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Zespri International Strengthens Compliance Following Challenges
Technology Category
- Application Infrastructure & Middleware - API Integration & Management
Applicable Industries
- Food & Beverage
Applicable Functions
- Business Operation
Use Cases
- Fraud Detection
- Regulatory Compliance Monitoring
Services
- System Integration
- Training
The Challenge
Zespri International, a New Zealand-based kiwifruit exporter with operations across Europe, Asia, and the Americas, faced severe financial and legal repercussions when one of its importers was found guilty of duty evasion in China. The company's Chinese subsidiary was prosecuted as an accessory to the under-declaration of customs duties by a former importer. This led to an investigation, the imposition of significant fines on Zespri, imprisonment of a Zespri employee, and significant legal fees. Investigations revealed that trust and a lack of understanding were core factors. The incident also resulted in huge costs in terms of time and resources, with employees being interviewed, documents being requested multiple times, ongoing court cases taking employees away from their jobs, and media attention shining an unwanted spotlight on the company.
About The Customer
Zespri International is a relatively small company with a large global footprint. Based in New Zealand, the kiwifruit exporter also has operations spread across Europe, Asia, and the Americas. The company commenced shipments to China in the late 90s, with a model that meant distributors in the market were responsible for clearing the goods through the border, paying the local taxes, and selling the fruits through reliable channels. With largely decentralized operations, each of Zespri’s offshore markets operated with quite a bit of autonomy. The company has around 450 employees.
The Solution
Following its legal troubles in China, Zespri took significant steps towards understanding the global compliance regulations in the areas in which they were operating. One of the key features of its new compliance program was EthicsPoint Incident Management. With localization, translation, and interpretation services for more than 160 languages, EthicsPoint made it easy for Zespri to tailor its hotline to each of its global markets and meet rapidly evolving international privacy and reporting requirements. The anonymous reporting solution is promoted throughout the company on posters in common areas, in Zespri’s code of conduct in its corporate training programs, and in agreements with customers.
Operational Impact
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