Hoping for a new year with less corruption - Supply Management

Hoping for a new year with less corruption

9 December 2010
Today is International Anti-Corruption Day. The UN designated it so seven years ago to raise awareness of sleaze and the role of the United Nations Convention against Corruption in preventing it. It wants all states to sign and ratify the convention as soon as possible. Transparency International said in October that “corruption remains an obstacle to achieving much-needed progress” in the world and there have certainly been high-profile examples of it. In the UK, the MP’s expenses scandal was among them, and it severely affected the UK’s rating on Transparency International’s Corruption Perceptions Index this year. As we reported last year, an increase in incidents was expected because of the global recession. Opportunities to commit fraud and corruption arise when controls are weak and where there is enough pressure - a mortgage to pay, children to feed. At these times in particular, someone will do something they shouldn’t and rationalise it. But there is some good news. This week the Control Risks group said strengthened legislation and more ready enforcement in the UK and US will push corruption risk to the top of business’ concerns for 2011. “Anti-corruption efforts will become the key boardroom agenda point as regulators become ever more vigorous in their pursuit of wrongdoing, armed with stronger legislation in the form of the new UK Bribery Act and the Dodd-Frank Wall Street Reform Act,” it said. It went on to say that the new UK Bribery Act represents “in many ways the toughest enforcement regime in any jurisdiction” and said the Dodd-Frank Wall Street Reform Act “will further strengthen the hand of regulators by providing a financial motivation to would-be whistleblowers of 10 per cent to 30 per cent of monetary penalties worth more than $1 million”. However it warned: “There is much that is ambiguous in the regulation, which frustrates a straightforward legalistic approach to satisfying anti-corruption requirements. Companies operating in complex environments need insight into this knowledge gap to ensure that they are compliant.” Indeed, a reader wrote to SM to say: “There have been increasing reports of corruption globally along the supply chain with few conclusive reports on the cause and the players.” He believes one of the problems is audit teams are not aware of the role of procurement and therefore purchasing is not involved in attempting to prevent or stamp out fraud. In his view, filling the “forensic procurement gap” is the ‘next big thing’ in procurement and supply chain.
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