The unprecedented event marked the first time that heads of state from Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Singapore, Thailand, and Vietnam were officially hosted in Australia. Philippines president Rodrigo Duterte did not attend the summit.

Hesitation despite signs of business boon

ANZ forecasting predicts that by 2030 the region will grow into the fourth biggest market in the world. In this time the bank predicts that ASEAN’s record of a near doubling of nominal gross domestic product in the last 10 years will continue. This means that within 12 years, the market of the ASEAN bloc will only be dwarfed by the EU, US, and China.

But various commentators believe there is a lot more that the Australian private sector can do to seize opportunities, which the rapidly growing populations and markets of the ASEAN members present.

ANZ Philippines CEO, Anna Green recently considered why Australian business remains hesitant in engaging with the rapidly growing ASEAN business market, despite trade flows increasing. In a recent piece entitled ‘Can ASEAN’s opportunity equal China?’ she suggested that there were comparable issues between ASEAN and China’s position some 10 years ago.

The comparison is most striking when analysing the challenges associated with compliance, consistency in application of laws relating to trade and customs and geographically disparate populations, she says.

Ms Green also suggests that transparency surrounding application of different legal frameworks in each of the ASEAN member states were a concern for businesses in some cases, a similar business sentiment expressed about China a decade ago.

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According to Glynn Cooper, who is a partner in the Kuala Lumpur office of global firm Herbert Smith Freehills, private sponsors and investors will play a critical role in helping meet infrastructure needs across the region.

The challenges of doing cross-border business in the ASEAN region are an important consideration for clients, particularly where the legal landscape is clearly fragmented, but he believes that there are ways to navigate risk and capitalise on opportunities.

“South-east Asia is a region of diversity and contrast. Its countries range in size, economic development and population from among the largest in the world to among the smallest,” Mr Cooper says.

“Even with the assistance of the ASEAN community structure, it is a fragmented legal landscape, with mature legal environments bordering countries that are only beginning to open up to international trade and regulation.

“The trick is to manage the risk while capitalising on the opportunities presented by that diversity,” he says.

Australia is poised to play a significant role in south-east Asia’s further development, Malaysia-based Mr Cooper adds, given its proximity and existing trade and investment relations with member states.

He notes that Australian companies, operators, suppliers and contractors also have much to gain from the “unabated” growth and development in countries such as Thailand, Indonesia, Singapore and Vietnam.

“Recently, the Asian Development Bank forecasted the need for over US$60 billion per year in infrastructure expenditure across south-east Asia. The region’s growth and development, and in particular the demand for infrastructure, presents huge opportunities for Australia.”

Making the most of broad market optimism

Multinational companies operating across all sectors are aware of the importance that ASEAN markets play today and moving into the future. And, despite the obstacles to seamless transacting, there is an appetite for doing business.

A new AustCham ASEAN survey for example, shows optimism among Australian companies operating in the region about business opportunities in the region. Respondents to the survey reported that about 62 per cent of businesses expanded in the last 18 months, while 6 per cent scaled back their presence. But the challenges that Ms Green alludes do matter – they are also complicated.

King & Wood Mallesons partner Scott Gardiner says that infrastructure, digital transformation and green sustainability are key opportunity areas in the ASEAN region. He also sees relevant and readily exportable Australian expertise on offer that appeals especially to younger developing ASEAN markets.

“Australia has some tremendous expertise in these areas that can be relevant to ASEAN,” Mr Gardiner says.

“The learnings and expertise that Australia has around digital and also in the regulatory sense could be very useful in the region.”

The KWM partner adds that while there is a clear desire on Australia’s part to assist and encourage more local businesses to venture into the region, corporations looking to operate across borders and potential investors are also looking for Australian-imported expertise. This includes the full gamut of Australian professional services, such as consultant engineers, surveyors, accountants and lawyers.

“There’s a real mutuality of interest. ASEAN has a lot of respect for some of the skills that Australian commerce has, for example development infrastructure, pipelines and projects – the PPP (Public-Private Partnership) model for want of a better term,” Mr Gardiner says.

“The government wants to see Australia bring more of that expertise into ASEAN — it is not just about capital flows, it is also about expertise.”

Institutional bloc building confidence

Experts agree that the need for a regional forum that can unify ASEAN states is apparent, while each country is intensely occupied with its own political populism and nuanced ethnic tensions.

Writing about Australia’s relationship with the bloc, Lowy Institute Research Fellow Aaron Connelly characterised deeper engagement with ASEAN as a useful way to adapt to shifting geopolitics.

Chan Heng Chee, Singapore’s Ambassador-at-Large and Global co-chair Asia Society, participated in an expert panel ahead of the special summit in Sydney, where she explained that ASEAN served as a useful and effective confidence-building mechanism. The 51-year-old institution was critical for geopolitical conflict resolution, the ambassador added, and in fact had a track record for doing so.

“We are not just a talk-fest,” the ambassador insisted, noting current efforts to develop a code of conduct for negotiations with China over the South China Sea.

Artificial islands in contested waters of the sea continue to be developed by Beijing, with claims over portions of the territory made by ASEAN states Brunei, Malaysia and Taiwan.

ANZ’s Ms Green, who also sat on the Asia Society panel, has spent the last five years living and working in the Philippines, Laos and the great Mekong region for the major bank.

Offering a business perspective on the value of ASEAN, she said that appreciated why leaders and business people from developed markets may perceive the ASEAN bloc as ineffective. However, the qualified Australian lawyer also affirmed the value a single standard for best practice brought to the region.

“Ultimately, we want to be doing business with partners that we trust and that we feel confident are applying international standards. And that’s what I see ASEAN doing from a business context,” she said.

Good business and human rights

At a diplomatic level, Australian Prime Minister Malcolm Turnbull received a bruising critique from human rights advocates and NGOs, who questioned what message Australia was sending some of the ASEAN region’s “most abusive leaders” by hosting a special summit that did not engage pressing concerns.

While safety and prosperity were pitched by the Australian government as key objectives of the special summit, Human Rights Watch Australia (HRW) called for serious issues such as the brutal crisis facing Rohingya Muslims in Myanmar and escalating concerns about rule of law in Cambodia to be addressed as part of the formal summit agenda. HRW also appealed for an invitation to be extended to the civil society community to participate in the special summit, just like the business community had been.

Talks between the state leaders in March focused on traditional areas of co-operation such as education, trade liberalisation, economic technical co-operation, defence. Brief references to some human rights concerns were acknowledged after the special summit, with a commitment to talk further about peacekeeping, promotion of gender equality and human rights.

The Law Council of Australia has previously highlighted the importance of business as a mechanism to address human rights, adopting a policy position on the United Nations Guiding Principles on Business and Human Rights, which have been unanimously endorsed by the UN Human Rights Council (of which Australia is now a member).

The guiding principle offers a framework comprising three pillars, which include duties on states and responsibilities among the corporate community to respect human rights. The framework also calls for greater access to judicial and non-judicial remedies by victims of human rights abuses.