The fight against corruption: It’s time to take a stand

Frankfurt, 14.7.2005  „It’s high time that business organizations implement concrete measures against corruption, instead of merely complaining about criminal behavior when the topic is of public interest“, according to Dr. Holger Hildebrandt, Managing Director of the Association Material Management, Purchasing and Logistics (AMMPL) of Frankfurt, Germany. He added that it is nothing new that orders are sometimes generated through bribes.

The scandal about the misappropriation of corporate funds at VW drives it home: „First of all, it is the acting persons who are corrupt, not the organization with its structures“, said Hildebrandt. In this regard, it is of no consequence who initiates the first step towards bribery. It is now up to corporate management to demonstrate that corrupt behavior is inevitably followed by serious consequences, applicable to every member of the organization.

To limit the risk for corporations and individuals, the AMMPL and its member organizations have published, as early as 1996, ethical guidelines containing recommended actions on the subject of contract loyalty, the solution of conflicts of interest by avoiding dependencies as well as confidentiality. In 2004, AMMPL and the Office for Procurement of the Federal Ministry of the Interior presented a guideline for the prevention of corruption in the public sector. In Germany, price fixing accounts for annual damages of approx. 5 billion Euro in public building projects alone, an area which is particularly susceptible to corruption. This corresponds to no less than 2 percent of the total annual procurement volume of public authorities (about 250 billion Euro).

Measures for the prevention of corruption

• Ombudsman as contact for employees/members 
• Quality code for participating contract partners 
• Handbook for the creation of duty regulations 
• Declaration of commitment by suppliers 
• Changed bonus system for greater independence of individuals 
• Job rotation 
• Plausibility checks 
• Four-eyes principle

„Organizations must realize that they not only suffer considerable economical damage to their corporate image through corrupt personnel, but also that, in these cases, they did not obtain the best performances at the best prices“, emphasizes Hildebrandt.