It may seem strange that procurement, often viewed as an unexciting part of an enterprise, can find itself embroiled in events and situations that make world headlines. Ethics or lack of them is often at the heart of the discussion. From the deaths of garment factory workers earning pittances to corruption and kickbacks in defence contracts, procurement can be a hotbed of horror stories and scandals. Immoral or illegal practices can include:
- Payments in cash or in kind made to individuals or their friends, family or partners to buy their support for a supplier or a contract negotiation. Bribes can occur before, during or after (kickbacks) award of contract. Recent examples include the alleged attempt by US gun-maker Smith & Wesson to bribe Indonesian police officials.
- Threats made or pressure put on individuals with the same objective as bribery – to gain support for a supplier or contract negotiation. The difference is that whereas bribery aims to motivate individuals with what they can gain, coercion aims to motivate through the fear of what they might suffer or lose.
- Asking for a bribe or similar illicit payment, which may or may not be accompanied by a menace.
- Also known as nepotism, in which individuals give undue preference or negotiating advantage to a supplier who is a friend or part of the same family.
- Illegal sourcing. Suppliers offer goods or services misrepresented or produced illegally or immorally, whether because of materials used (such as the substitution of horsemeat for beef) or the labour conditions in which production takes place (notably in the garment industry). Stolen and black-market supplies are further examples.
- Traffic of influence. The exchange of an award of contract (or support for the award) for a favour or preferential treatment by the other party of another individual or organisation.
Importance of Ethics
- Purchasing staff are representatives of their organization
- Sound ethical conduct for long term relationships and establishment of supplier good will
- Purchasing staff are more exposed to temptations
- Reference that fosters professionalism
- Remind staff of aspects of their work where they may experience conflicts of interest
- Highlight practices which may comprise the professional objectivity and integrity of purchasing staff
Project Managers, in the pursuit of their profession, affect the quality of life for all people in our society. Therefore, it is vital that Project Managers conduct their work in an ethical manner to earn and maintain the confidence of team members, colleagues, employees, clients and the public.
