Corruption involves the misuse of entrusted personal, public or organisational power for private gain. Corruption is manifested in many forms, and one of them is bribery. Others include e.g. blackmailing, favouring, embezzlement, and money-laundering.
Bribery means offering or accepting money or other financial benefits, when the aim is to get the receiver to misuse their authority or status. A bribe can be any financial benefit or a benefit with financial value such as a gift, service, task, position, or access.
UPM complies with all effective anti-corruption and -bribery laws and regulations, but even though the company’s own actions are strongly transparent, its operations and stakeholder cooperation are not immune to corruption.
"One key manifestation of corruption is selecting suppliers based on interests that differ from the company’s interest. For example, services may be bought from relatives, acquaintances, childhood friends or golf friends. The benefit achieved may not be monetary. It can also be individual social networking," says Arto Tenhula, Senior Vice President of Internal Audit, UPM.
Corruption is most often caused by three reasons
According to Arto Tenhula, the three most common reasons for corruption are motivation, chance and lack of control.
"Motivation means that a person may grant him- or herself the justification to do wrong. They may think they deserve the bribe, since taking bribes is the norm, not the exception, in the country."
Bribery often starts on a very small scale. If there is no control, the number of bribes may increase and corruption may continue to spiral. Statistically, corruption occurs more often in certain countries than in others. If a person’s income does not cover their expenses, it is hard to get rid of taking bribes. Problems may also be caused by a cultural pressure for corruption or situations in which a person’s income is too small compared to his/her status. The problem is structural.
But where does the boundary between acceptable behaviour and misconduct lie?
"If a salesperson sponsors a holiday weekend for a customer and his spouse to close a good contract, that is clearly unacceptable. But bribery does not always include money, and sometimes the benefit achieved is financially trivial. Then the question is, what business practice is allowed and how do our practices differ between countries," Tenhula reminds us.
If the company’s benefit is set aside for personal interest, it should always set alarm bells ringing. A rule of thumb for all situations is simple: if a gift is given with the intention of affecting the decision-making of the other party, that gift should not be promised, given or accepted.
Means to control competitive tendering
Competitive tendering is one of the danger zones of corruption. It may be hard to supervise, and documentation does not always ensure that operations in all phases have been carried out correctly.
"Control can be improved by frequently investigating and exchanging the remits of those responsible for sourcing, which prevents too deep relationships between buyers and suppliers. UPM has done this in China, where the corruption perception index is high. There, buyers’ remits are assessed every three years," Arto Tenhula says.
UPM's transparent competition between potential suppliers makes the company’s selection criteria clear to all parties. Thus, everyone has an equal chance to develop their operations and provide a better quotation in order to win a contract.
Global corporations have great responsibilities
Although fighting corruption is hard, global corporations have leverage to battle it. Transparent operations, supplier requirements, their systematic auditing, and – when needed – ending a business relationship are important tools for fighting against corruption.
Cooperation over boundaries is also making the world a better place. UPM is a member of the United Nations’ Global Compact LEAD platform. Global Compact is the world’s largest initiative of voluntary corporate social responsibility, and one of its basic principles is to prevent corruption.
“UPM has set an ambitious target of zero tolerance for corruption and bribery, and this is the way it should be. Major global companies will change the world in this context. If they do not set boundaries in terms of the way people act, the world will never change," Arto Tenhula says.
UPM's Supplier and Third Party Code was renewed at the end of 2016. According to Tenhula, the strong points of the new code are clarity and comprehensible language. The Supplier and Third Party Code makes it very clear how one can or cannot act. Explicit instructions are essential on the way to zero tolerance of the whole value chain.
This article series discusses the renewed UPM Supplier and Third Party Code which defines the minimum level of performance that UPM requires from all of its suppliers and third-party intermediaries concerning responsible business, standards of integrity, ethical practices, and compliance with laws and regulations around the world.