Managing corruption in supply chains

As supply chains become increasingly complex and globalized, the chance of corruption affecting them increases. In addition to costing businesses and consumers money, corruption can lead to quality and safety issues. These coupled with possible environmental and human rights impacts can cause irreparable harm to a business’ reputation. Managing supply chain corruption in overseas markets is not always easy, and for this reason, we strongly recommend working with a trusted third party inspection company with strict anti-bribery and anti-corruption policies.

Corruption is all around us

Corruption can happen anywhere. A simple look at Transparency International’s Corruption Index demonstrates that many of the world’s leading manufacturing hubs have serious issues in this regard. However, countries in the so-called developed world are not immune either: in 2013 it was found that many frozen hamburger products labelled ‘meat’, ‘pork’, and ‘beef’ in the European Union were actually horse meat, resulting in a 43% decline in frozen hamburger sales in the following months. If nothing else, this scandal demonstrates that corruption can be pervasive and have damaging effects in any market.

Do your homework

Abigail McGregor and JP Wood of Norton Rose Fulbright recommend businesses address supply chain corruption first by having procedures in place to deal with corruption when it arises. This includes the careful selection of suppliers, using strong contractual language, and communicating an explicit commitment to human rights, anti-bribery, and sustainability at the pre-contract stage.

The value of third party inspectors

Implementing anti-corruption policies can be difficult with suppliers in emerging markets. Many of these countries do not have the same rule of law or ethical standards when it comes to transparency, where what is referred to as corruption is often perceived as a cultural norm. For this reason, many businesses find it valuable and necessary to hire third party inspectors to ensure transparency throughout the process. A good third party inspector should have strict anti-corruption policies in place that are in line with your organization’s values, with a zero-tolerance bribery policy serving as a baseline.

About HQTS

With over 25 years of experience in quality assurance, HQTS is ready to help your business build strong, meaningful, and transparent supplier relationships across Asia. Our many service locations are ready to be your one-stop shop for your inspection needs, including  factory audits, production monitoring, pre-shipment and sorting inspections, and everything in between. Ask us today about our strict anti-corruption and anti-bribery policies.