NCAB Group – Business Ethics in China

26 maaliskuuta 2018

Over the years, corruption has become a low-risk crime in China. It has flourished and became organized, posing a serious threat to governance. It is not only affecting in administration level – it concerns many people trough out the land. The closer people are to the power center, the more opportunities there are for corruption.

China has been famous of corruption for many years already but we are able to see some improvements – things are getting in better direction. In 2012 president Xi Jinping started the anti-corruption campaign. In the past six years hundreds of officials, including also many at ministerial level, have been prosecuted and convicted. This has been a clear message to everyone that corruption will not be tolerated. However, there’s still a close and an unhealthy connection between business and politics. Corruption has definitely become more discreet but hasn’t unfortunately demolished yet. Because of a long history of briberies it’s a challenge to make sure we are doing ethical business in China throughout the supply chain.

NCAB Group has worked with Chinese companies from the 90’s. We have walked a long journey from the first days until today including many improvements for example in our auditing process regarding ethics.

Our sustainability strategy is based on ISO 26000, an international standard for social responsibility that is covering ethical, social and environmental dimensions, with clear priorities for a sustainable business. In our sustainability audit we work according to an audit template with detailed questions related to the different headings in our Code of Conduct. Interviews with people at different levels in the organization, document checks and visits to both factory and dormitory are important parts of the audit. Regarding briberies, we ask and check things like if factory has a procedure in place for addressing employees or agents suspected of making or accepting improper offers of payments or gifts and if they have a system in place for confidential reporting, and dealing with unethical business practices, without fear of reprisals towards the reporter (for example a whistle blower system.)

We see a trend that factories value our in-depth audits as a means for improving their work and attracting customers, and most factories are generous and open with information. However business ethics is one of the areas where it is often hard to go in deep details to find out the real status, especially since it includes finance parts as well. We make sure policies and systems to handle any concerns are in place, but knowing how efficient they are is often difficult. From the follow-ups, we have seen that the factories have made progress in most improvement areas identified during the audits.

To be more efficient in the future we have now one of our employees Jenny Zhang in China dedicated 100 percent of her time to sustainability work, including sustainability auditing and improvements. This will enable us to work on sustainability issues like ethics more proactively and in close dialogue with our factories. “At our audits, she can read original documents, conduct interviews and talk with the factory employees in their language. Compared to auditors who come from outside, a locally-anchored person will, for example, have a different feel for body language. It allows us to work at a completely different level” says Anna Lothsson NCAB’s Strategic Purchasing Manager.

Customer Support & Marketing coordinator, NCAB Group Finland

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