A major refinery evaluated different alternatives for supplying crude oil. Among the companies analyzed, the one that offered the best price, quality and level of service was one from the Middle East.

Given these advantages, the refinery decided to contract the supply from this supplier. However, it ignored that it had operations in a country with high levels of terrorism against which some jurisdictions, including the United States, had imposed restrictions on the contracting of goods and services.

As the refinery operated in that country, it had to comply with the contracting restriction with the sanctioned state. However, he decided to waive this ban and, as a result, he had to pay a fine of close to 100 million dollars.

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This case teaches us that even small decisions can bring big changes within organizations, both positive and negative.

It is possible that the fate of this company would have been different if it had been diligent in hiring its suppliers and had taken into account the timely execution of actions for the adequate knowledge of its supply chain, such as:

• Before hiring new suppliers or contractors, their background should be checked against the restrictive list program contracted by the company. To make these inquiries, you can contact the Compliance area by email: compliance @ argos.com.co
• In case of identifying alerts against any of the counterparties, such as negative information in public sources or unfavorable comments in the sector, the situation should be investigated to identify the risks of the relationship in a timely manner.
• Compliance clauses and lawful origin of resources must be included in the contracts or binding documents of clients or suppliers that seek to prevent said counterparts from using the relationship with the company to commit improper acts.

Study this and other ethics and compliance cases and lessons through the annual virtual conduct course, The Power of Your Decision – Season Two, available on your SuccessFactors learning path.