The business case for integrity: The Royal Cargo story

THE Phinma Group, which has a long experience in anti-corruption and pro-integrity, invited me to present the “Royal Cargo Story”—its business case pro-integrity—to its executives. I would like to share “our” story with the readers of BusinessMirror today:

Why did Royal Cargo sign the Integrity Pledge of the Integrity Initiative in 2011?

• We were sick and tired of “playing” in a game that was not built on the foundation of integrity.

• We believed in being suc-cessful in a level ptlaying field
environment, which we were helping  to create and support.

• We wanted to differentiate ourselves from others rather than sell our services only through price leadership.

• We wanted to serve our customers well, with integrity, protecting their interests, too.

• We wanted to grow our company sustainably as a fair, stable and successful employer of our staff and a good partner of our stakeholders.

• Royal Cargo is investing heavily in the region (Asean/Asia), in Europe and the United States. We are fully aware that without a clean record when it comes to integrity, these investments will not flourish. International companies will not deal with partners in the supply chain who don’t have a clean record.

• We felt that going along these objectives makes a lot of good business sense, trusting we will do more business and make more money for our shareholders.

After we signed the integrity pledge, we followed the rules laid down in the pledge:

• We adopted the unified code of conduct;

• Made regular self-assessments using the tool provided by the Integrity Initiative and, therefore, improved our internal controls;

• After self-evaluation, our status was validated by external auditors of the Integrity Initiative;

• The next target is certification; and

• Additionally, we passed the audit of TRACE International for accreditation as a company complying with international ntegrity norms.

All of this would not have been possible, if we had not created the position of the compliance officer to systemize the creation and adoption of policies that are strictly implemented. Of course, the compliance officer reports directly to the board of directors. The Royal Cargo Group Anti-Bribery and Corrupt Practices Policy includes all reasonable steps necessary to assure that no bribery will be committed by its stockholders, directors, managers and employees, as well as by all third parties working with us in our dealings with the government and public officials.

I am glad to say that the reputation we have painstakingly built up as a compliant company with integrity has resulted into much more additional business compared to the business we have lost.

We like the slogan of the Integrity Initiative: Integrity starts with ‘I’ and decided to strictly enforce the ‘I:’

• No tax shields—paying the right taxes to government;

• No bribing of employees of other companies giving favors, business or margins to us at the expense of their employers;

• No “fixing” of incorrect or lacking documentation by paying to public officials;

• Not taking on any flawed business where we know values are understated or goods incorrectly declared to the Bureau of Customs;

• Every employee in Royal Cargo is informed again and again that
“shortcuts” will not be tolerated and will lead to dismissal and this includes “facilitation” payments; and

• Our customers have been informed of these changes. We lost a few but word of mouth appreciation and the upgrading of our logistics capabilities led to a substantial increase in new customers.

Was it easy? No—being anti-cor-ruption and anti-crime, having integrity is tough—wear a helmet!

Michael Raeuber is the group CEO of Royal Cargo Inc. and the vice chairman of the integrity Initiative Inc.

Image credits: Boygointer | Dreamstime.com