Supplier Code of Conduct
Boskalis maintains relationships with around 1,375 suppliers for the central procurement of machinery and hydraulics, electro & survey equipment, wearing and construction parts, and facility goods and consumables. Around 260 of these are regarded as strategic suppliers who account for some 90% of the Corporate Procurement department’s purchasing volume. Over half of the 1,375 suppliers are Dutch companies, 15% are established in other European countries and 30% are based outside Europe. Responsibility for the procurement policy and the selection of suppliers rests with the general manager for Procurement & Logistics, who reports to Group Management.
Boskalis wants to do business with parties who act responsibly and with integrity. We aim to establish long-term relationships. All our buyers conform to the latest NEVI Code of Conduct. In addition to quality, delivery reliability and price, we also take sustainability criteria into account when selecting our suppliers. We are the first in our sector to work with a Supplier Code of Conduct, mirrored on our own Statement of General Business Principles. The Supplier Code of Conduct contains selection criteria in the areas of sustainable procurement including prevention of bribery and corruption, social aspects (including human rights), care for the environment, child labor, working conditions and safety, employees, quality, and conduct towards clients and suppliers.
In 2015 we were able to declare our Supplier Code of Conduct applicable to 68% of our strategic suppliers, based on monetary procurement value. These suppliers have signed our framework contract of which the Code of Conduct forms an integral part. This percentage can fluctuate from year to year. The decline compared to 2014 (75%) is a temporary effect caused by variations in purchasing patterns, plus sharp price falls for heavily weighted product groups such as fuels. By signing the contract our suppliers declare that the Code of Conduct is also applicable to their own suppliers, who are registered accordingly in Boskalis’ systems. The Supplier Code of Conduct and our General Purchasing Terms and Conditions can be downloaded from our corporate website.
Each year an implementation scan is conducted with approximately 10% of our strategic suppliers. This equates to around 20 companies representing a cross-section of our strategic suppliers. An independent external consultant assesses to what extent these suppliers have adopted the Code of Conduct criteria in their own CSR policy. This is done using the Social Responsible Procurement monitoring method of the Chartered Institute of Purchasing and Supply. The procedure comprises:
An onsite implementation scan. These company visits are conducted by the external consultant along with one of our senior procurement staff. This is a two-way process: we are open to feedback from our suppliers, which allows us to learn from them. The aim is to work together to create and develop a sustainable value chain. Our suppliers take a positive view of this approach.
A risk matrix is used to show the level of risk that applies to the various suppliers in terms of CSR and to what extent this might impact Boskalis’ business operations or reputation. We will terminate a relationship with suppliers who are in the segment indicating a significant risk and a significant impact. Suppliers in the segment indicating a high risk and impact are given the chance to improve under our supervision. In the absence of sufficient progress we will also terminate the relationship with these suppliers. The dialog with the other suppliers is structured according to the matrix below.
The implementation scans were first performed in 2012. Over three years the scan was conducted at 60 unique suppliers, based in 10 European countries and in North Africa. In 2015 we primarily visited suppliers outside Europe. This proved considerably more time-consuming than in previous years and as a result in the year under review we visited 10 suppliers around the globe, including Southeast Asia (5), the United States and the Middle East. In 2015 we increased the number of visits paid to second-line suppliers – suppliers who act as subcontractors for our strategic suppliers. For example, we visited a clothing manufacturer in China. The scans covered the following topics: prevention of bribery and corruption, social aspects (including human rights), care for the environment, child labor, working conditions and safety, employees, quality, and conduct towards clients and suppliers. In 2015 we also visited two suppliers in Europe who had achieved a sub-standard score in 2014 and had been rated as having ‘a significant risk with an average impact’ and ‘a high risk with an average impact’, respectively. We started a dialogue with these two companies in 2015 which led to the desired result. Both suppliers showed improvement and we will continue the dialog with them. A supplier visited for the first time in 2015, who was found to be in the ‘high risk with an average impact’ category, will be supported with persuasive communication. Monitoring for compliance with the Code of Conduct by other suppliers where no implementation scan is carried out is done by means of operational observation by our buyers, who have the appropriate training.
Meet the buyer sessions
In 2011 we began with three Meet the Buyer sessions with 15 of our strategic suppliers. The sessions create mutual awareness and understanding and further increase the sustainability of our supply chain through the exchange of ideas and the pooling of innovations. A number of initiatives have been developed successfully (see page 26 of our CSR Report 2014).
In late 2014 we once again organized three Meet the Buyer sessions, with 18 suppliers invited to exchange ideas on the topics of energy reduction, alternative fuels and human rights in the supply chain. These sessions resulted in the statement of the ambition to take the next three years to work with our chain partners on a number of initiatives to further increase the sustainability of the chain. In 2015 we specifically followed up on two initiatives:
ultrafine filtration oil-cleaning system by Lubrafil;
sustainable drop-in biofuel by GoodFuels Marine.
With regard to the ultrafine filtration oil-cleaning system Lubrafil has developed a patented process to filter (biodegradable) hydraulic fluid to 0.1 micron. Under normal circumstances oil attracts moisture which becomes polluted as a result of wear and tear in the system, meaning that the oil has to be replaced more frequently. The new system will considerably extend the lifespan, implying that less oil will be needed and therefore more sparing use of this resource. A pilot project will commence in early 2016, involving thorough testing of the system aboard one of our vessels.
A more detailed account of the development of a drop-in marine biofuel can be found in our theme article on pages 58-59.
A single quality standard for procurement for the Dutch maritime sector
Parties in the maritime sector tend to have their own ways of practicing responsible procurement. The production value in the Dutch sector in 2013 was almost EUR 50 billion, with many products and services imported, also for example from emerging markets. The export value is EUR 21 billion. This means that making the Dutch maritime supply chain more sustainable will have a global impact.
In the spring of 2015, Boskalis launched an initiative in conjunction with the Maritime Cluster of MVO Nederland (CSR Netherlands) aimed at creating a sustainable procurement approach with a single quality standard and/or code of conduct for the Dutch maritime sector. This will create clarity for all parties in terms of expectations with regard to sustainability and process implementation. This will result in cost savings, give small and medium-sized companies access to sustainable methodology, and act as a concrete driver for more sustainable products, services and processes for maritime suppliers around the world. The project involves renown parties from across the maritime sector: shipbuilders, contractors and subcontractors, shipping companies, installers and yards working on behalf of the maritime and offshore industries as well as end customers (such as transshipment companies).