Especially in countries where corruption is endemic and where partners and business practices are unfamiliar, it is important to identify ethical "red flags" before entering into commitments. Procurement is one of the first areas of businesses to enter new countries and in-depth knowledge of suppliers is therefore vital to success and the company's reputation.

Our new standards for IDD that came into effect on 1 October 2008 facilitate improved access to knowledge about potential suppliers, how their business is conducted and what their values are. It also increases understanding of the business environment StatoilHydro is operating in, so that the company knows what to expect.

With risk to reputation and liability from the actions of business partners becoming an urgent concern, IDD is, in our opinion, one of the most effective tools available. Early risk identification is the key to success in managing integrity risk. The "red flags" are in fact often not red but yellow, warning that something needs to be looked at in more depth or that some action needs to be taken before proceeding.

We have a separate independent staff function to carry out IDD, and, when a risk is deemed significant, cases are referred to the Business Integrity staff for further analysis.

Only a small number of business partners represent an integrity risk, and a simple set of tests can determine whether or not risk exists. The evaluation of high-risk cases needs to be thorough, however, and requires resources. However, given the inherent risks in our operations, integrity due diligence can be one of the best investments a company can make. A good reputation takes years to build, but can be lost in a moment.