The contents of an ethical purchasing policy

Ethical purchasing.JPGSeveral SmartProcurement World 2010 speakers discussed the high levels of corruption exposed daily throughout the African continent – South Africa itself being the victim of many improper business practises within all sectors of the national economy. It was widely agreed that organisations need to reform their policy and procedure handbooks to ensure that positive steps are taken to reverse this continent-wide trend.

The risk of corrupt practises will be proportionally higher if procurement procedures and systems are weak. Therefore, drafting policy and procedures requires a much more detailed approach to ensure that personal accountability and the transparency of all steps and processes in the procure to pay cycle is achieved.

As such, detailed chapters must deal with:

• Fair and transparent bid and evaluation procedures.
• Simpler tendering and RFQ processes.
• Strict control and counter balance of the authority of individuals.
• Rotation of staff to refresh personnel and counter the likelihood of corrupt relationships being established.
• Rigid contract management systems to oversee the ongoing supplier relationships.
• The development of effective detection measures such as a secure ‘whistle-blowing’ procedure with appropriate reward.

It is also required of Chief Procurement Officers to take personal responsibility for establishing a strict code of ethical purchasing and ensure that all relevant personnel and staff are fully trained in its specifications. This will go a long way to limit the risk of corrupt practises arising.

New and existing suppliers must be thoroughly educated on the required code of ethical conduct and a blacklisting system put in place to deal with any deviations.

Finally, the ethical purchasing code should be incorporated in all standard contracts and service level agreements that govern local, regional and international supply relationships.

Staff writer

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