Chris Fossick: Building trust in ASEAN’s emerging economies

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I was honoured to be invited to speak as part of a session at the Forum on ASEAN on the topic of “Rebuilding Trust: Ending Corruption”. Joining me in the discussion – which was facilitated by Jamil Anderlini, Asia Editor of the Financial Times – was a diverse group of speakers from business, academia and the non-profit sector.

It’s a subject to which we give considerable thought at JLL. The concept of trust is key to the way we do business around the world – not just here in Southeast Asia.

In the discussion, we first considered the main challenges to overcome when it comes to fighting corruption: what steps need to be taken by when, and who needs to be involved?

In the past, when looking to do business somewhere new or with someone new, most companies simply carried out due diligence – a review of Transparency International’s Corruption Perceptions Index, for example. Today, that’s no longer enough. Shareholders also expect companies to consider human rights issues when determining whether they should do business in a country or with a particular partner.

In the 45 years we have operated in ASEAN, we have made acting with integrity a top priority and have made a conscious effort to invest in Southeast Asian markets to help bring positive change. I believe that engaging in developing markets – with their acknowledged trust and transparency challenges – is the right approach, but it is not always easy to convince shareholders and civil society.

We then talked about what milestones need to be reached by 2020 and 2030 in order to tackle these challenges. From a real estate point of view, we believe things are already moving in the right direction. Transparency in real estate transactions has been improving steadily over the past decade or two, according to our latest Global Real Estate Transparency Index.

Covering 109 markets worldwide, the biennial report quantifies transparency in real estate based on variables relating to transaction processes, regulatory and legal frameworks, corporate governance, performance measurement and data availability.

In 2016, Asia Pacific outperformed the other regions in terms of aggregate improvements over the previous two years. And transparency isn’t just good news for investors – it has a significant impact on quality of life, as it protects people’s ownership rights and helps improve building safety. The progress is encouraging, but we can’t be complacent and we need to make a conscious effort to invest in challenging markets to help bring change from the inside.

The key points I took from the session were that there needs to be a political champion to drive change; there should be clear measures of success so that people understand and appreciate when progress is made; and clear standards and laws need to be in place with an independent judiciary and suitable deterrents.

That’s not going to be easy to implement across this diverse region, but it’s certainly something that’s at the top of the agenda for ASEAN’s decision-makers. And I firmly believe companies like JLL have a role to play in improving business practices in emerging markets.

Chris Fossick is Managing Director, Singapore & Southeast Asia, JLL