: The 6 th Generation Project and also Advances in Human Resource Management in Asia. London & New York, Palgrave (both 2001). [...]... which was to be balanced against the friendly eating a n d 2 John B Kidd & Frank-Jurgen Richter drinking after the game when all on-field animosity was forgotten It was playing the game that counted, not the result At some point in my 'growing up', I met the beginnings of corruption in these simple games The better amateur players were being offered 'boot money' That was understandable to me and to many... 8 John B Kidd & Frank-Jurgen Richter In 1994, the OECD Council adopted the 'Recommendation on Bribery of Foreign Public Officials in International Business Transactions', which calls on Member countries to act to combat illicit payments in international trade and investment As part of that Recommendation, reference was made to the need "to take concrete and meaningful steps including examining tax legislation,... employed to gain an appreciation of its magnitude before making an alliance contract in a target country 18 John B Kidd & Frank-Jurgen Richter Part 2: Combating Corruption, Money Laundering and Crime In Chapter 2, Enery Q u i n o n n e s writes u p o n the development of the OECD studies o n corruption that led to the convention against c o r r u p t i o n H e r e i n she begins by informing us of the... c o n c e r n e d with Asian studies since 1951, w h e n h e u n d e r t o o k field research in Indonesia His publications include State and Law in Eastern Asia (ed.) (Aldershot, D a r t m o u t h 1995; Detente in Asia (ed.) L o n d o n , Macmillan 1992; The Control of Bureaucratic Corruption: Case Studies in Asia New Delhi, Allied, 1985 Enery Quinones is h e a d of the anti -corruption division of... potential for corruption and strife arising between the 'haves and have nots' in mediaeval times (extracts from http://www.tylwythteg.com/templar.html — accessed July 3 rd , 2001) Readers might like to note a 'sister' book to this is focused o n 'Governance in Asia' (Kidd & Richter, 2002) In that book, we address issues arising from co-joining different models of corporate a n d national cultures in asian... demand for [and use of] performance-enhancing drugs since the honor of individual countries depends on winning 'gold' But change is afoot: Sir Paul Condon, one time head of Scotland Yard (the UK's police headquarters), is developing a dossier upon global corruption in the game of cricket In his preliminary report, he says that corruption has been rife in cricket since the 1970's (Condon, 2001) Soccer...X Fighting Corruption in Asia Taek Kim is currently working as a special advisor to the Korea I n d e p e n d e n t Commission Against Corruption (KICAC) in Korea Kim was a visiting scholar at the Transnational Crime a n d Corruption Center at the American University, Washington, D.C., USA t h r o u g h 200 1-2 002, t h o u g h h e r e m a i n e d attached to the SIT Institute of Seoul... cross-cultural aspects of m a n a g e m e n t Matthias Schramm h e studied economics a n d Mandarin in Duisburg a n d W u h a n (PR China) As of April 2001 h e is an assistant at the faculty of economics, Institute for East Asian Studies a n d Chair for XIV Fishting Corruption in Asia East Asian Economics (China) at the University of Duisburg: further h e is a Ph.D student at the Institute for Marketing... consultant official in the presidential commission o n anti -corruption u n d e r the Korean President Kim Dae J u n g (20002001) H e is a distinguished corruption scholar a n d N G O researcher in Korea, a n d h e is well known for his research on bureaucratic corruption, writing a n d presenting many papers at world-class conferences Recently, he has b e c o m e m o r e interested in global anti -corruption, ... about Asian business, international m a n a g e m e n t a n d global competition His most recent books include The East Asian Development Model (MacMillan, 2000) Domenic Sculli lives in H o n g Kong with his wife Oi-yin a n d daughter Pauline H e has b e e n employed by the University of H o n g Kong since 1974, a n d is now a senior lecturer in the d e p a r t m e n t of industrial a n d manufacturing . Fighting Asia Causes, Effects and Remedies Editors John Kidd Frank-Jiirgen Richter Fighting in Asia Causes, Effects and Remedies Fighting CORRUPTION in Asia Causes,. might like to note a 'sister' book to this is focused on 'Governance in Asia& apos; (Kidd & Richter, 2002). In that book, we address issues arising from co-joining different models. Culture and Level of Industrialization as Determinants of Corruption in Asia 203 Domenic Sculli vi Fighting Corruption in Asia Chapter 9 The Economy of Seepage and Leakage in Asia: The Most Dangerous