New ICAC supplier due diligence guide to help public sector take good care when doing business

Wednesday 17 June 2020

The NSW Independent Commission Against Corruption (ICAC) has released a new guide today to help the NSW public sector conduct due diligence checks on potential suppliers.

Supplier due diligence: a guide for NSW public sector agencies examines what due diligence is, why, when and how it should be performed, and by whom. It notes that NSW public sector agencies spend billions of dollars of taxpayer money on the procurement of goods and services each year, so it helps to have some reliable information about the people and organisations that supply those goods and services.

The ICAC Chief Commissioner, the Hon Peter Hall QC, said that it is important for due diligence to be at the forefront of the procurement process. “The ICAC has conducted many investigations concerning procurement which have shown that poor due diligence has contributed to corrupt conduct,” Chief Commissioner Hall said. “By getting it right from the start, through conducting appropriate checks, public sector agencies can help prevent their organisations from being subject to corrupt behaviour.

“I commend the guidance in this publication, not only for the public sector, but also for potential suppliers,” Chief Commissioner Hall said. “It can help them understand the information they might need to provide should they wish to be engaged by government agencies, and to build a reputation as being competent, ethical and reliable.”

The guide notes that supplier due diligence is important for ensuring value for money, preventing corrupt conduct, maintaining trust in public administration, and complying with legal and regulatory expectations. It advises that checks may need to occur further along the supply chain should it extend into countries where practices such as forced labour or trafficking in children are common.

The guide focuses on five categories of checks for agencies to consider based on the questions of whether the supplier is genuine, capable and reliable, financially viable, of good repute and integrity, and also whether they have the required authorities, licences and status. It explores sources for conducting checks, and examines what to look for.

Although the guide is for the NSW public sector, and is recommended to be adapted to agencies’ needs, it also may be helpful for other jurisdictions as well. While it is aimed at enhancing procurement practices, it can also be adapted for use in activities such as recruitment, grant allocation and acquittal, and sponsorship arrangements. The guide can be accessed from the ICAC website at www.icac.nsw.gov.au.

Supplier due diligence: a guide for NSW public sector agencies