News

Maplecroft launches third annual ‘Legal and Regulatory Environment Risk Atlas’ assessing risks for companies doing business abroad

15/12/2011

Risk analysis company Maplecroft is releasing the third annual Legal and Regulatory Environment Risk Atlas, which has been developed to enable companies to identify and monitor risks presented by corruption, inconsistent laws and unreliable, cumbersome and unpredictable regulatory structures when operating abroad.

The Legal and Regulatory Environment Risk Atlas 2012 (LREA) includes 21 risk indices and interactive maps covering 173 countries, which analyse risks stemming from six key areas: corruption, corporate governance, regulatory frameworks, respect for property rights, rule of law, and supply chain complicity risk.

According to Maplecroft, the stability and effective implementation of a country’s legal and regulatory environment can have serious implications for investment and business operations.

“For the legal and regulatory environment to be conducive to investment it requires well-constructed regulation, transparency and effective implementation,” states Maplecroft CEO, Alyson Warhurst. “Protection for investors can be weak where there is a lack of legal and regulatory oversight, while uncertain, overburdening and ineffectual legal and regulatory oversight can make it more difficult to carry out business.”

The LREA is particularly important for companies operating in the growth economies, such as the BRICs (Brazil, Russia, India and China) and N11 (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, the Philippines, South Korea, Turkey,
Viet Nam).

These countries are seen as being ripe for investment and development due to fast and sustained economic growth. However, they exhibit potentially high risks to business through complicity in unlawful activity, particularly corruption, ineffectual and prejudiced judiciaries, and labour standards violations that make it difficult for business to uphold international covenants and corporate responsibility commitments. In addition, labour violations can give rise to unrest, which increases the cost of doing business and can cause supply chain disruptions.

Businesses that operate in countries where the legal and regulatory environment is shown by Maplecroft's Atlas to present significant risks can take steps to reduce their exposure by conducting thorough due diligence and risk assessments. Where local regulations and standards are inadequate, businesses can take steps to mitigate risk by, at a minimum, complying with international best practice, including International Labour Organisation conventions and the 2002 UN Convention against Corruption.

The LREA 2012 also provides a unique assessment of the implementation of ten key international legal instruments for all countries. This assessment moves beyond noting a country's ratification status to considering the strength of domestic laws and the regulatory environment, as well as whether the state is upholding its commitments. The ten instruments analyse the commitments by governments to international standards in key regulatory areas, including corruption, investment protection, judicial process, intellectual property protection and anti-money laundering.

About Maplecroft

Maplecroft products, tools and services empower clients to assess and monitor the key political, economic, social and environmental risks impacting global business today. These resources analyse risks to supply chains, investments, operations or markets at country or site level and can be tailored to any sector or company. By mapping the relationships between risks, Maplecroft offers visually compelling solutions that quantify the qualitative and make sense of an increasingly interconnected world.

WebEx

A WebEx on the LREA 2012 will be held on 16 January, 2012, 15.00 GMT (10.00 EST). Professor Alyson Warhurst, Founding CEO of Maplecroft and Honorary Professor at Warwick Business School will present the LREA 2012 findings, analysis, methodology and outlook for business and investors in the growth economies. Register at info@maplecroft.com – please note that places are limited.

For more information visit the Legal and Regulatory Environment Risk Atlas 2012, which includes 21 risk indices and interactive maps, as well as analysis of the results and a unique assessment of the implementation of ten key international legal instruments for all countries.