Raw materials used in steel production are SSAB’s strategically most important purchases. They take place from several suppliers from various parts of the world. During the year, important work to coordinate the purchasing process more efficiently was carried out and on introducing principles regarding employee rights and human rights in contracts with suppliers.
Joint purchasing within SSAB EMEA
Through the reorganization of SSAB’s operations implemented in 2010, purchasing within SSAB EMEA is now formally coordinated. Purchasing is divided into several subcategories including raw materials, services, investments and energy. The coordination is a platform for operations analysis and the development of joint processes, training, contract templates and routines. New offers or enquiries templates within SSAB EMEA contain a special section regarding sustainability issues based on the ten principles enshrined in the UN Global Compact. Experience gained from the working group which started in 2009 has been included as a basis, as well as experience from work together with members of the Swedish Coal Institute in 2009.
The purchasing organization has participated in training sessions during the year in order to get education what regards the new provisions included in templates for offers and agreements.
Follow up and monitoring of suppliers
SSAB endeavors to be an involved and knowledgeable purchaser and to have long-term relations with suppliers. During the year, the raw materials purchasing category in particular has focused on expanding contract terms regarding sustainability issues. These also include the right for third party audits to be conducted without advance warning. The purchasing group regularly evaluates the work.
The subsidiaries which have relations with suppliers are responsible for monitoring the suppliers’ compliance with SSAB’s principles.
Traditionally, monitoring has been prioritized in supplier industries or countries which are associated with risks as regards fundamental human rights. This takes place through obtaining and verifying the codes of conduct of certain suppliers, or obtaining certification that they comply with the United Nations’ Declaration on Human Rights. Another method is to verify conditions at factories and plants through site visits.
Guidelines and governance
At the beginning of 2010, SSAB signed up to the UN Global Compact and its principles are applied in work with suppliers. SSAB’s Code of Business Ethics is the most important control document for work with suppliers, and is based on Global Compact’s principles and UN’s Declaration on Human Rights. In contacts with suppliers, SSAB communicates its Code of Business Ethics and encourages the suppliers to comply with it. Respect for fundamental human rights is a criterion when choosing suppliers.
SSAB’s Code of Business Ethics is supplemented by SSAB’s Instructions regarding the Giving and Acceptance of Bribes. The Instructions provide employees with clear information on how SSAB defines bribery and improper benefits, and how employees are expected to act in relation to suppliers, customers and other business partners in order to comply with the prohibition on the giving and acceptance of bribes.