“I see a great need of vendor supply chain training providers to run the show effectively. If we want growth, train the relevant person first” — Ayesha Muharram, Chief Internal Auditor and Country Compliance Officer, Glaxo Smith Kline.
Lately it has become a requirement among multinational companies to comply with international anti-corruption laws such as U.S. Foreign Corrupt Practices Act (FCPA), U.K. Bribery Act, Canadian Corruption of Foreign Public Officials Act, Brazilian Clean Companies Act. Under these laws, multinational companies need to take appropriate actions for ensuring clean business — including making sure that all of their suppliers, vendors, and subsidiaries around the world are following the rules.
To help local companies and multinationals working in Pakistan deal with this challenge, CIPE Pakistan initiated a discussion on issues related to supply chain compliance in multinational companies. In collaboration with the Overseas Investors Chamber of Commerce & Industry, CIPE conducted a first focus group meeting of the Value Chain-Unethical Practices project. This first meeting was used to conduct a gap analysis, focusing the capacity building needs and the given standards in Pakistan.
As my colleague Anna Nadgrodkiewicz recently discussed on this blog, corruption is a preeminent threat to developing countries. In Brazil, corruption has been estimated to cost somewhere around $53 billion (approximately 2.3 percent of GDP) in 2013 alone. Because this loss has a corrosive effect on democratic governance and the country’s ability to deliver continued improvement, Brazilians took to the streets in massive protests. As a result the government of Brazil passed the “Clean Companies Act” which began being enforced on January 29.
The new law, like similar legislation in other countries, establishes corporate liability for corrupt practices committed by Brazilian companies as well as foreign companies that have branches or affiliates within the country. Under the act, companies that bribe public officials (foreign or domestic) can be subjected to civil and administrative sanctions including heavy fines, prohibition on receiving state funds, and even dissolution of the firm. The fact that Brazilian president Dilma Rouseff exercised her line-item veto power to make the law more strict than originally drafted seems to signal to the world that Brazil is serious about reining in corruption.
In the wake of the passage of the Clean Companies Act, much talk erupted over the implications for international trade. Since the law closely resembles existing anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and the UK Bribery Act, experts have warned that companies operating in the region can expect Brazilian authorities to cooperate more closely with their counterparts in the US during investigations.
More general discussion has involved the importance of solid compliance programs in multi-national companies (MNCs) if they are to avoid any run-ins with the law. However, such commentary ignores a large audience that should take note of this development: developing countries.
How can you effectively integrate women into value chains? With this question in mind, two representatives from the Mennonite Economic Development Associates (MEDA), an international development association based in Canada, shared their experiences with women’s economic development projects.
The benefits of empowering and integrating women into the economy are widely known. But what exactly must be done to incorporate women into value chains, especially in parts of the world where women face cultural barriers to participating in their economies?
Siemens is a leading supplier of technologies like wind turbines that help its customers reduce their environmental impact. (Photo: Wind Power Monthly)
As companies around the world strive to create sustainable value chains, they are paying increased attention to the operations and management practices of their suppliers, distributors, and partners. A recent joint research project of the American Society for Quality, the Corporate Responsibility Officers Association, and the Institute for Supply Management with Deloitte Consulting LLP took a closer look at what improves the effectiveness of sustainable value chains. The project gathered almost 1,000 responses from sustainable supply chain executives.
The responses measured how much a given management practice can increase an organization’s sustainable value chain effectiveness, as compared to respondents not adopting the practice. Not surprisingly, among the top 10 such management practices, the top five have to do with engagement, organizational culture, and incentives (percentages represent an increase in sustainable value chain effectiveness):