CREATE.org issued the following press release today to launch our latest whitepaper: Government Procurement: Driving Responsible Business Practices. Download the whitepaper here.
CREATe.org Launches Whitepaper on
Government Procurement Driving Responsible Business Practices
WASHINGTON, D.C., September 25, 2013 – The Center for Responsible Enterprise and Trade (CREATe.org) today released a whitepaper addressing how governments use purchasing power to insist that contractors improve business practices and collaborate with supply chain partners to ensure they adopt programs to prevent corruption and IP theft.
Entitled Government Procurement: Driving Responsible Business Practices, the paper highlights how counterfeiting, piracy and corruption can disrupt and taint government procurement channels and pose significant risks to individuals, companies, governments and societies. For example:
- The EU Commissioner for Home Affairs, Cecilia Malmstrom, recently stated that an estimated €120 billion is lost to corruption in government procurement each year throughout the 27 EU Member States. The anti-corruption group Transparency International has drawn a linkage between this corruption and the European region’s ongoing fiscal crisis.
- Interpol’s secretary-general recently noted that while 40 years of terrorism has killed 65,000 people globally, counterfeit medicines killed 200,000 people in China in one year alone.
- In January 2012, the U.S. Air Force suspended Hong Dark Electronic Trade Company of China and various of its subsidiaries from further government contracting after an investigation revealed that Hong Dark sold more than 80,000 suspect counterfeit electronic parts to Department of Defense contractors and that many of these parts ultimately were installed on military aircraft
The whitepaper also outlines how governments are using new rules to require companies to be more diligent and provides examples that demonstrate the trend of governments to tighten up legal liability, management systems requirements and ongoing review of compliance by contractors and their suppliers. For example:
- Under California procurement law, a state contractor must “certify that it has appropriate systems and controls in place to ensure that State funds will not be used in the performance of this Contract for the acquisition, operation or maintenance of computer software in violation of copyright laws.”
- In December 2011, the European Commission published a proposal to revise the EU Public Procurement Directive that, in addition to reaffirming that government contracts should not be awarded to companies that have been found guilty of corruption or fraud, also would authorize contracting authorities to exclude bidders for violations of competition rules or intellectual property rights.
“Governments spend on average 10-15% of GDP on procurement, at an annual rate of U.S. $4 trillion, and as such, have vast influence on how contractors and millions of suppliers conduct business. The increase in government procurement rules, particularly around anti-corruption, counterfeits and piracy, require new levels of diligence and compliance to mitigate risks,” said Pamela Passman, president and chief executive officer, CREATe.org.
The whitepaper also features best practices that contractors can take to foster compliance with procurement requirements. These include:
(1) Promote transparency in supply chains;
(2) Encourage greater supply chain accountability;
(3) Foster cooperation and information sharing;
(4) Develop ‘risk maps’ to identify high-risk activities by suppliers; and
(5) Encourage close cooperation on responsible supply chain practices.
Please visit www.CREATe.org to download a copy of the full report.
Founded in October 2011, The Center for Responsible Enterprise And Trade (CREATe.org) is a global non-profit organization dedicated to helping companies and their suppliers and business partners reduce counterfeiting, piracy, trade secret theft and corruption. We believe that by improving practices along global supply chains, companies can help drive jobs, growth and innovation – benefiting their own businesses, the global economy, and the communities where they operate. By partnering with governments, academia, non-profits, think tanks and associations, we hope to amplify the work of each.
To achieve our shared goals, we have developed CREATe Leading Practices for IP Protection and CREATe Leading Practices for Anti-Corruption. Our three- step program is available in English, Chinese and Brazilian Portuguese and includes practical, scalable and cost-effective online assessments, independent evaluations, training and other resources designed to benchmark and improve processes for safeguarding IP and preventing corruption.
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Director of Marketing and Communications