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  • The best compliance practices in supplier relations

    DATE: 06/05/2019

    Published by: Novonor

     

    In recent years, Odebrecht Group Businesses have focused on implementing and consolidating a structured and effective Compliance System. The supplier relations process is an essential part of this system, generating a positive impact on risk mitigation for the contracting company and helping to streamline the process of managing the suppliers themselves.

     

    Following are a few examples of good practices implemented by our Businesses:

     

    Atvos: support to the development of the sugar and ethanol chain
    One of the commitments undertaken by Atvos is to engage the sugarcane chain in the pursuit of improvements to its social and environmental practices. The company’s Sustainability Guidelines announced in 2015 and its adhesion to the UN Global Compact in 2016 drove the creation of the “Commitment to Sustainability in the Sugarcane Chain” as part of the “Stronger Partners” program. This initiative calls for a profound and structured look into the practices adopted by cane suppliers on issues such as respect for human rights, environmental preservation, anticorruption measures and legal compliance, for example. The process involves local multidisciplinary teams and includes periodic visits and assessments to check suppliers’ compliance with a series of requirements. The Commitment also generated a series of support actions to encourage the development of best practices in the sugar and ethanol sector.  The results are already evident: the average performance of Atvos’ suppliers on the issues mapped increased from 60% in the 2017/18 crop year to 73% in the 2018/19 crop year. A total of 45 companies in four Brazilian states where the company operates currently participate in the program.

     

    Braskem: sustainability in the value chain
    In 2018, Braskem started using a sustainable sourcing tool, which enables a better assessment of social and environmental risks during the technical evaluation of bidding processes. The platform aims to support the diverse procurement areas in including sustainability issues in their decision-making process based on the analysis of information reported by suppliers regarding their management. The pilot project was aided by the Fundação Getulio Vargas (FGV) and rolled out in critical procurement categories in the industrial services and inputs areas with social and environmental impacts. The tool is currently being validated internally and is expected to be available in 2019 for use in procurement categories considered to have high social and environmental impact. Meanwhile, the inclusion of the tool in Coupa, a global Procurement platform to manage contracting, is also being analyzed.

     

    OEC: focus on risk analysis of suppliers
    Since 2017, due diligence has been a key process in contracting suppliers at OEC. Factors defined in the company’s Due Diligence Directive are evaluated carefully in a systematic manner to avoid and mitigate contracting-related risks. The factors considered in the analysis are defined based on the classification of the supplier risk and refer to topics such as performance history, judicial and legal matters, potential conflicts of interest, relations with politically exposed persons and reputation of the company or of its owners or partners. More than 18,000 analyses and due diligence procedures related to supplier registration were conducted in 2018.

    We also talked to Gilberto Couto, Chief Compliance Officer of Ocyan, about the importance of suppliers to maintain an ethical, reputable and transparent environment. Click here to access the interview.

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