Responsible Procurement Ensuring efficient compliance in Challenging Supply Chains Siri Engesæth, CEO (siri@factlines.com) Dagny Nome, Senior CSR Specialist (dagny.nome@factlines.com) 1
short & sweet 2
Key challenges
Nordic laws regulate public purchasing Example from Norway Entered into force Jan.1, 2017 – the relevant paragraph §5 and appendix 5. ”Public purchasers must ensure proper procedures to promote respect for fundamental human rights” • All suppliers must be able to show rutines to uncover potential breaches of human rights regulations, environmental conventions and social, labour conditions as specified in the appendix • All suppliers must have procedures to ensure adherence to the requirements. • All suppliers must be able to provide risk evaluations of relevant products, product- components, services and processes.
In EU – part of the 20/20/20-strategy Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC Text with EEA relevance In force 18.4.2016. - confirming that the principle of equal treatment applies to national procurement procedures and public contracts. By Article 18 the new Directive requires for the first time that: Member States shall take appropriate measures to ensure that in the performance of public contracts economic operators comply with applicable obligations in the fields of environmental, social and labour law established by Union law, national law, collective agreements or by the international environmental, social and labour law provisions listed in Annex X. http://www.edf.org.uk/blog/eu-procurement-directive/
But this isn’t relevant for me, is it?
High risk products according to DIFI Electronics and Exotic fruits • • communications Surgical instruments • Textiles and shoes • Furniture • Building materials • Cut flowers • Coffee, tea and cocoa • Office supplies • Toys and sports • equipment
City of Oslo requires compliance.. ”In order to qualify for the bidding process, the supplier must have a quality assurance system that enables systematic follow-up of ethical requirements throughout the supply chain and can document traceability for the goods included in the contract.
City of Copenhagen, too
Responsible supply chain management Dialogue and Implement Survey improvement Risk management • Establish • Supplier self assessment guidelines (Code of • CSR system Supplier dialogue Conduct) • Country of production Forankre Forankre Forankre • Use of sub suppliers Continous • Implement • Environmental screening improvement internally and with suppliers • Supplier action plan • Overview key risks • Include evaluation • Establish KPIs in prequalification and tenders
Components in Factlines
Code of Conduct
Supplier Self Assessment The self assessment is the foundation for a systematic dialogue with potential and existing suppliers Status on the suppliers work with CSR, including Code of Conduct and management systems follow up and risk evaluation Extent of supply chain (sub suppliers) Suppliers own risk evaluation for violations to labour or human rights, environment and anti-corruption
The suppliers first contact 15
Data starts arriving 16
Process and methodology a) From Code of Conduct to Self-Assessment Questionnaire (SAQ) b) Distribution c) Gathering information d) What does it tell us? e) What can we do about it? f) Circle closed – ready for next round 17
Survey reporting and analysis Individual supplier reports facilitates Full overview shows main risks and dialogue and improvement areas for action 18
Factlines – the full chain perspective Report once – Supply chain Responsible Information transparency accepted furnished and procurement, because better updated by the everywhere: no knowledge means source more audit fatigue better decisions 19
Documentation for bid-processes 20
Case Norwegian Hospitality Association NHO Reiseliv Innkjøpskjeden
NHO Reiseliv NHO Travel Association Procurement 140 suppliers 2 700 members Procurement via portal (millum.no)
Reference ”By using Factlines tool and services we now have an integrated system to ensure the suppliers we approve for our 2700 members are compliant. The supply chain management is radically easier and more efficient, and it makes it easier to achieve continous improvmeents in the the supply chains.” Morten Karlsen, director of purchasing the Norwegian Hospitality Association 23
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