Hong Kong has best judicial system in Asia: business survey

Posted at 09/15/08 10:06 AM

SINGAPORE - Regional financial centers Hong Kong and Singapore have the best judicial systems in Asia, with Indonesia and Vietnam the worst, a survey of expatriate business executives showed.

The judiciary "is one of Indonesia's weakest and most controversial institutions, and many consider the poor enforcement of laws to be the country's number one problem," said the Political and Economic Risk Consultancy (PERC).

Some court rulings in Indonesia have been "so controversial that they have seriously hurt confidence of foreign companies," said PERC, without giving specific examples.

In the PERC survey, Hong Kong's judicial system topped the vote with a score of 1.45 on a scale that has zero representing the best performance and 10 the worst.

Regional rival Singapore was in second place with a grade of 1.92, followed by Japan (3.50), South Korea (4.62), Taiwan (4.93) and the Philippines (6.10).

Malaysia was in seventh place with a grade of 6.47, followed by India (6.50), Thailand (7.00) and China (7.25). Indonesia got the worst score of 8.26 after Vietnam's 8.10.

The Hong Kong-based consultancy said 1,537 corporate executives working in Asia were asked to rate the judicial systems in the countries where they reside, using such variables as the protection of intellectual property rights (IPR) and corruption.

Transparency, enforcement of laws, freedom from political interference and the experience and educational standards of lawyers and judges were also considered.

"Year after year our perception surveys show a close correlation between how expatriates rate judicial systems and how they rate the openness of a particular economy," PERC said.

"Better judicial systems are associated with better IPR protection, lower corruption and wealthier economies."

The less favorable perception of China's and Vietnam's judicial systems are rooted in political interference, PERC said, adding that the Communist Party "is above the law in both countries."

Despite India and the Philippines being democracies, expatriates did not look favorably on their judicial systems because of corruption, PERC added.

Malaysia's judicial system has suffered a "serious reputation damage due to political interference," while expatriates in Thailand "have serious doubts" that moves to expand the judiciary's powers will be good for the country, it said.

PERC noted the survey involved expatriate business executives, not political activists, so criteria like contracts and IPR protection were given more weight.

"This bias is possibly most obvious in Singapore," it said, noting that the city-state's top rating in the survey is not shared by political activists, who have criticized the ruling People's Action Party (PAP) for using the judiciary to silence critics.

"In Singapore, the general perception of expatriates is that local politics has not compromised the way commercial and criminal law is conducted," PERC said.