Purchasers warned on ethical oversights

Paul Snell is managing editor at Supply Management
31 May 2006

Procurement is often guilty of "double standards" when encouraging suppliers to behave ethically, an expert has warned.

Simon Webley, research director of the Institute of Business Ethics (IBE), told supplymanagement.com that double standards are common when larger companies expect their suppliers to behave ethically, but don't meet similar standards when dealing with the suppliers themselves.

He repeated concerns that over the past two to three years there has been an increase in "large buyer-small supplier" relationships, where large companies are using their buying power to squeeze small suppliers.

Research published this week in the IBE briefing Procurement and Business Ethics says that procurement often concentrates harder on improving their suppliers' standards than on treating them ethically. There are also worries that a large focus on improving ethical standards with suppliers abroad means fair treatment of local suppliers is often neglected.

The briefing recommends that procurement departments establish "sustainable supplier relationships" with local suppliers, developing long-term agreements that encourage open dialogue between suppliers and clients and make it easier to raise issues when they occur.

There are also recommendations to encourage awareness of best practice across the industry, including:

• More ethical training for procurement staff;

• Deciding how far down the supply chain standards should be implemented;

• And making sure your company contracts for less than 20 per cent of a supplier's work.

Procurement and Business Ethics is available from the IBE at www.ibe.org.uk

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