About

Small and Medium Enterprises (SMEs) can serve as an engine of economic growth as long as they operate and innovate in ethical business environments. To address this issue, APEC SME Ministers issued a joint statement in September 2010 calling for the development of APEC codes of ethics in key sectors.[1]  Reinforced by APEC Ministers (foreign and trade ministers) in November 2010 in Yokohama,[2] this call launched the Business Ethics for APEC SMEs Initiative to improve and align industry practices – beginning with the development of APEC principles for code of ethics – within the medical device, biopharmaceutical, and construction and engineering sectors.  With support from all 21 APEC member economies, $1.2 million[3] (USD) in multi-stakeholder contributions was secured in 2011 to advance the initiative. With a multi-year effort underway to implement the principles across the region, APEC Leaders (heads of state) declared their support for the initiative in September 2012 in Vladivostok.[4] The initiative was expanded in 2013 to include participation by key stakeholders in all ten ASEAN economies. Recognizing the results achieved, APEC SME Ministers announced their support in September 2013 for the first APEC Business Ethics Forum to continue regional cooperation and capacity building during China’s APEC 2014 host year.[5]    

 

APEC Principles for Voluntary Codes of Ethics

 

Voluntary codes of ethics benefit APEC economies by providing a platform for effective industry self-regulation while supporting government enforcement and anti-corruption efforts. They benefit businesses, especially resource-constrained SMEs, by providing clarity and harmonization in industry practices and by enabling firms to compete across the region at a reduced cost. Ethical collaborations fueled by high-standard codes also ensure decisions are made in the best interest of consumers and patients. With this understanding, Expert Working Groups were convened to draft three sets of APEC Principles for Voluntary Codes of Ethics:   

 

  • In April 2011, an Expert Working Group was convened in Kuala Lumpur to formulate APEC principles for codes of ethics in the medical device sector.  The meeting brought together industry compliance experts, anti-corruption and health officials, and academics from 18 APEC economies. Co-Chaired on a public-private partnership basis by Malaysia (Malaysia SME Corp) and the United States (AdvaMed), the Expert Working Group developed a consensus set of APEC Principles for Voluntary Codes of Ethics in the Medical Device Sector (The Kuala Lumpur Principles).[6]  The KL Principles were swiftly endorsed by APEC SME Ministers in May 2011.[7]  

 

  • In September 2011, an Expert Working Group was convened in Mexico City to formulate APEC Principles for codes of ethics in the biopharmaceutical sector. The meeting brought together industry compliance experts, anti-corruption and health officials, and academics from 14 APEC economies.  Co-Chaired on a public-private partnership basis by Mexico (Ministry of Economy) and Canada (Rx&D), the Expert Working Group developed a consensus set of APEC Principles for Voluntary Codes of Ethics in the Biopharmaceutical Sector (The Mexico City Principles).[8] The Mexico City Principles call upon all biopharmaceutical sector stakeholders to embrace aligned standards for ethical interactions, including companies and industry associations, professional organizations (such as physician associations), as well as regulatory and anti-corruption authorities. 

 

  • In October 2011, an Expert Working Group was convened in Hanoi to formulate APEC Principles for codes of business ethics in the construction and engineering sector.  The meeting brought together compliance experts, anti-corruption officials, and business ethics academics from 21 APEC economies and developed a consensus set of APEC Principles for Voluntary Codes of Ethics in the Construction and Engineering Sector (The Hanoi Principles).[9] 

 

In November 2011, APEC Ministers (foreign and trade ministers) endorsed these Principles and issued the following joint statement in Honolulu: “We applaud the decision of the APEC SME Ministers at Big Sky, Montana in May 2011 to endorse the Kuala Lumpur Principles for Medical Device Sector Codes of Business Ethics. This set of principles for the region’s medical devices industry is the first of its kind, and will improve the quality of patient care, encourage innovation, and promote the growth of SMEs that produce medical devices. We also congratulate the work of the APEC SME Working Group in establishing voluntary sets of ethics principles for the biopharmaceutical sector (the Mexico City Principles) and the construction and engineering sector (the Hanoi Principles). We endorse these three sets of principles and look forward to further APEC efforts to ensure that these principles have a practical impact for small and medium-sized companies.” [10]

 

In June 2012, APEC Ministers Responsible for Trade reaffirmed this endorsement, calling on regulators and anti-corruption authorities to continue to advance collaborations consistent with the Principles: “We endorse the importance of initiatives in anti-corruption activities within APEC economies to strengthen trade and investment in the APEC region, particularly by promoting public-private partnerships in this sphere. Corruption poses a significant market access barrier and high cost for companies, especially SMEs, limiting growth and financial integrity. We reaffirm our commitments to fight corruption and illicit trade, and to ensure transparency through boosting cooperation among APEC economies and other international stakeholders. We welcome continued APEC capacity building efforts to implement voluntary codes of business ethics and facilitate industry regulators and anti-corruption enforcement authorities to advance ethical collaborations in line with the APEC principles.” [11]

 

Implementation of the APEC Principles

 

Starting in 2012, a multi-year effort was launched to implement the three sets of principles as well as to build awareness among stakeholders in each sector.  This effort is supported by the APEC SME Working Group, APEC Health Working Group, APEC Anti-Corruption & Transparency Working Group, APEC Life Sciences Innovation Forum, and APEC Business Advisory Council.

 

In April 2012, an APEC Workshop to Draft Voluntary Codes of Business Ethics in the Medical Device Sector was held in Brunei Darussalam.  Leading compliance experts, industry executives, and government officials from 19 APEC economies began the process of supporting medical device industry associations to draft or align local codes of ethics with The KL Principles.[12]  

 

In July 2012, an APEC Workshop to Align Voluntary Codes of Business Ethics in the Biopharmaceutical Sector was held in Chinese Taipei.  Leading compliance experts, industry executives, physician/consumer association representatives, and government officials from 15 APEC economies began the process of supporting biopharmaceutical industry associations to draft or align local codes of ethics with The Mexico City Principles by 2013.[13]  

 

In August 2012, APEC SME Ministers welcomed progress during their meeting in St. Petersburg: “We agree that corruption imposes a significant market access barrier and high costs for SMEs. To address this challenge, we endorsed principles for voluntary codes of business ethics for the medical device, biopharmaceutical, and construction/engineering sectors. We recognize the importance of working to raise awareness of these principles. We welcome progress in implementing these principles, through the development of codes of ethics by industry associations and companies and capacity building efforts. We call on other relevant stakeholders, such as professional organizations, to implement voluntary codes consistent with these principles. We urge industry regulators, anti-corruption enforcement authorities, and the relevant entities to encourage, advance, and facilitate acceptance of voluntary industry codes and ethical collaborations consistent with these codes.” [14]

 

In September 2012, APEC Ministers (foreign and trade ministers) stated: “We…welcome progress in the implementation of APEC principles for voluntary codes of business ethics and look forward to further APEC efforts to strengthen ethical business practices through capacity building activities.” [15]

 

On 9 September 2012, APEC Leaders (heads of state) unanimously declared their support for this initiative, stating: “We recognize the important role of business and public-private partnerships in promoting the elaboration of codes of conduct in the private sector and measures to fight corruption, especially measures that support the promotion of ethical business practices in interactions between government, business and other stakeholders. We welcome efforts by our SME Ministers, industries and academics to promote voluntary, industry-specific APEC principles that aid in this effort.” [16]

 

Expanded Implementation & Capacity Building

 

On 26-30 August 2013, the Governments of the United States and Malaysia held the APEC Train-the-Trainer Workshop for Voluntary Codes of Business Ethics in the Medical Device, Biopharmaceutical and Construction and Engineering Sectors in Kuala Lumpur, Malaysia. The event was attended by Prime Minister Mohammad Najib Abdul Razak, leading compliance experts and industry representatives from 22 APEC and ASEAN economies.[17] As the largest initiative program to-date, the event established a crucial network of more than 100 ethics trainers spanning all three sectors to advance implementation of codes of ethics aligned with the APEC principles.

 

On 3 September 2013, the Governments of the United States and Indonesia held the APEC Healthcare Stakeholders Awareness High-Level Meeting: Fostering Ethical Business Practices in the Medical Device and Biopharmaceutical Sectors in Nusa Dua, Bali, Indonesia. Bringing together the leaders of physician and hospital associations with senior health regulators and anti-corruption officials from 17 APEC economies[18], the meeting resulted in the Nusa Dua Statement on strengthening ethical interactions among the region’s key healthcare stakeholders.[19]

 

In their 2013 Joint Statement, APEC SME Ministers declared: “We appreciate the capacity building train-the-trainer workshop hosted by Malaysia and the United States to make codes of conduct in the medical device, biopharmaceutical, and construction-engineering sectors functional and operational in companies throughout the APEC region as instructed by Ministers and Leaders. More than 100 newly trained ethics compliance trainers will implement ethics compliance training throughout the APEC and ASEAN trade region in the upcoming year. This work will raise ethics compliance awareness and place ethics compliance at the core of business applications which is an imperative for conducting business in today’s global marketplace…We appreciate the initiative… to organize “The Workshop on Stakeholder Awareness for the Healthcare Sector”. This workshop will increase public and private sector ethics awareness and further facilitate the implementation of business codes of conduct to ease trade barriers in the healthcare sector. We applaud the Bali Statement that fosters ethics compliance among relevant healthcare stakeholders and the creation of an APEC Business Ethics Forum to further facilitate regional cooperation and capacity building in our fight against corruption.” [20]

 

On 5 October 2013, APEC Ministers (foreign and trade ministers) emphasized their continued support: “We reaffirmed the importance and the need to enhance prevention and enforcement in addressing corruption…We also reaffirmed our commitment to create ethical business environments that support sustainable economic growth, in particular by strengthening ethical standards, and we encouraged all stakeholders to implement APEC’s high standard principles for codes of business ethics.” [21]

 

2014 APEC Business Ethics Forum

 

APEC member economies will hold the first APEC Business Ethics Forum in Nanjing, China on 1-3 September 2014. The Forum will advance code of ethics implementation through sector-specific training sessions as well as convene key stakeholders in a plenary session to address current and future ethical issues confronting the medical device and biopharmaceutical sectors.  

 

For more information on this initiative, please contact apecbizethics@gmail.com.

 


 

[3] $414,000 from APEC and $743,000 from in-kind contributions from co-sponsoring APEC economies

[10] 2011 APEC High Level Policy Dialogue on Open Governance and Economic Growth:  http://www.apec.org/Meeting-Papers/Ministerial-Statements/Annual/2011/2011_amm/2011_governance.aspx

[11] 2012 APEC Ministers Responsible for Trade Meeting Joint Statement: http://www.apec.org/Meeting-Papers/Ministerial-Statements/Trade/2012_trade.aspx

[12] APEC Workshop Participant List (Medical Device Sector):  http://dl.dropbox.com/u/78655346/Participant%20List_Brunei.pdf

[13] APEC Workshop Participant List (Biopharmaceutical Sector): http://dl.dropbox.com/u/78655346/Participant%20List.pdf