Paper on Anti-Corruption Policies in Saudi Basic Industries Corporation (SAUDI)

Company Name: [SABIC Company] Riyadh: [Al-Jubail, Saudi Arabia] Manufacturer: [Petrochemicals]

Number of employees: [35000]

Annual gross revenue: [US$ US$5.86 billion and ر.س 22 billion]

Status: [70% government owned, 30% listed on Saudi stock exchange]

  1. Company Description:

SABIC Company was founded in 1976 by the Royal degree and its success has been incredible throughout the years. Today, the company has more than 50 countries with an international labour force of over 35,000 talented staffs. The company is one of the largest manufacturers of petrochemical in the world. As emphasized from the Company’s website (https://www.sabic.com/en/about), SABIC’s business offices and headquarters are situated in Riyadh, Saudi Arabia with key industrial operations in Al-Jubail City on the Arabian Gulf and in Yanbu along the Red Sea. Indeed, the company’s international presence continues to expand expeditiously as emphasized from the website.

The Saudi Arabian government owns 70% of the shares of the company, while the remaining 30% are listed on the Saudi Stock exchange.  The company’s annual net profit in 2018 was ر.س 22 billion (US$5.86 billion. The expansion plans of this company correspond with the creation of an infrastructure of production plants, technology and distribution hubs, offices and warehouse facilities internationally. Furthermore as shown in the website (https://www.sabic.com/en/about) the company’s production, sales, technology and innovation facilities are situated throughout the world and usually governed by four regional headquarters located in the Middle East and Africa, Asia, America and Europe

  1. Description of the Integrity-related practice:

Anti-corruption policies

­            Corruption and bribery are illegal business activities that can hinder economic development and stability. The foundation of SABIC is built on integrity. The growth and expansion of this company international can be attributed performance with integrity. It is the expectation of the company to maintain its operations to the highest degrees of ethical standards, in every business deal and everywhere the company engages in any transactions. Furthermore, the company strives to create and uphold a culture whereby the employees are secure and confortable being aware that all the compliance issues are addressed and no negative consequences for the persons that blow the whistle. The Code offers a cohesive foundation for development and expansion. SABIT Company is committed in ensuring that all of its business transactions are compliant with the stipulated laws, ethics and fair practices.  Indeed, this company has prohibited any of its employees to offer, receive or assist with any form of deception or bribery including facilitating payments. Any gift or form of hospitality should be carried out in a transparent and honest manner that which does not develop an indecorous business advantage. Furthermore, some of the restrictions also apply to the third party agents including the contractors sand consultants that do any business transactions on behalf of the company. Furthermore, the purpose of these regulations is to protect SABIC and avoid any instances that can expose the company to defamation, financial and other forms of implications including imprisonment.

SABIC’s decision of creating anticorruption policy can be attributed to numerous factors. Nevertheless, the main driver for applying the anticorruption policy was triggered by numerous incidents of anticorruption activities that the company engaged in, therefore, compelling SABIC to pledge support.  For example, in 2013, a report evaluating the anti-corruption and reporting practices of over 100 large global companies from various nations ranked SABIC eleven out of one hundred companies. It was indeed the first Middle Eastern Company to have ever attained such a position, an indication that Saudi Companies were effectively fighting corruption. The ranking also illustrated the company’s major interest in establishing and maintaining an anticorruption attitude among the employees.

  1. Policy Development

SABIC Company has a well-established anti-corruption policy intended to prevent any fraudulent activities performed by any of its members as well as the third parties (see below).

In the year 2013, the Vice Chairman and CEO of SABIC Company,  Mohamed Al-Mady,shared strong concerns about the corruption deals and practices that had become prevalent in the corporate world. He, therefore, expressed his unwavering support to the Saudi Arabia and any Saudi Organizations efforts of implementing exemplary anticorruption regulations and best practices. In his remarks, the CEO articulated that corruption thwarts and derails the establishment of sustainable business enterprise and is primary hindrance of economic progress. The purpose of creating anti-corruption policies, as reckoned by the CEO is to combat corruption in Riyadh.

In developing the policy, the first approach starts sharing or rather proposing some effective anticorruption methodologies used by other companies. As alleged by SABIC company, businesses can rely or rather adopt compliance programs used by other companies and use them as models.

The second and most important step is the resources. In this case, resources entail the ability of the company to develop the policy. Indeed, the creation of a policy is not a straightforward process. It requires engaging key personnel and stakeholders. The stakeholders may involve, the employees, government representatives, in particular the legislators, delegates from state-owned organizations and leaders from global companies. As denoted by Saudi Basic Industries Corporation, SABIC is partly public-owned; therefore, the government plays a fundamental role in ensuring that the compliance programs are effective and followed to the latter. Once the policy is created, the company must disseminate or rather share the results with the employees and seek their views and opinion. If there is no objection, the final process involves launching the policies to integrate them with the existing structure of the organization

  1. Process for Embedding the Practice within the Organisation:

The incorporation of the anti-corruption policy developed by the company is a straightforward procedure. As mentioned earlier, the company was prompted by several incidents to develop the anticorruption policy. Furthermore, the media, especially the print media has been on the forefront in fighting corruption activities in the Saudi Companies. Therefore, the policies developed should not conflict with the existing policies. The employees should be informed beforehand about the intention of the company to create anti-corruption policies. It is also fundamental to engage the employees in the formulation of the policies. SABIC values its employees. As such, SABIC used various forms of training mechanisms to educate the employees about the various anticorruption policies. For example, the company organised workshops on quarterly basis to educate and inform employees about the significance of complying with the stipulated anticorruption directives.

The company created an online platform where employees would engage with the executive leadership. The company also organized conferences and meetings to emphasize on the anti-corruption codes. Considering that corruption and bribery are not isolated issues, every employee was involved in the training process. As mentioned earlier, the essence of the training was to inform the employees about the anti-corruption Codes that the company had set in emotion.  Furthermore, the company also developed training materials and content intended to emphasise on the already established Codes of Practice. Indeed, each departmental head was responsible for the employees within his/her leadership and was required to raise red flags to the relevant authorities.

Nevertheless, the implementation process did not occur without several challenges. First, employee’s reluctance to the proposed changes delayed the implementation process. Some of the employees perceived some of the policies as impractical.  For example, the policy illustrated below is rather unclear concerning what entails anything of value.

However, in overcoming this challenge, the company established forums to interpret some of the policies that seemed daunting.

Identification and Reporting of Issues

The different heads of department were endowed with the role of identifying and reporting any form of fraudulent activities to the executive level. They were required to raise a red flat. Other forms of mechanisms used for the identification and reporting of corruption and bribery activities as unveiled by SABIC (n.d) include whistle-blowing system, help desks and hotlines

Enforcement

The executive leadership team, in particular, the CEO is responsible for the enforcement of the anti-corruption practices within the company.  In ensuring that employees comply with the stipulated compliance programs, the company conducts quarterly assessments of all its departments.

Lessons Learned

The case study of SABIC is informative and educative because it addresses a fundamental issue that has become prevalent in the corporate world. Corruption is a major problem that can damage the reputation of a company and even kill its operations. The move by SABIC Company to uphold transparency and accountability should serve as a lesson to companies both locally and internationally. Today, SABIC Company attributes its success to performance with integrity.

 

Work Cited

Saudi Basic Industries Corporation (SABIC). (n.d.) Code of Ethics: Performance with Integrity.

Retrieved from: https://www.sabic.com/assets/en/Images/Code-of-Ethics-2013-English- 10th-   Dec2017_tcm1010-5717.pdf

SABIC. (2018). Our Company. Retrieved from:  https://www.sabic.com/en/about