As one of the largest petrochemical companies in the world, SABIC (Saudi Basic Industries Corporation) is committed to excellence in ethics and compliance. While we are headquartered in Saudi Arabia, our manufacturing operations and sales are global, as are our compliance practices.
Our compliance program is on par with that of any major multinational company, and our external engagement with organizations like Ethisphere helps us to raise the compliance bar both within our company and in our larger operating environment. In Saudi Arabia and the Middle East in general, compliance concepts are really beginning to take hold, and as a major company in the region, we take very seriously our role in helping to foster compliance awareness and capacity by elevating our suppliers that demonstrate commitment to corporate ethics and by educating others on how to do the same.
In Saudi Arabia, we are applying lessons learned from our world-class compliance program to build capability throughout our supply chain. We do this both to enhance our own compliance efforts and to demonstrate our responsibility and commitment towards helping Saudi Arabia achieve its 2030 Vision—an ambitious national program that includes turning Saudi Arabia into an investment powerhouse. In alignment with the Vision, SABIC is ensuring that our company is a safe and dependable investment. In this pursuit, our robust supplier screening process, administered in partnership with the supply chain management firm Achilles, promotes risk management and confirms that our suppliers’ practices are compatible with our compliance culture by requiring them to agree to comply with the principles contained in the “SABIC Supplier Code of Conduct.” These efforts help ensure that SABIC’s global supply base protects the health, safety, and human rights of their workers, adheres to environmental standards, and does not engage in bribery or corruption.
When the Saudi Stock Exchange (Tadawul) opened to foreign investment in 2015, SABIC used the opportunity to publicize the business benefits of a strong compliance program. At SABIC headquarters in Riyadh, a joint event was held in May 2016 with the Siemens Integrity Initiative and the Pearl Initiative—the leading independent, not-for-profit organization working across the Gulf Region of the Middle East to influence and improve corporate accountability and transparency.
The Riyadh event was opened by the National Anti-Corruption Commission (“Nazaha”). This was followed by a panel session entitled “Attracting International Customers and Investment through Supply Chain Compliance.” Panelists included Khalid Al-Hussan, CEO of the Saudi Stock Exchange, and Khalid Al-Aseeri, Legal Advisor, Ministry of Economics & Planning, National Transformation Project (Saudi 2030).
During the session, private sector and government participants, including Dr. Hanan Al-Ahmadi, Shura Council (Consultative Assembly of Saudi Arabia), heard perspectives on the imperative for ethical business and why stakeholders—both global and regional—are increasingly requesting evidence of good compliance practices in the Saudi supply chain.
Speaking at the event, Ahmed Al-Shangiti, Vice President, Global Procurement Services, SABIC, said:
“The wealth that comes into Saudi Arabia through the opening of the Tadawul will be directed, at least in part, to those companies that present the lowest business risk. At SABIC, we are reducing risk in the supply chain by requiring our suppliers and vendors to demonstrate that they embrace the same strong compliance culture that our business is built upon. In the future, we will award business to those suppliers and vendors that offer us the best product, lowest price, and strongest compliance practices.”
In addition to the high-level discussion around the business imperative for ethical business in an economy that is rapidly evolving and becoming more open to global investment, SABIC also conducted workshops with suppliers aimed at helping them achieve ethical business goals.
The following day, the bulk of the Riyadh program was repeated specifically for SABIC suppliers in Jubail, a city in Saudi Arabia’s Eastern Province on the Arabian Gulf. It is the host of the largest industrial city in the Middle East. Jubail is also the site of much of SABIC’s manufacturing activity. Accordingly, the majority of SABIC’s suppliers in Saudi Arabia have a presence in Jubail.
As a leading Saudi company, we have a duty to both elevate the most ethical suppliers and educate newcomers so they can implement best practices. Therefore, every supplier who attended our workshop was given an assignment—to take an online anti-bribery training course that SABIC is offering in conjunction with TRACE International.
Regardless of whether the suppliers have established anti-bribery programs or are new to these concepts, they agree with the topics that we are teaching and are grateful that one of their largest customers is reinforcing anti-corruption education and training. Above all, this anti-bribery training helps us to emphasize that strong compliance is a business imperative for SABIC and the Kingdom of Saudi Arabia.
We will continue to seek opportunities to build a common set of beneficial and sustainable business values in Saudi Arabia. We want all of our vendors in our Saudi supply chain, our customers, and other stakeholders to know that SABIC is doing its utmost to ensure that Saudi Arabia is an ethical and reliable place to do business. We are committed to fostering a compliance culture in Saudi Arabia that will attract the type of investment and partnerships that we need to move our company and our country into the future.
More broadly in the region, SABIC participates in the Pearl Initiative. Through our work with Pearl, we are able to share our best practices with other firms in the Gulf, as well as learn from their experiences.
Finally, on a global scale, SABIC participates in anti-corruption activities through the G20/B20 business dialogue and the Partnering Against Corruption Initiative at the World Economic Forum. We also partake in numerous Ethisphere programs, including the Business Ethics Leadership Alliance (BELA). A key initiative in 2017 is the launch of a company-wide integrity assessment in conjunction with Ethisphere. All of SABIC’s global employees received a short questionnaire that will help us gauge the ethical culture of SABIC. Following analysis of the assessment’s results, we will formulate actions to further strengthen our culture of integrity.
As we move forward, our Compliance team will work with SABIC leadership to cultivate an environment that ensures our employees and other stakeholders understand that the purpose of our program is to construct a common set of ideals; it is not just about creating and enforcing rules. We believe that active participation in our compliance efforts is fundamental to the achievement of SABIC’s and Saudi Arabia’s strategic vision.
About the Expert:
Danielle Cannata is Senior Counsel, International Trade with SABIC Legal Affairs. Danielle started her career at the Pentagon, where she worked on the negotiation of bilateral and multilateral defense cooperation and arms control agreements. She then spent seven years in the Washington, DC, office of O’Melveny & Myers. Since joining SABIC in 2008, Danielle’s portfolio has advised the business on trade compliance and strategy. She supports the Corporate Sustainability Department on compliance and ethics issues and works extensively on the company’s supplier due diligence program.
