White Collar Crime, Digital IDs and the Kings of Asia

BANGKOK, THAILAND – When the U.S. Department of Justice levied a $170 million-dollar criminal penalty against Rolls Royce over an international bribery scandal in 2017, then head of the DoJ’s criminal fraud section, Andrew Weissmann, addressed questions about American jurisdiction in the case – which did not feature in the list of target nations – by saying that “the global nature of this crime requires a global response”.

The “extensive systemic bribery and corruption” admitted to by the British engine-maker’s CEO, spanned nearly two decades and stretched across eleven countries, including Russia, China, Iraq, India, Indonesia and Thailand. Allegations of payoffs, contract-fixing and access to insider information were tackled by multiple law enforcement agencies, with the United Kingdom’s Serious Fraud Office (SFO) and Brazil’s Ministério Público Federal (MPF) handling charges concerning Rolls Royce’s defense and civil aerospace sectors, while the U.S. focused solely on the company’s energy divisions.

Weissmann, who led the DoJ’s Enron Task Force, centered on corruption charges involving Thailand’s state-owned oil company, PTT, whose employees were accused of taking millions of dollars in bribes over the course of ten years. The scheme was supposedly executed through PTT’s accounting software, where Rolls Royce’s intermediaries would hide the payments, totaling more than $11 million. 

PTT, formerly the Petroleum Authority of Thailand, is the country’s largest enterprise and was set up to carry out the nation’s energy policy since its establishment in 1978. Thailand’s persistent military coups and captured monarchy has kept the country’s energy sector well within the grip of Western companies, like Chevron, which is its largest oil producer. Hovering between 5th and 6th among regional sources of crude and 22nd in natural gas reserves, these are nevertheless outpaced by consumption, making the Southeast Asian nation a net importer of oil and gas. 

Rolls Royce avoided any actual criminal charges as a result of statutes of limitations rules and other loopholes such white collar crime investigations typically find in the course of their prosecution. Despite calls for Sir John Rose’s knighthood to be stripped – Rolls Royce’s CEO during the carnival of corruption ­–, and other expressions of outrage, the manufacturing giant incurred only hefty fines.

Meanwhile, Thailand and the other countries involved are left facing increased pressure from emboldened global governance entities, such as the OECD, which availed themselves of the accusations (some of which were never conclusively proven) in order to promote implementation of stricter security protocols and technologies. 

In a paper published at the organization’s 2019 Anti-corruption & Integrity Forum titled Bridging the Gap Between SFO and DoJ Practice In Remediating the Victims of Foreign Bribery, the Rolls Royce/PTT corruption case was presented as an example of the limitations of current remediation processes and pointed, specifically to the inability to identify “those who paid bribes” as one of the crucial factors that “ultimately made the quantification of the bribes impossible”.

Digital Encirclement  

The paper concluded that the existing gap within law enforcement agencies to properly identify the victims of bribery schemes involving corporate and state actors is the top factor impeding appropriate compensation actions. It seems, therefore, quite propitious that IBM and AI & Robotics Ventures Company Limited (ARV), a subsidiary of PTT, have joined forces to build a National Digital Corporate Identity (NCID) platform.

Billed as “first-of-its-kind” in ASEAN (Association of South East Asian Nations), the blockchain-based technology was developed on IBM Cloud and Red Hat OpenShift. As reported by Silicon Icarus last November, IBM’s acquisition of Red Hat in 2019 was an integral part of the multinational’s big pivot towards a new phase of ICT (Information and Communication Technologies) implementations, and its push to “accelerate digital transformation across the oil and gas industry”.

Set to go live this year, the system is being touted publicly as a way to “uncover and tackle the bottle-neck challenges of the corporate onboarding process with Web3 technology”, such as cryptocurrencies, NFTs and assorted economic concepts of the ‘metaverse’. As part of the Ministry of Finance and Bank of Thailand’s “Smart Financial Infrastructure” project, the corporate digital ID system will make its debut at the state-owned energy company itself.

PTT will help accelerate the “standardization of corporate identity verification process[es] for banks in Thailand and […] the journey towards comprehensive digital infrastructure” of the Southeast Asian country, as Managing Director of IBM Thailand, Sawat Asdaron, was quoted in the press release.

By using PTT as its guinea pig, the corporate digital ID system instantaneously links to virtually every other sector of the Thai economy. From its vital relationship to the transportation to the petrochemical industries, PTT is positioned to serve as the linchpin for the adoption of blockchain-based digital ID technology across the entire country, and thanks to another recent development, to the rest of Southeast Asia, as well.

The Jewel on the Yangtze 

Thailand’s Digital Economy Promotion Agency (Depa) just signed an MoU (Memorandum of Understanding) “to ramp up technology exchange and drive smart city development” with the Austrian Technology Corporation (ATC), which is an organ the Austrian government tasked with coordinating and managing the various ICT infrastructure interests on behalf of its private sector, both domestically and internationally. 

Depa was established in Thailand’s Digital Development for Economy and Society Act of 2017, a “legal entity“, whose members are appointed by the Minister of Digital Economy and Society to “promote the development of digital industry and innovation, support and promote digital technology adoption which benefit the national economy, society, culture, and security”.

The partnership is significant given Austria’s leading role in the EU’s broader roll out of smart technology infrastructure and the ATC’s intimate involvement with the most important smart city projects in China; in particular, its activities as part of the Yangtze River Delta (YRD) Regional Integration Development Plan – China’s main economic development strategy in an area that is perceived as the “jewel in the crown of China’s economic transformation”.

ATC works in conjunction with the World Bank and the EBRD (European Bank for Reconstruction and Development), among other supranational financial institutions to form networks of “key stakeholders and interested parties” around smart city technologies and digital ecosystems. 

Quadruple Helix 

As a cooperating member of the Yangtze Delta Region Institute of Tsinghua University, and critical smart infrastructure projects in China and Southeast Asia, ATC’s partnership with the Thai government alone might not raise too many alarm bells. But, in light of IBM’s blockchain-based corporate digital ID system, which is on the verge of being implemented in the financial and business sectors of a key ASEAN nation, this development seems more than mere happenstance.

Austria’s official representation in Silicon Valley, Open Austria, is headed by the former Deputy Trade Commissioner in Thailand for Austria’s Federal Economic Chamber, where its American communications director also taught English before serving as an intern at the US Consulate General in Frankfurt, Germany. 

As an initiative of The Federal Ministry Republic of Austria and other government agencies, Open Austria is tasked with implementing the country’s Open Innovation Strategy, described as the intention to broaden “the classic triple helix model (science and research, industry, public administration and politics) to a quadruple helix model (that includes civil society)” in order to “reduce the inherent risk of failure [of digital ecosystems] through the early involvement of society and the market”.

Thailand looks to figure prominently in the plans for the construction of a worldwide digital ecosystem, which must remain free from the constraints of the political theater between East and West. Private concerns like IBM have always proved nimble enough to move in the shadows as they play all sides. But governments have a pretense to maintain, and a small country like Austria can allow other, more compromised national entities to maintain theirs.

Cover Photo: PTT Kiosk in the background at ‘Maintenance & Resilience Asia 2019’, people gather around an underwater robot capable of fixing petroleum pipelines, in Bangkok. Somchai Poomlard