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Business Inspections reform gets some traction in Mongolia

David Lawrence's picture

GASI2 The Mongolian Government has declared 2010 the year of improving the business environment. This is a good thing for us, since two of our programs, Business Inspections Reform and Corporate Governance, aim to do just that.

Today Prime Minister Batbold gave a speech at the Government Agency for Specialized Inspections (GASI), which conducts inspections of businesses. We have been working with them for the better part of a year to reform the way inspections are conducted, which should, if successful, reduce the costs of inspections to small businesses. A recent national survey showed that Mongolia inspects businesses a lot more than many countries in the region, and that many of these inspections are entirely divorced from risks to consumers.

As expected, there is resistance to reforms. Employees of the Inspection Agency have an underlying belief that businesses are harmful to society, and that their job as inspectors is to catch them and fine them. So it was a great relief to hear the Prime Minister tell them, directly, that inspections reform is essential and that they need to base their inspections on risk and use checklists, which make the scope of inspections clear. He also said that inspections cannot be a tool for collecting money from businesses. 

Good stuff. It is clear that our key messages are getting through.

Comments

Submitted by Rainer Haberkorn on
As an auditor for KPMG, I have told always to the people that the auditor is not there to punish - it is just the opposite. The auditor is your advisor to help you to improve the quality of your work, resulting in promotion by your management. As team leader for the implementation of Corporate Governance Standards in 4 banks in Azerbaijan I felt the "resistance" of all managers. I have lived more or less 5 years in Mongolia dealing with local banks, you will have to go a long road to change the mentality of the local managers - mainly in private business - good luck with your task. It will take generations to get away from the former soviet mentality.

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