How can you ensure your supply chain is corruption-free?

Identifying and mitigating corruption risks is paramount for a clean supply chain. Begin by assessing potential sources and impacts of corruption. Leverage tools like the Corruption Perceptions Index, Global Corruption Barometer, or TRACE Matrix for a comprehensive evaluation. Factor in country-specific risks, sector vulnerabilities, and activity-related threats. Tailor your assessment to the unique characteristics of your supply chain, considering factors like supplier intricacy, the nature and value of goods or services, regulatory obligations, contractual requirements, and stakeholder expectations. This proactive approach lays the foundation for a corruption-free and resilient supply chain.

Importantísimo contar con herramientas y profesionales expertos en CRM, AML y Compliance que sean líneas de defense frente a posibles casos de corrupción en la cadena de suministros. Por último, apoyarse de expertos externos y realizar auditorías exhaustivas.

1. You cannot 100% assure no corruption in most situations 2. It is different whether you are a national company, an international company, a national government or a subnational government. 3. But i recommend that corruption-prevention, performance management, and efficiency be managed together, as they are related. 4. Most corruption starts early and is imbedded in some way in the system. Start clean and focus on performance to lay the foundation for performance without corruption.

Risks obviously vary with the country, industry, products, ownership structure etc. Focus resources at high-risk subjects where you need a structured and preventive risk-approach. But, also make sure your sourcing team is aware of additional risk factors besides the obvious ones. Some examples of risk factors that should trigger a reaction are, if a supplier: - asks you to make the payment to another company than the actual supplier, - asks you to split payments into different banks, - a middle-man (e.g. agent, lawyer, lobbyist) promises great results but you cannot understand how, - PEPs, or - if you have problems getting info on who is the UBO of the supplier. If there are factors that cannot be explained, avoid the transaction.

The private sector plays a significant role in preventing corruption, and to do that, compliance programs should include third parties. Ensuring that the supply chain also adheres to good practices is essential. For example, a company that hires a third party to obtain permits from corrupt governments, looking the other way and not knowing what was done, becomes complicit in corruption. True commitment to integrity extends throughout the supply chain; therefore, the U.S. Department of Justice (DOJ) requires companies to establish robust third-party compliance programs.

Once you established policies and procedures, you can develop and enforce a comprehensive code of conduct for all your supply chain.

There are multiple types of corruption in a supply chain - financial, product-related (knockoffs), and cybersecurity. From the cybersecurity perspective, establishing policies and procedure on how data if shared, used and transmitted is essential. Privacy laws, for example, will dictate what data is made available to your third parties. In many countries, for example, you need your customer's permission to share personal data. You also need to control where your data is accessed and stored. Your supply chain partner is limited to where they move your data as well. Consult your corporate counsel to ensure contracts clearly state how your corporate data is handled by your partners and theirs.

Establishing a corruption-free supply chain involves a multifaceted approach. After implementing a robust code of conduct, it's imperative to educate all stakeholders, both upstream and downstream, on how to identify corruption and mitigative actions that have been put in place. Rather than just wielding the "stick," I advocate for explaining the "WHY" behind anti-corruption measures, as they might not see certain perspectives or have a more short-term perspective. Next, regular training needs to be done to ensure employees are reminded and how they can play a part in reducing (and eliminating) corruption. Lastly, ongoing monitoring is crucial to identify and address any gaps, ensuring sustained compliance.

In my experience a key aspect of engagement and collaboration in supply chains is supplier audits, using the defined supply chain policies and procedures as audit criteria. This provides 'teeth' to the policy and procedures, demonstrating that they are taken seriously, and that resources are deployed to ensure they are monitored and enforced.

One thing I found helpful was to regularly organize meetings that brought all stakeholders together to discuss challenges and next steps. These were also opportunities to remind all stakeholders of the standards by which they are to conduct their business. They were encouraged to share information anonymously if they either perceived or were victims of corruption.

To promote a corruption-free supply chain, leading by example will demonstrate commitment and confidence in the supply chain. By establishing transparent processes, implementing rigorous anti-corruption policies, conducting regular audits, and fostering a culture of integrity within organization can foster similar behaviour in the supply chain. Encouraging ethical behavior and holding everyone accountable for upholding high standards in the organisation will set benchmarks and inspire supply chain to pursue ethical conduct.

According to security experts, more than two thirds of all data breaches have some supply-chain component. The source of the compromised data might be your direct partner, or it might be their partners further down the supply chain. Depending on your compliance requirements, your contracts should require that your partners meet your compliance mandates. You also should require that their third parties either meet your mandates or your partner takes responsibility to ensure their contributions are vetted to your requirements. Remember too your upstream partners might require you to meet their compliance mandates as well. A comprehensive third-party risk management plan looks both up- and downstream to mitigate risks.

Provide ample resources commensurate to the ambition of the supply chain management program, otherwise any amount of stated third party anti-corruption commitment or lofty website declaration will not be able to meet stakeholder expectations especially when there’s no budget or even a dedicated team doing the work full-time let alone engaging the business owners of the enterprises in the value chain

Ensuring a corruption-free supply chain involves implementing robust governance measures including the following - ? Due Diligence exercise on suppliers to identify any potential risks or conflicts of interest. ? Enforcement of Code of Conduct that outlines ethical behavior and compliance with anti-corruption laws. ? Training of suppliers on ethics. ? Establishing a confidential whistleblower system to encourage reporting of unethical behavior. ? Technology Integration to enhance transparency and traceability in the supply chain. ? Third-Party Verifications to verify compliance and ethical practices within the supply chain. ? Continuous Improvement and review of anti-corruption measures to adapt to changing circumstances.

Give your staff the authority to make a decision and keep their back safe. "Give trust" Reward honest persons, move/rotate responsibility

Corruption can be the cause of some companies downfall. So the issues are to dealt with severity. To avoid the corruption in the purchasing division one can delegate the same responsibility within more than one personnel. In that way the rates can be more transparent and the purchase price will be better.