Ethics in Procurement and Supply - Chartered Institute of ...

1 The Global Standard for Procurement and Updated theme 11 Ethics in Procurement and SupplyTheme 11 Ethics in Procurement and Supply UpdateThis formal addendum includes an in-depth update with new content focusing on a number of crucial subject areas within the profession, such as modern slavery , Corporate Social Responsibility (CSR) and Bribery, Corruption and the 2018 annual percentage review of version of the CIPS Global Standard for Procurement and Supply , first published in 2017, we ve decided to publish this addendum. It reflects that a significant update was required to meet this fast moving key area of knowledge, understanding and capability for those working at all competency levels within the profession.

2 Readers should refer to version of the Standard where this addendum should supercede the content within the associated original Theme 11: Ethics in Procurement and O Brien, FCMI, FIoD, Group Professional Development Director, Pillar: People Development StandardsTheme 11: Ethics in Procurement and SupplyThis theme helps individuals to recognise and evaluate the importance of Ethics and responsible Procurement in organisations and Supply chains. Procurement and Supply personnel should promote ethical practices and behaviours with all stakeholders. The theme identifies good practices to achieve commitment by individuals and at an organisational COMPETENCY LEVEL UPDATEDS egment Maintaining ethical and responsible Procurement and supplyKnowledge: Will know and understand:Capabilities: Will be able to:The overall impact of Ethics and responsible Procurement on business successAppreciate the importance of promoting and supporting sound ethical practice, such as.

3 Business continuity impact Reputational impact Financial impact The extended Supply chain Enhancing proficiency and stature of the profession Ensuring compliance with international laws and regulationsThe application of the CIPS Corporate Code of Ethics in Procurement and supplyExplain the key aspects of the CIPS Corporate Code of Ethics that apply to your role within Procurement and supplyThe details included in ethical codes affecting Procurement and Supply Explain the key features of ethical codes that affect Procurement and Supply and how you should identify and address, and when and who you should notify internally of any breaches in ethical business practiceThe use and roles of ethical codes in Procurement and supplyEnsure that you comply with ethical practices when sourcing goods or services for your organisationThe use of documented policies and procedures to ensure ethical and responsible practice throughout the Procurement and Supply process, such as.

4 The responsibilities for Procurement Regulations relating to competition Levels of delegated authority Responsibilities for the stages of the sourcing process Segregation of duties Whistleblowing policy and practice Use of sanctionsMonitor documented policies and procedures used in Procurement and Supply and how they should be used05 The monitoring of ethical and responsible practice amongst internal and external stakeholdersAppreciate the importance of monitoring ethical and responsible practice amongst internal and external stakeholders and the processes required for reporting any suspected breachesThe principles of corporate governance that applies to Procurement and supplyExplain the main principles of corporate governance that applies to the organisation s Procurement and Supply functionThe impact of bribery, corruption and fraud on Procurement and Supply and related issues, such as: Associated legislative frameworks.

5 UK Bribery Act 2010 Reputational impact Risk assessment Due diligence, monitoring and audits Paying and receiving bribes The importance of integrity Types of corruption - political, petty, grand and systematicAppreciate the impact of bribery, corruption and fraud on Procurement and Supply activity and be able to identify and report suspect breaches The concept of Corporate Social Responsibility (CSR) and related issues and drivers, such as: Minimising negative effects of business on local communities Promoting good citizenship Social, economic and cultural diversity The triple bottom line - People/Profit/Planet Extending Procurement and Supply decisions away from just price and qualityRecognise the importance of CSR for the profession and the associated challenges, methods and approaches to address theseSustainability and its importance in Procurement and Supply decision making.

6 Including considering the environmental merits and social impacts of alternative solutionsRecognise the impact of sustainability on the Supply chain and the importance of meeting present need without compromising the ability of future generations to meet their needsModern slavery and the associated considerations for the Procurement and Supply profession, such as: human trafficking Forced and bonded labour Child slavery and marriage Domestic slavery Decent working practices slavery in the Supply chain Legislative frameworks UK modern slavery Act 2015 United Nations Guiding Principles on Business and human Rights (UNGP, 2011)Apply the concept of modern slavery and identify potential impacts on Procurement and Supply activity, recognising when breaches have occurred and the associated reporting OPERATIONAL COMPETENCY LEVEL UPDATEDS egment Developing approaches for ethical and responsible Procurement and supplyKnowledge: Will know and understand:Capabilities: Will be able to.

7 The application of the CIPS Corporate Code of Ethics in Procurement and Supply , such as: Enhancing and protecting the standing of the profession Maintaining the highest standard of integrity in all business relationships Promoting the eradication of unethical business relationships Enhancing the proficiency and stature of the profession Ensuring compliance with laws and regulationsEnsure and encourage full compliance with the CIPS Corporate Code of Ethics across all stages of the Procurement and Supply cycleThe use of codes of Ethics in Procurement and Supply and the reporting of ethical malpracticeDevelop and monitor the processes and procedures adopted by internal and external stakeholders to ensure that ethical and responsible Procurement and Supply principles

8 Are upheld, escalating to senior management any suspected breachesThe development of documented policies and procedures to ensure ethical and responsible practice throughout the Procurement and Supply process, such as: The responsibilities for Procurement Regulations relating to competition Levels of delegated authority Responsibilities for the stages of the sourcing process Segregation of duties Whistleblowing policy and practice Use of sanctionsDevelop, interpret, communicate and monitor documented policies and procedures for Procurement and Supply that should be implemented to ensure ethical practice The potential impact of bribery, corruption and fraud on Procurement and supplyDevelop and monitor processes and procedures to identify and address potential Bribery, Corruption and Fraud in the Supply chainThe potential impact of Corporate Social Responsibility (CSR)

9 On Procurement and supplyAdvise other members of the organisation on the requirements of CSR and develop policy and procedures to ensure CSR compliance : ISO26000:Social ResponsibilityThe requirement for sustainable Procurement and supplyAdvise other members of the organisation on sustainability and develop and monitor processes and procedures to support sustainable Procurement and Supply activity ensuring compliance with ISO20400: Sustainable ProcurementThe potential impact of modern slavery on Procurement and Supply activity Advise other members of the organisation on the potential impact of modern slavery and develop policy and procedures to identify and act on any suspected breaches of associated legislature07 OPERATIONAL COMPETENCY LEVEL UPDATEDS egment Achieving ethical and responsible sourcingKnowledge: Will know and understand:Capabilities: Will be able to:International and industry standards that apply against criminal conductEnsure adherence to international standards that apply against criminal conduct, such as.

10 Bribery, corruption and fraud human rights abuse including modern slavery , child labour and decent working principles Industry schemes, voluntary codes and legislation and escalating any suspected breaches United Nations Guiding Principles on Business and human Rights (UNGP, 2011)The incorporation of practices to support the implementation of ethical/responsible sourcing in Procurement processesEngage with stakeholders to devise specifications, contract terms, KPIs and other instruments to encourage suppliers to prevent, detect and eradicate breaches of ethical standards The use of prequalification and assessment criteria across all tiers of the Supply chain that can be applied to encourage ethical/responsible sourcing in the Procurement processEngage with stakeholders to agree prequalification and assessment criteria that can be applied to encourage ethical/responsible sourcing and undertake a risk based approach to segmenting sub-tiers of the Supply chain to fully assess ethical risksSources of information and databases that examine ethical practicesCarry out research and map Supply chains to assess vulnerabilities and risks in Supply that may result in breaches of ethical standardsThe importance