Being really clear on procurement “gifts and bribery” – a bottle isn’t OK

There’s an interesting piece on the Supply Management website about the Bribery Act, gifts and so on, with comments from Anthony Woolich, partner at law firm Holman Fenwick Willan, who says -

“What the new Act does is create a no-faults offence for a company of ‘failure to prevent bribery’. This means the business doesn’t need to have done anything wrong, but if it is simply deemed to have failed to prevent bribery, it commits the offence.”

So just not doing bad things is not enough – you have to be seen to take action to prevent bad things happening.  There are then some comments from Anil Alim, procurement and supply chain director at Westbury Street Holdings.  He says he has set up a gift and hospitality log “where every item received by the team is recorded and approved by him”.

I’d like to suggest that he should go back and read our various posts (like this one) and comments on this subject. Because – and I know we keep saying this -  RECORDING SOMETHING DOESN’T MAKE IT RIGHT.

Why should his team be receiving gifts in the first place? Just say no. Here’s some more...

Alim also established a policy at Westbury where all gifts accepted by the company’s purchasing team were raffled to the whole workforce, with the money generated from it going to charity. Overall, though, he believes that procurement can only do so much. “The best thing we can do is to try to make people understand the difference between gifts and bribes,” explains Alim. “Put very simplistically, a bottle of wine might be a genuine ‘thank you’, but a case of wine? Turn it down. You’ve got to apply common sense.”

A bottle of wine may be a genuine “thank you” but read Nigel Robson's excellent piece on the pyschology of the issue to see that it may not be. There is no clear divide between a “genuine thank you” and something designed to influence or reward. And let’s face it (sorry to be blunt), the one bottle thing is a useless piece of guidance.  One bottle of Chateau Lafite 1990?  Value - one thousand pounds. Is that OK?

I can see the manager now, in front of the court. “Your honour, they told me one bottle was acceptable!”

We could also point out that the CIPS code of ethics doesn’t say, “a bottle of wine is OK, a case isn’t”.

I’ve also got issues with the charity idea. What if a member of staff is a supporter or trustee for a favourite charity, and says to suppliers, “if you want our business, I want a gift that we can raffle for my charity. A two-week break in Bali would be nice".

More potential bribery I’m afraid.

Our profession really needs to get its position clear on this stuff. And that means professionals making very clear statements about what is and isn’t acceptable, and not introducing gray areas. Otherwise more will be following Willis and McMillan into troubled areas (see the Supply Management article) .

As David Loseby says in the same piece, “the moment you become compromised, you’ve lost your career, your worth and your value as a professional.” Quite right – so don’t take chances.

Voices (3)

  1. TripleDistilled:

    If my reading is correct the whole give it to charity method is fundamentally flawed anyway. With the offence of “failing to prevent bribery” surely the item/benefit in question should not have been accepted in the first place if there was any doubt. If the item is accepted and is then given to a charity because it has not stood up to internal scrutiny, the original acceptance of the item must be classified not only as “acceptance” but also “Failing the prevent”?

  2. Nigel Robson:

    Nicely put, Peter. Donating the supplier’s gift to a charity, for instance, can be viewed as a means of converting the obligation into a “tradeable commodity” – regardless of how noble the intention, at best, it only superficially clears the transactional debt, at worst, it becomes a means of placing the obligation onto a third party, who will have to give a positive stroke in some form to the middle man for arranging it. I seem to recall that trading debt as a commodity caused a bit of a problem recently…. Now we have the job of ensuring that other parts of our organisations also adopt the same ethical stance and gently decline those offers too!

  3. Spend Management Man:

    What about where the lines become even more blurred?

    For example, a software vendor cannot “thank” a customer with a gift, but he knows that many will bite his hand off to be center-stage in a press release, webinar series on featured in a case study. Some even ask for this profile-raising publicity… “it will help my career”.

    I had a customer who was so conscious of this issue that he even insisted on bringing his own sandwiches to meetings in our offices, but at the same time, we had him in the pages of all the major procurement magazines, web-sites, etc. and this publicity helped him position himself as a “guru” in eProcurement. He bought our software in his next 2 jobs as well before going on to make a very healthy living as an “independent expert” and industry commentator.

    He was even quoted recently talking about this exact same issue from the comfort of his lofty high horse… made me smile.

    Wine, cigars, etc. are pretty blunt instruments when it comes to “influence”… but back-scratching is usually far more subtle than this.

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