Sustainability in the supply chain

Alberto Manea
Alberto Manea, Supply Chain
Director Romania
Procurement Policy

“Our environmental and social impact is influenced also by the way we manage our supply chain and our infrastructure. We are gradually implementing responsible and sustainable practices in all of these areas by closely working with our suppliers and contractors on aspects like energy efficiency, emissions reductions, cost optimization, waste management, health and safety and responsible business practices. The Romanian business environment is just beginning to move in this direction, our suppliers are starting to realize and understand the benefits and every step forward represents a success for us and for them. “

Procurement Policy

Our procurement policy is based on the following principles:

  • Obtain the best value for the companies in terms of price, quality, goods, services etc;
  • Avoid conflict of interests;
  • Conduct ethically and fairly all business relationships with our suppliers and all other parties;
  • Procurement will be conducted in accordance with all applicable laws, government regulations, transparency and integrity requirements;
  • Conduct business with environmentally and socially responsible Suppliers, in alignment with the overall Sustainable Procurement Strategy of OTE and Deutsche Telekom AG;
  • Procurement has the responsibility to ensure that environmental and social responsibility principles of Deutsche Telekom (according to Code of Conduct, Social Charter and CSR-clause) are known and contractually agreed through general terms and conditions and other project agreements.

Supplier assessment framework

Our supply chain is formed from contractors, licenses, consulting services, companies selling telecommunications equipment and services, companies developing computer hardware / software (IT), licenses usage of content rights, building/facilities managed services, marketing services, HR services, print services, mail services.

We see sustainability in our supply chain as an opportunity for all. We are aware that without the support and collaboration of our suppliers we can’t achieve a sustainable growth but also, as leading telecommunication company in Romania we drive development along our entire supply chain. Thus through a development program, we help strategic suppliers to introduce business practices that are socially and ecologically acceptable and economically efficient. The program is developed around four key components which together ensures that the relationship with suppliers are mutually beneficial, respects social responsibility and environmental sustainability principles and forms our Supplier Assessment Framework.

The advancement of sustainable practices represents a key objective for our procurement management. Since 2014 we implemented the principles of DT Group Procurement Policy.

Supplier Code of Conduct

  • Requires ethical and legally impeccable behaviour;
  • Addresses requirements of integer behaviour for business relationships, for handling information and the avoidance of conflicts of interest;
  • Active and passive corruption, public procurement, trade controls, donations, sponsorship, money laundering, data security and privacy are addressed in detail.

Social Charta

  • Refers to the Declaration of Human Rights, the OECD guidelines, Global Compact and the ILO core labour standards;
  • Includes the topics of human rights, working conditions, prohibition of child labour and forced labour, equal opportunities as well as labour, health and environmental protection.

Corporate responsibility and anti-corruption clause

  • Obliges suppliers to take all measures that are necessary to prevent and sanctimonies active and passive corruption;
  • Contains obligations for our suppliers to improve the environmental performance and to reduce energy use;
  • Includes our Code of Conduct;
  • Provides regulations to review the adherence of them and includes regulations how to handle breaches.

Environmental consideration for supplier assessment procedure

The overall assessments of suppliers consider the establishment and implementation of an Environmental Policy, including procedures, clear targets and improvement programs regarding:

  • Pollution prevention;
  • Resource reduction;
  • Safe utilization, handling, transportation, storing, recycling, re-use and disposal of hazardous substances;
  • Disposal of wastewater and solid waste.

Suppliers’ selectionch3_7

The suppliers are selected on the basis of purchase orders (POs) issued via SAP-ERP systems, within a 12 month period. All the selected suppliers are evaluated by the business units involved and also a self-assessment questionnaire is completed by the Supplier. The selection criteria are based on technical specification, price, commercial terms, contractual issues and CR specific requirements.

The contracts with all suppliers include specific clauses or annexes on health and safety, anti-corruption, security, environment protection, confidentiality and compliance with Telekom Romania Supplier Code of Conduct.

Suppliers’ evaluation

The active suppliers of our companies are evaluated on an annual basis. This process is coordinated by the Process Management and Improvement Division. The suppliers to be evaluated are selected on the basis of purchase orders (POs) issued within a 12 month period. Thus all suppliers with orders worth over €2 million and all suppliers providing crucial supplies (as defined by the OTE Group, i.e. goods and services that have a significant impact on products and services provided to customers) worth more than €500.000, were evaluated. In addition, all suppliers of products/services related to certified management systems of these companies are evaluated (i.e. Management systems according to ISO 9001, ISO 14001, OHSAS 18001, etc.)

In 2014 and 2015, 100% of new suppliers were evaluated based on our environmental, labor practices, human rights and social impact criteria.

Supplier classification and development

The rating of suppliers, performed by the involved business units of our companies, together with the completed suppliers’ self-questionnaires, are posted into the OTE Group’s Supplier Evaluation System, in order to obtain a quantified performance of each supplier. The performance of each supplier on Corporate Responsibility represents 10% of the total score. For the suppliers with a low score, the decision about further actions is taken at the level of OTE Group Management, whether they need to show improvement in their performance or whether their cooperation with the Group is terminated. In the case of international suppliers, the decisions are taken based on DT supplier policy.

Spending on local suppliersch3_8

74% of our total supplier spending in 2015 has been realized with local suppliers  suppliers based in Romania).

Besides Romania, our suppliers are based in Europe, North America and Asia.

 

 

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