Untapped power in ethical purchasing, says academic

31 January 2002
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31 January 2002 | Robin Parker

Ethical purchasing decisions hold unrealised power over global business, according to a leading academic.

Dr Steve New, fellow in management studies at the Said Business School at the University of Oxford, said ethical procurement decisions were based on a mixture of rational business sense, corporate ethics and personal morals.

"Corporate purchasing is the most powerful force on the planet," he told a forum organised by the Institute of Public Finance.

Purchasers can influence decisions affecting design, business processes, organisational models and ultimately society itself, New said.

But discussions of socially responsible purchasing too often focus narrowly on the ethical selection of suppliers, he added.

New told delegates that ongoing interaction with suppliers is the most important element in ethical procurement.

"The most powerful tool is setting the agenda of what supplier organisations think is important," he said.

"Suppliers will react to what they feel buyers are most interested in, and sustaining this dialogue doesn't just have an impact on the current supplier, it will also affect all the potential suppliers."

Paul McDermott, a solicitor at public-sector firm Nabarro Nathanson, said the Human Rights Act 1998 (HRA) put an extra onus on public-sector purchasers to act ethically, particularly in outsourced projects.

"Just because a service is outsourced, it does not mean that a public authority gives up its HRA responsibilities," he said.

"While it can sometimes share the blame, it can never say the private sector is totally to blame."

Melinda Johnson, head of policy at CIPS, told the seminar that the institute's guidelines on ethical business practices aim to make purchasers think ethically as a matter of course.

• How to Develop Ethical Purchasing Practices is available on the web at www.cips.org.


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