Rising environmental awareness and activism are among the biggest issues facing EMI corporations. Baker McKenzie’s Bee Chun Boo and Jo Daniels delve into solutions for addressing the compliance and regulatory complexities for EMI corporations.
Social unrest and populist movements are becoming an unavoidable part of business in parts of emerging Asia. EMI corporations can engage with stakeholders in the local community as part of outreach efforts to illustrate the social and economic benefits of certain projects and business deals. Managing this process is best accomplished with a boots-on-the-ground approach in which relationships with local business and political leaders are forged to create an understanding between parties.
To limit risk exposure, EMI corporations need to educate themselves on the regulatory nuances of local markets and seek to open a dialogue with local authorities. Businesses also need to build in expectations for a longer leadtime when it comes to securing government approvals. Furthermore, EMI corporations should consult local advisors on issues from tax compliance to environmental approvals to help them understand local laws and the enforcement landscape where laws and ordinances lack detail and clarity.
ACT ACCORDINGLY: KNOW THE LAW OF THE LAND
ABIDE BY HIGHER STANDARDS
When it comes to compliance and anti-corruption standards, most EMI multinationals will know the requirements of laws from their home jurisdictions, such as the US Foreign Corrupt Practices Act (FCPA). The challenge they face is whether they can still carry out their businesses efficiently and legitimately in investment destinations in Asia Pacific. Equally, the FCPA and other foreign legal guidelines stipulate that foreign businesses may face some consequences if their local suppliers and contractors are not fully compliant, even if these business partners are not familiar with these laws. To minimize risk exposure, corporations need to set up a strong compliance framework and train their staff to follow a comprehensive code of conduct.
ENGAGE LOCAL STAKEHOLDERS
PLAN FOR THE UNEXPECTED NATURAL
Natural disasters and social unrest are outside a corporation’s control, however, having a comprehensive business interruption plan can help manage the risks of these events. This includes insurance against heavy costs from disrupted supply chains and business processes and holds true when forging partnerships with local businesses: EMI corporations need to ensure their counterparties are adequately covered and have similar plans for worst-case scenarios.
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Energy, Mining and Infrastructure STEPS FOR SUCCESS: Regulatory foresight, local insight
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