The Global Compact Principles of the UN are legally binding for the member states who have signed up. Is this TRUE?
Correct Answer: C
Reference: LO-3.1; Page 257; The role of the UN and ILO in pursuing improved ESG and Ethical standards
Question 67
Which of the following scenarios best illustrate instances of bribery?
Correct Answer: B
Choice B- 'Commercial organisations' commit an offence if they, or any person associated with them, bribes another person intending to obtain or retain business or a business advantage. The purpose of the expenditure is key, not necessarily the amount or what is being purchased. The extent to which the expenditure is incidental is also a factor. An itemised invoice providing a breakdown of the expense will be useful, along with further enquiries of the supplier. As there is no price breakdown, it is a valid reason to suspect the expense and is a form of bribe. Incorrect answer: Choice A- It is an offence to bribe another person or to be bribed. As per Bribery Act 2010, failing to prevent a bribe being paid to obtain or retain business or a business advantage is an offence. In this situation, the policy regarding acceptance of gifts was ahered to and is not bribery. Choice C- Bribing a foreign official is an offence under the Bribery Act 2010. It is important to determine whether the fee is genuine or not; it should be accompanied with official notices and a receipt for payment. As the official informs it is a "standard processing fee" with documentary eveidence like a money receipt, it is not a case of bribery. Choice D- As the requirement for the buying organisation was to detail environtmetal protection measures for a tender, the buying organisation has the right to reject bidders on this basis. This is not a form of bribery in any way. Reference: LO-1.1; Page 47-48; Issues impacting ethical and sustainable procurement and supply: modern slavery, bribery, corruption, fraud and human rights infringements
Question 68
What types of organisations is the UN Global Compact aimed at?
Correct Answer: C
Comprehensive and Detailed Explanation From Exact Extract of Documents: The UN Global Compact is primarily aimed at businesses. The L5M5 study guide (p.258) clarifies that while NGOs and other organisations can engage, the Compact is designed to encourage corporate responsibility in human rights, labour, environment, and anti-corruption. Since 2003, cities and public sector organisations can also join under different frameworks, but businesses remain the main focus. For procurement, this means suppliers aligned with the UN Global Compact are more likely to demonstrate compliance with global ethical standards. Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.258
Question 69
What are the two ways an item can be labelled as "Fair Trade" by the WFTO? Select TWO
Correct Answer: A,C
Comprehensive and Detailed Explanation From Exact Extract of Documents: The World Fair Trade Organisation (WFTO) recognises Fair Trade items through either the product certification route (A), where only the product is certified, or the integrated supply chain route (C), where the entire supply chain is Fair Trade compliant. The L5M5 study guide (old p.223, new p.300) emphasises that these approaches provide flexibility for businesses while ensuring ethical standards are upheld. Manufacturer route (B) and audit route (D) are not official WFTO pathways. Procurement professionals should understand these routes when sourcing ethically certified goods. Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.300
Question 70
Which of the following is an example where long-term availability of supplies is prioritized over short-term gains?
Correct Answer: C
Choice C- Using a new supplier that is more expensive in the short-term than others in the market, to expand the supply base and to develop capacity in the market is an example of where long-term availability of supplies would be more important than short-term gains. This decision focuses on building relationships and capacity for the future, prioritizing sustainability over immediate cost savings. This is the correct answer. Incorrect answer: It is important to consider the broader concept of supply chain management when weighing up short term commercial benefits vs long term availability. Choice A and B- Lowering quality in every aspect leads to a customer rejects and negative brand publicity. There will be no long term supplies required as customers won't buy the product. Choice D- Variety reduction involves reducing the number of different solutions used to fulfil the same need. When considering developing a procurement strategy for a new category, it is common to find that there is a variety of different standards and solutions employed across an organization to fulfil broadly the same need. The solution is not sustainable. Reference: LO-1.4; Page 114-116; Short term commercial gains and long term availability
