Fighting Corruption in the Global Supply Chain

May 30, 2017
Categories: Anti-corruption

“Corruption, broadly defined, is the single greatest obstacle to economic
 and social development around the world.”
-United Nation Global Compact: Fighting Corruption in the Supply Chain-A Guide for
Customers and Suppliers, Second Edition, 2016

Companies today have complex and fragmented third party networks; and corruption can affect every business at every level of the supply chain. In a revised guide developed by the United Nations Global Compact ─ Fighting Corruption in the Supply Chain-A Guide for Customers and Suppliers, Second Edition, 2016 ─ companies can gain insights into best practices for supplier and customer interactions, supplier anti-corruption training, and coordinated joint actions. It is particularly important to tackle corruption with third parties given customers can be held accountable both legally and in the eyes of the public, for the actions of their suppliers.

Corruption can render impacts across an organization. This includes the time devoted by management to address corruption-related issues, legal liability and damage to the organization’s reputation.For both customers and suppliers, the UN Global Compact guide offers resources to:

  • Reduce costs associated with corruption
  • Reduce legal liability and risks to reputation
  • Improve product and service quality
  • Promote stable and long-term customer-supplier relations
  • Promote free and open competition
  • Promote economic development
Additionally, organizations that engage their supply chains in meaningful anti-corruption programs can realize benefits including:
  • Improved product quality
  • Reduced fraud and related costs
  • Enhanced their reputations for honest business
  • Improved the environment for business
  • A more sustainable platform for future growth
 The Guide highlights several areas for action.

Corruption Prevention and Response
The report offers a plethora of practical guidance on corruption prevention and corruption response. This ranges from detailed bullet points on program creation, implementation, maintenance, treatment of infractions as well as scenarios with step-by-step solutions.

Highlights from across the range of sections include:
  • Create an environment where employees feel safe speaking up without fear of retaliation
  • Establish a reputation of zero tolerance for bribers by publicizing anti-corruption efforts
  • Provide specific instructions/training for most at risk employees ─ those making deals, accepting goods, etc.
  • Review payments involving higher risk scenarios
  • Regularly implement an independent internal monitoring function
  • If an event occurs, make an internal record and be prepared to notify relevant external authorities
Supplier Training
When organizations are designing anti-corruption training programs for their suppliers, they should avoid asking for more than the supplier is able to do. Trainings for suppliers can be similar to those used to train a company’s own employees. The report recommends face-to-face trainings, but when this isn’t possible, web based trainings are a good alternative.
Download the Guide here.

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