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1 

Mr Tan Chong
C Huatt
Page
  

CSRD: Many practitioners feel laws are not useful to encourage social responsibility. What
are your comments on this?
TCH: It depends on how you define ‘encouraging’ social responsibility. If you mean having a
set of laws in place that mandate a company must give x percent of its net profit to charity,
then yes, the letter of the law would take away the spirit of corporate giving.
However, in terms of best workplace practices, non-discriminatory employment, fair
treatment of all employees - that is why we have successful, comprehensive and above all
enforceable labor laws, to ensure that all corporations (in Singapore) maintain a standard of
employee practices that are just and uphold basic tenets of human rights.

In the grey area between doing something because the law demands it, and offering to give
back to the community, I believe laws and guidelines are especially useful when it comes to
matters of reporting and disclosure. While it should not serve to discourage corporate
giving, enlightened corporate givers should also subscribe to the ideals of being able to
stand up to scrutiny and employing best practices when dealing with CSR; and in fact,
weaving these standards of disclosure and reporting into all aspects of their business.

We also are seeing a significant corporate shift globally, particularly the situation in China.
The Central Government has issued guidelines in Corporate Social Responsibility compliance
for state-owned and foreign-invested enterprises - a big step towards setting out a
framework for companies to draw reference from, which will hopefully serve to encourage
broader, better and more informed CSR initiatives and business practices.

CSRD: It is becoming clearer and clearer that integrity in financial reporting is vital for the
market. Should these be laws or merely guidelines?
TCH: At present, Singapore has an extensive set of Corporate Governance guidelines that
include independent directors, board members of companies to be on an external audit
committee, risk management, internal controls and whistle-blowing policy. By and large it
has proven itself quite successful. The point of interest to note is that while these guidelines
are ‘quasi-regulatory’, the breach of certain guidelines that amount to corporate fraud are
certainly supported by the enforcement of very clear legislation. It is this latter set of laws
that keep things on an even keel in corporate Singapore, and would certainly reinforce the
CG guidelines and act as an effective deterrent.
CSRD: Would a piece of law such as the USA’s Sarbanes-Oxley Act 2002 work in the Asian
context (for example, with the recent Satyam scandal)?
TCH: Many media sources are now likening the Satyam incident to “Asia’s Enron”. In order
for a Sarbanese-Oxley Act equivalent to work in Asia, it requires the expressed and
committed cooperation across Asia’s political machinery, a watchdog agency to uphold the
standards set out in the (Asian) Act, and the agreement across the board to employ the
section 802 equivalent of penalties. While it may be prudent for individual governments to
set out clear rules in terms of corporate disclosure, an all-encompassing Act applicable
across Asia may not be viable at this juncture.
Ultimately, no system or frameworks, control or guards is entirely foolproof. The Satyam
incident teaches us that determined management fraud resulting from a breach in ethical
conduct will find wars around the tightest systems.

CSRD: Should businesses cut back on their CSR initiatives during this current economic
trend?
TCH: As companies bite the bullet and cut operational costs, retrench workers and freeze
spending, it may seem like natural progression to cut back on CSR initiatives or stop them
2 

altogether.
Page
  

Howeve er, companies that have always ap pproached CSR

C in a stra ategic mann ner and hav ve made
it an inttegral part of
o their corp porate psycche will know that staying true and d focused on
o their
sustaina ability efforrts will be key towards reaping lon ng-term ben nefits. For e
example,
KhattarW Wong is pla anning a go o-ahead withh various tra
aining and welfare
w programs we have
h
planned d for employees this co oming year.. Our beneficiaries will also look fo orward to
continuued fund-raising efforts s and voluntteer engage ement. If an nything, we are expand ding the
scope ofo our CSR efforts
e furth
her, building
g on the suc ccess of thee previous yyear to incorporate
a more comprehen nsive approa ach to envirronmental awareness
a our current focus
- to add to o
on health and educ cation. I bellieve that dooing our bitt for the larger commu unity in difficult
times will
w not only help our ex xternal stak
keholders, but
b will serv ve to encourage our
employees and pro omote staff morale.

CSRD: What is the trend in th he PRC in terrms of CSR?? Do the bussinesses invvolved in the
melamiine poisonin ng understa and the ram mifications of
o what they y did?
TCH: Inn 2007, Chin na’s Presideent exhorted China’s le eaders to up
phold ’scienntific outloo
ok on
social developmen
d t’ - an apprroach that in
ncludes enc couraging businesses
b tto emphasiz ze
sustainaable develoopment, putt people firs st, and look beyond short-term profits.
Clearly, the message is for im mplementatio e practices, stricter disc
on of betterr workplace closure
standarrds and a view towards o China’s fledgling bra
s protective the value of ands. Goverrnment
bodies have follow wed to echo the Preside ent’s message, includinng the Shenzen and Shanghai
Stock Exxchange co oming up wiith a list of CSR Guidelines for listed companies. Incentiv ves and
potentiaal penalties
s are appliedd to complia ant and nonn-compliantt companies s accordingly.
Given thhe slew of scandals
s tha
at have hit the
t Chinese e manufactuuring and ex xport marke et in
recent years
y and thhe impact itt has create
ed in terms of foreign perception
p o
of Chinese
productts, I believe the trend in the years to come will be for Ch hinese comp panies to sttep
forth an
nd be accou unted as parragons of good
g CSR prractices.

CSRD: DoD you see the field off CSR growin ng as a speccialist area in the legal profession
n? Why?
TCH: Att this junctu
ure, CSR is still
s a soft approach
a wiith no legislative impacct or enforc
ceability.
Howeve er, the practtice areas of corporate governance and regulatory comp pliance lookk set to
grow ass more and more comp panies recog gnize the im
mportance of o good disc closure stanndard
and praactices.
In anticipation of the growing needs for suchs servicees, KhattarWWong has se et up a Corporate
Governa ance and Re egulatory Compliance Practice Gro oup that deals with adv vising boardds (of
directorrs) on matte
ers related to
t due compliance with h corporate e governanc ce matters, Listing
L
Manual and Compa anies Act coompliance requirement
r ts, requirem
ments regarding circula ars to
sharehoolders and other
o shareholder mattters. ◊

 
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