Remarks by Under Secretary Lago - September 12, 2022

W Bangkok, Bangkok, Thailand
September 12, 2022

As Prepared for Delivery

Thank you, Tricia Van Orden, for that introduction and, even more so, for your solid, expert leadership as Project Overseer of the Business Ethics for APEC SMEs Initiative.

On behalf of the United States Government and Department of Commerce, welcome. I am so glad that you have chosen to be with us today. 

Thank you also to Dr. Wimonkan Kosumas for joining us this morning. We have enjoyed a strong and productive partnership with the Royal Thai Government throughout its APEC host year, and deeply appreciate its support for this Forum.

I am also grateful to Norlela Suhailee, chair of the APEC Small and Medium Enterprises Working Group, and Tan Sri Dr. Rebecca Santa Maria, Executive Director of the APEC Secretariat, for sharing their wisdom with us later on in today’s program.

After two years of virtual activities, the excitement in this room is palpable as we are convening again in person, especially to discuss a topic for which personal connections and peer-to-peer learning are crucial. Amplifying this energy, we are very pleased to welcome a large virtual audience, enabling much broader participation in today’s plenary. 

Whether participating here in Bangkok or virtually, it is all of you—hundreds of generous, committed stakeholders—who make the Business Ethics for APEC SMEs Initiative possible through your time, attention and expertise. My colleagues and I are grateful for your continued support for the world’s largest public-private collective action effort to strengthen ethical business practices in the health sector. 

The global economy—and especially healthcare—has undergone seismic shifts since this group last met. But nonetheless, our shared commitment to high ethical standards has remained ironclad. In fact, the pandemic has only reinforced the importance of high ethical standards, and of trust, integrity and efficacy in the health economy. If anything, the lessons of the pandemic make our gathering today that much more significant. 

As this is my first Forum, and I am meeting most of you for the first time, I will share that, in addition to serving as U.S. Under Secretary of Commerce for International Trade, I also come to you as a compliance professional, having spent several years as global head of compliance for a multinational corporate and investment bank. I place an extremely high value on your work, understanding the difficulty of creating a culture centered on an unwavering commitment to ambitious ethical standards—especially in such a highly regulated industry—and one that truly holds our lives in its hands. So, I am especially glad to be in your good company here.

Let me underscore why our U.S. Government team—starting with President Biden himself—is so committed to this business ethics effort.

In economies around the world, corruption exacts a heavy social and economic toll—destroying trust, distorting markets, raising the cost of doing business, deterring investment and reducing opportunity. And, as the United States Strategy on Countering Corruption makes clear, it also starves citizens of crucial services, including healthcare.  

In a moment of acute health challenges—when trusted, quality care is indispensable—we simply cannot accept unethical behavior that threatens patient outcomes. Nor can we tolerate economic drag in a sector that plays such an outsized role in APEC economies. 

More than one in every seven jobs in the United States is in the health economy.  This figure varies among our economies, but across APEC, the healthcare sector is a key contributor to growth and employment. And the importance of the healthcare sector will only grow as populations age.  It is incumbent on all of us to ensure that the region’s health economy is vibrant, innovative, competitive and rid of corruption—to foster sustainable growth and to best serve the billions of patients across our markets. 

The key tool at our disposal is ethical business practices, which have the power to prevent and mitigate the cancer of corruption. Minimizing the costs of corruption is admirable, but that is only part of the story. Affirmative ethical practices also unleash investment and foster innovation, improving our economies’ competitiveness and boosting patient outcomes.   

It is what our citizens have rightly come to expect:  robust regulatory processes that revolve around safety and efficacy; public procurement systems that yield the right purchasing decisions for the right reasons and at fair prices; and health economies in which patients receive the best devices and medicines to treat or diagnose their conditions. This is something about which I feel particularly passionately as the proud owner of two titanium knees that have transformed my life. 

And it is what our citizens deserve. These goals are in reach because of you. You are already raising the standard and pulling your peers along with you.  I am proud to continue that work together today, and I will highlight two particular areas of emphasis for this year’s Forum. 

First is broadening the conception of ethical business practices from being the right choice to also being the business savvy choice.

This is evident in the explosion of investor enthusiasm for Environmental, Social and Governance, or ESG, considerations. ESG has become increasingly important for SMEs, which are assessed as more valuable when they adhere to high standards—the baseline in today’s competitive marketplace.  SMEs that continue to aim high will maintain a competitive edge in this race to the top, while inaction or poor standards will prove detrimental. 

For the past decade, APEC’s Business Ethics Initiative has worked with SME leaders to establish the “tone at the top”—including supporting capacity building, adoption and implementation of codes of ethics, and values-based decision-making. The importance of these efforts is highlighted by the market’s emphasis on ESG and evolving stakeholder expectations. 

The second major focus area of today’s Forum is consensus frameworks, which have the power to unite diverse stakeholders with disparate interests to expand the possibilities of ethical business practices in a given economy.  

We have teamed up with the Basel Institute on Governance to offer a consensus framework workshop, which will be held tomorrow, as well as an ongoing mentorship program and best practices sharing to strengthen ethical collaboration and accelerate consensus framework adoption within APEC and globally. I will recognize Gemma Adolfi and Vanessa Hans for their leadership and expertise here. Thank you both for your partnership with this Initiative. 

Let me give you a sneak preview of what is in store for this Initiative next year, during the United States’ APEC host year.  In addition to hosting a Forum that advances all of the Initiative’s lines of effort, we will convene a separate dialogue with APEC anti-corruption officials on government strategies to encourage ethical business conduct. 

Governments have an important role to play in enforcing anti-corruption laws, but they can also advance affirmative steps and provide resources to build capacity and support businesses, especially SMEs, around compliance and adoption of best practices for ethical business conduct. I hope that many of you will join us in this work over the next year. On that note I will thank all the government officials in attendance today, including delegates from Thailand, Viet Nam and Canada.  I would encourage other stakeholders to engage your relevant government authorities, urging them to learn more about this Initiative and to participate next year.    

It has been a privilege to be here with you today. I am profoundly impressed with the accomplishments of this Initiative over the past 10 years, and I am excited for its future. 

See you next year in the United States, if not before then. Khob-khun-kha.