We are listing 5 best practices to reduce bribery and corruption risks in supply chain.
Implement a due diligence process
Have a system in place to conduct due diligence on all or select third-parties for bribery and corruption list.
Build a checklist of red-flags that indicate a heightened risk of bribery and corruption in third-parties and educate the compliance team to flag third-parties that show these red flags during the due diligence process.
Implement a continuous monitoring system that conducts routine due diligence checks on strategic suppliers or high risk suppliers.
Identify employees that are highly exposed such as personnel involved in purchasing and bidding processes, sales teams etc for routine training and sensitization.
Establish General Company Anti-Corruption Policies
Implement and enforce a company-wide code of conduct, including a zero tolerance anti-corruption policy. The company should provide specific examples so that employees can learn how to respond to common corruption scenarios through an “anti corruption handbook”.
Establish and promote anonymous reporting mechanisms and encourage reporting of suspected bribery and other unethical business practices by the company and its suppliers/partners.
Identify employees that are highly exposed such as personnel involved in purchasing and bidding processes, sales teams etc for routine training and sensitization.
Implement Specific Policies for Company Representatives Involved in Purchasing and Bidding Processes
Establish clear rules and procedures for selecting a supplier. General selection criteria should include objective requirements on costs, performance, transparency and integrity of the supplier.
Before, during and after the bidding process, prohibit or strictly regulate gifts, entertainment, sponsorship and donation activity.
Implement Audit and Controls
Regularly audit purchasing and bidding processes, vendor qualification process and adherence to policies by internal teams.
Use continuous monitoring to identify higher risk transactions such as a large concentration of orders to the same supplier, large variations in item contract price within the same industry or with contracts prepared by other procurement managers.
Supplier Management and Control Processes
Customers should establish a code of conduct for suppliers, including expectations about corruption. Include provisions about bribery, kickbacks, conflicts of interest, gifts and such other anti-corruption provisions in contracts with suppliers.
Require suppliers to agree in writing to abide by the code of conduct. Ensure that supplier personnel of strategic partners receive yearly training on anti-corruption laws and policies, the consequences of bribery and corruption for the supplier and employees, how to respond to corruption demands and how to report such demands.
