We continue to promote our standards and principles throughout the procurement process - when pre-qualifying and selecting suppliers, in contracts and through risk-based monitoring and follow-up.
Statoil expects all partners, including suppliers, to follow our standards or an equivalent set of standards. However, we also recognise that, in many of the countries in which we operate, local suppliers may not yet meet these requirements. In such cases, we endeavour to work with our suppliers to improve their skills and capacity.
Standards related to HSE are promoted through an HSE pre-qualification of our suppliers.
Statoil requires that all suppliers providing services with high HSE risk to our operations in Norway and Denmark initially must be qualified by the Achilles Joint Qualification System and found acceptable by Statoil's final prequalification for the planned purpose. Specific HSE requirements are then included into contracts. These form the basis for HSE follow-up of the supplier's performance during the agreement phase.
Integrity due diligence
These same principles apply globally. Our integrity due diligence procedures are applied prior to contract awards in order to screen all suppliers for material integrity, human rights and reputation risks.
All potential suppliers for contracts worth more than NOK seven million are required to sign Statoil's Supplier Declaration in the pre-qualification phase. This commits our suppliers to respecting human rights, core labour standards and employment conditions, in addition to minimum standards for ethics, anti-corruption and HSE. The declaration also requires signatory suppliers to promote these principles among their own sub-suppliers. The Supplier Declaration is then made part of the contract. Using procurements based on 2011 contracts as a point of departure, 92.7% of the procurements measured by value included this declaration. For the remaining purchases, supplier declarations are common, but not required.
Promoting decent labour standards
We continue to strengthen our supply chain management procedures and improve their effectiveness in promoting decent labour standards and working conditions - as outlined in the core conventions of the International Labour Organization - by focusing on the following:
- Improving the clarity and focus of existing procedures and processes and making our
commitments to international labour standards more precise and operational
- Strengthening follow-up of the Supplier Declaration
- Including labour standards in monitoring and audits
- Raising awareness and knowledge of risks, applicable standards and possible mitigations among senior management and groups with
significant risk exposure
- Increasing attention to national labour laws in the line organisation
- Increasing the focus on labour conditions in existing risk assessment processes in order to identify high-risk parts of the value chains
Procedures further strengthened
We have further strengthened our internal supply chain management procedures by including requirements for handling human rights and labour standard issues in the supply chain in our procurement procedures.
Our integrity due diligence (IDD) procedures, which screen all potential suppliers prior to contract award for material integrity risks and reputation risks, include screening for risks relating to a supplier's conduct regarding human rights and labour standards. We aim to monitor and follow up identified mitigating actions in order to address these risks during the contract management phase.
Follow-up and monitoring
To heighten understanding of issues relating to labour standards in the supply chain and associated risks to our business, specialised training programmes on the implementation and follow-up of the Supplier Declaration are now developed for our procurement staff and company representatives.
We recognise that managing and monitoring compliance with our standards in the supply chain is challenging and complex. We endeavour to follow up and monitor suppliers with whom we have direct contracts. Additional follow up and monitoring of the supply chain is consequently considered, based on our assessment of risks.