Red Tape a borderless frustration

THE risks of cross-border business remain, with red tape continuing to be a very real frustration, Indian service companies are finding approvals processes too slow in Australia . . .

WHEN Australian companies lament the obstructiveness of bureaucratic red tape in Asia, they should also spare a thought for Asian companies trying to invest in Australia.
At least two Indian services companies in the infrastructure and energy sectors have been forced to reconsider their plans to invest in Australia because of delays in getting approvals through the system.
Sunil Lal, Executive Chairman of the Sydney-based multi-disciplinary law firm Kaden Boriss, says: “The issues involved local governments and unions. Our clients are frustrated by the slow progress in getting things done in Australia and are reassessing whether Australia is the right destination for them.”
Lal offers these examples to illustrate his point that the problem of bureaucratic red tape does not exist only in India and elsewhere, but here in Australia as well.
If the two companies choose to take their capital elsewhere, Australia will miss out on “sizeable” investments, he says.
But he admits that, on balance, the problem of bureaucracy is more acute in India.
India’s Modi Government is intent on creating a more conducive environment for much-needed foreign investment, but Lal says the stumbling block is getting the message through to the different levels of bureaucracy.
Projects are still being held up, even though they might have the blessing of the Prime Minister, he says.
Other concerns involve intellectual property protection and non-payment for services rendered or goods delivered. Lal also sees Australian companies having payment problems, some for just $18,000, others for as much as $200,000.
To help facilitate business between Australia and India, Lal and seven like-minded Chief Executives of Australian companies have got together to form what is known as the NSW Chamber of Australia-India Bilateral Trade.
It is chaired by the well-known business leader Maurice Newman, a former Chair of the ASX and ABC and former Chancellor of Macquarie University.
The Chamber has been born out of private sector frustration with obstructions faced in trying to do business in both India and Australia, Lal says. Membership is by invitation.
“We see our role as being a facilitator of business,” says Lal. “We understand the frustration in trying to get things done. One of our roles will be to help companies find the right partners.”
Lal, who co-founded the Chamber, notes that because concerns about China’s economy are growing, more companies are looking to other markets, including India.
He sees many opportunities in India in areas as diverse as education, hospitality training and energy.  His firm, Kaden Boriss, runs a large practice employing 30-40 people in New Delhi, and has, over the years, brought a number of Australian companies into joint ventures with Indian enterprises.
These include teaming Queensland’s  Griffith University with Narsal Unversity of Law in the Indian state of Hyderabad. Kaden Boris is currently working with Sydney University to make the University’s medical degree course available in India through e-learning.
Lal sees another emerging opportunity is
for Australian tertiary institutions to provide nursing courses for Indian students in India
in collaboration with reputable private Indian colleges. The Indian nurses could finish their training working in Australia on 457 visas, or
in the United Arab Emirates, which, like
Australia, is experiencing a shortage of nurses.
The idea is to allow the nurses to get practical training for two years before they return to India. “We have been talking to universities in Queensland, and they have shown interest in nurse training,” Lal says. There is also huge interest from Indian students for accountancy courses, which could be provided by the Chartered Institute of Accountants.
Risk assessment and assurance of such collaboration falls on Jay Chandler, who has just joined Kaden Boriss from Deloitte, where he was partner-in-charge of risk assessment.
Lal says he is constantly surprised that companies send their international business teams on repeated visits to markets like India, yet do not think of engaging a firm that has a depth of relationship and experience in the Indian market to undertake feasibility studies.
“It is not easy to find the right partner in
India,” Lal says. “Sometimes it could take five or six years to identify the right party.”  Despite it being patently obvious that overseas ventures should only be undertaken after thorough
assessment of the risks, Lal says it is not uncommon to see companies plunging into an offshore investment without proper due diligence.
He quotes the example of an Australian company which was set to go into joint venture tender for a multi-million dollar project in India
despite niggling concerns that its intellectual property would not be properly protected. There are some Australian firms, Lal says, that are happy to rely on “gentleman’s agreements” or a handshake when they should have proper contracts in place to protect against disputes.
Chandler points out that while India might have the same British-based judicial system as Australia, it is very costly in time and resources to get locked into the Indian legal system when there is a dispute.
Not surprisingly, companies have been known to call on Kaden Boriss for remedial work when something goes wrong. “But if the damage has already been done, there is not much we can do,” says Lal.
“So if we can‘t fix the problem, we don’t
do the work because we don’t want the reputational risk to our firm.”