Zoomlion entered into a Negotiated Resolution Agreement (NRA) with the World Bank on (date) September 24, 2013. What happened next?
The NRA between Zoomlion and the World Bank was a true wake up call for us. We were determined to turn things around and advocate for a new compliance culture across all parts of the group; leaving no entity behind. Acknowledging a longstanding “culture of gifts” in our operating environments which had the potential to be abused or misinterpreted, one of the early actions we implemented was to eliminate that gift giving and deliver a new and clear message. . Our gift policy today is “no gifts”. Today we focus our resources to the company’s corporate social responsibility program.
Can you tell us more about your CSR and how compliance affected that?
Our work on compliance over the past two years has re-energized our commitment to supporting communities that we serve. We e stablished Zoomlion Foundation (zoomlionfoundation.org) an NGO with focus on education and environmental training to youth. Today we make an effort to invest in goodwill activities that will demonstrate our integrity and contribution to a positive influence on the community at large.
How hard was it to make the business case for compliance?
Our shareholders got it. Once debarred by the World Bank, a company will probably suffer as other MDBs and other donors become less or unwilling to have anything to do with its business . Zoomlion board listened. A weak compliance culture is a high risk considering our size and exposure. A “business as usual” approach especially in many environments where we operate is tempting. Often times, companies will ask: who is watching?! For a rapidly growing company like Zoomlion, the smarter choice was to invest in compliance.
It made sense to institute a complete change, endure the initial pressure and adopt a company-wide compliance program. In the end, the facts bore out what we came to know, namely that with a compliance program, we ended up as the winners, as we get more contracts. Without the support from our senior management and our shareholders, we would not have come that far.
What was the nature of the change you introduced?
Change hit the structure of our board, our policies, our messages to staff and our systems. We set up a new oversight mechanism in our main office to monitor and respond to any allegations and in three years provided compliance training to more than 5000 Zoomlion employees, training is ongoing to staff involved in our public-private operations which total 120,000.
Achieving a high compliance standard was complex but the stakes were too high to not make this corporate change. It was important for everyone to understand the need to challenge “unhealthy” business traditions and change some of our policies. Changes within our board meant introducing skillsets that combined business and integrity experiences.
Throughout the process, the one thing I was most proud of is the conviction across the board that a Zoomlion corporate culture built on compliance and transparency serves us better.
Two years later, what do you have to tell other companies about compliance?
One size does not fit all. I would like to see the opportunity given to lawyers and law firms based in Africa to acquire the credentials needed for compliance monitoring. We struggled to find the appropriate skill set capable of striking the appropriate balance between our existing capacity and the standards set by the World Bank Integrity Compliance Office (ICO).
Our compliance program has gone through several iterations and is constantly being adapted to ensure there are no loopholes to be exploitedThe feedback and advice we received from the ICO throughout the process was incredibly helpful and encouraging. Our contracts have increased in volume and scope since our removal from the World Bank’s debarment list. Many of our business partners acknowledged that stepping up our compliance to international standards was critical to doing business with us.
So what are your plans now?
We are currently developing a training course with our consultants to promote support for a higher compliance standard especially among local companies who may want to do the right thing but have no clue where to start.
Our compliance oversight shifted from excel sheet to an effectively managed central monitoring portal based in our main office overseeing every entry made by any of our affiliates in other countries spread across Western Africa. We have developed an in-house auditing capacity and systems that are able to respond to complaints and feedback received on our new hotline.
At times, the process represented a financial challenge but we believed in it. Our compliance experience is still work in progress. A process that is not always easy but we are committed to move it ahead. We have nothing to hide. Zoomlion’s is a success story of sustainable growth, new opportunities and integrity.