On October 16, 2024, the Anti-Corruption Cooperation Committee (ACCC) in Thailand introduced an updated notification aimed at enhancing anticorruption measures within the public procurement system. Officially titled the “Notification of the Anti-Corruption Cooperation Committee on the Procurement Budget and Minimum Standards of the Policy and Directions for Anticorruption in Relation to Procurement according to Section 19 of the Public Procurement and Supplies Administration Act B.E. 2560,” the new guidelines replace previous regulations and impose stricter compliance requirements on businesses involved in government procurement. These updates not only reinforce the objectives of the Public Procurement and Supplies Administration Act B.E. 2560 (2017) but also reflect the government’s commitment to reducing corruption, particularly in large public contracts.
The new notification introduces several key changes, including refined definitions, a lowered budget threshold for compliance, and enhanced obligations for businesses engaging in procurement processes.
Key Changes in the New Notification
The updated notification retains the requirement for businesses bidding on government contracts to meet minimum anticorruption standards. These include establishing clear anti-corruption policies throughout the organization, creating a code of conduct, and offering training programs for employees. However, several significant changes have been made to strengthen the existing framework:
- Definition of “Entrepreneur”: The term “entrepreneur” has been narrowed to specifically refer to entities involved in bidding for public procurement projects. Previously, this term applied broadly to all businesses selling goods or services.
- Lowered Compliance Threshold: The threshold for mandatory compliance with the minimum standards has been reduced to THB 300 million, down from the previous threshold of THB 500 million. This change means that a greater number of projects will now require businesses to meet these anticorruption standards.
- Prevention of Unfair Competition: The new notification clearly defines actions that disrupt fair competition, setting specific parameters around what constitutes “disturbing fair competition” in the public procurement process. This aims to ensure a more transparent and level playing field for all participants.
- Extended Compliance Period: Businesses must now maintain compliance with the minimum standards from the date of their bid submission until the final payment for the project. This ensures that anticorruption practices are upheld throughout the duration of the contract.
- Mandatory Training and Policy Reviews: Companies are required to conduct anticorruption training for both management and employees at least once per year. Additionally, businesses must review their anticorruption policies every three years to ensure they are aligned with evolving standards and regulations.
- Certification Opportunities: Businesses can now seek certification for their anticorruption practices from organizations approved by the ACCC. This includes obtaining certifications like ISO 37001 for anti-bribery management systems or recognition from the Thai Private Sector Collective Action Against Corruption. Companies with such certifications can submit these credentials as part of their procurement bids, which can enhance their credibility and competitiveness.
Consequences of Noncompliance
Failure to comply with the updated standards can result in severe consequences for businesses, especially those involved in projects with budgets exceeding THB 300 million. Noncompliance could lead to disqualification from future government procurement opportunities and damage a company’s reputation. The financial and reputational risks associated with noncompliance emphasize the importance of adhering to these new anticorruption standards.
In summary, the ACCC’s updated notification sets a higher standard for businesses engaging in public procurement in Thailand. With stricter compliance requirements, clearer definitions, and more detailed regulations, the new guidelines aim to foster greater transparency and reduce corruption in government contracting processes. Businesses seeking to participate in public procurement must ensure they meet these new standards to maintain eligibility and protect their reputation.