It warned that a significant number of logistics companies appear to have insufficient procedures in place to prevent corruption, which puts themselves and their clients at risk. A third have no published anti-corruption policy or statement and more than half make no statement at all regarding facilitation payments.

Guidance from the Ministry of Justice says: "Top level management commitment to bribery prevention is likely to include communication of the organisation's anti-corruption stance."

The new bribery law makes it easier for prosecutors to bring charges, and demands that businesses be accountable for the activities of all third parties and intermediaries working on their behalf.

Directors of businesses that cannot demonstrate that they have "adequate procedures" to stamp out corruption, in their own organisation and throughout their supply chain, may be liable to unlimited fines and up to 10 years in jail.

Michael Littlechild of GoodCorporation said, "Logistics is one of the most exposed sectors to corrupt activities, with companies in this field often working in some of the world's most ethically challenging environments.

"This is also of concern for global businesses, as most of them will use logistics companies for part of their operation. By failing to demonstrate clearly that proper measures are being taken to eradicate corruption, logistics companies are putting themselves and their clients at risk."

The impact of this is already apparent. In the United States, every prosecution in 2011 under the U.S. Foreign Corrupt Practices Act was related to the corrupt activities of third parties.

Source: British International Freight Association


Keywords: supply chain risk management, supply chain management, 3PL, third party logistics, international trade, logistics & supply chain, corrupt practices in logistics industry