* Indicators marked with „*” was subject of a assurance engagement by an independent auditor.
[103-1], [103-2], [103-3], [205-1], [205-2]
In the construction industry, the figures in most contracts are very high and they come from various sources of financing (public or private funds); they also involve many entities, which may create favourable conditions for bribery and corruption. To this end crucial risks may be business, legal, financial and reputational ones. To prevent this, a risk map, which includes e.g. information about possible threats of abuses, is updated cyclically. Business risks are monitored closely too.
Correct performance, including potential bribery and corruption, is monitored at 100 % of the construction sites. The report does not disclose tools used in monitoring, considering them confidential. Disclosure of such information, regarding especially the way of conducting analyses, could, according to the Group, contribute to reducing their effectiveness and increasing the risk of unethical conduct. All these activities are monitored in monthly, biweekly or, where necessary, weekly cycles. Apart from that, the Office of Internal Control conducts separate inspections.
Budimex Office of Internal Control has created a manual for Contract Directors/Managers containing production processes facilitating safe and correct performance of contracts in Budimex S.A., on the basis of applicable procedures and instructions. According to the “Final contract settlement” IO-01-01-03 procedure, after each construction project is finished, the personnel of the Office of Internal Control inspected final settlements regarding construction materials purchased and used.
 The list of most important construction contracts signed by Budimex Group companies in 2017 can be found in the Report on Budimex Group operations for 2017, page 11.
[308-1], [308-2], [412-3], [414-1]
For the Budimex Group, the issues related to corruption and bribery are related mainly to ethics in business. In relations with subcontractors, Budimex’s principle of partner-based, long-term relations applies. We realise we are a big partner for a dozen or so thousand of our subcontractors and it is in all the parties’ interest to carry out given work diligently. We have made it our goal to become a general subcontractor, on whom smaller partners can rely also in difficult times, e.g. by making payments promptly, which is quite a challenge in the construction industry. In return, we expect our partners to develop the same approach. After signing a cooperation contract, each external supplier of the Budimex Group is obliged to sign also the following:
“Set of Rules of Procedure for External Suppliers” is the so-called ethical clause and sets out Budimex’s expectations towards sub-suppliers for:
On the other hand, each new business partner undergoes a preliminary assessment on the basis of a qualification questionnaire. The questionnaire consists of a supplier’s declaration of compliance with applicable regulations in such areas as: labour law, OHS and environmental protection. The condition for a supplier’s preliminary qualification is the approval of the declaration. Thus all key suppliers and subcontractors (100%) were subjected to the evaluation (preliminary qualification). On the other hand, a final assessment, where particularly the following are taken into account: quality, timeliness, actual technical resources, OHS, environmental issues and issues related to human rights, including employees’ rights, is conducted towards the end of every project. In this assessment, contract managers may detail all other irregularities and events which in their opinion could have posed a threat or were not conforming to the principles applying to the sub-suppliers. The results of qualifying questionnaires and final assessments are gathered in the Central Database. Only Budimex’s internal auditors, who also assess the sub-suppliers on this basis, have access to these data. In this Central Database, information about suppliers’ offers are also gathered, owing to which it is possible to analyse a given sub-supplier’s history.
On the basis of pre-qualification and final evaluation procedures, subcontractors can be assigned to one of four categories of suppliers:
The company particularly seeks that significant agreements with key business partners, often despite weaker negotiating power of Budimex, are supplemented with a special appendix related to ethical issues – their number was as follows:
2016 – 57% (9 of 16)
2017 – 72% (14 of 19)
% of significant contracts with “Code of Conduct for External Suppliers” (an ethical clause covering also human rights)
The results of preliminary assessments (qualifying questionnaires) and final assessments with sub-suppliers in 2017:
 Pre-qualification is the fist stage of supplier assessment which is made under a preliminary questionnaire. Based on its results, a given entity is either recommended or not for further cooperation with Budimex.
Compared with the previous year, the number of irregularities identified both overall and in individual categories has fallen, except for the category “Environmental Protection”, where the number has remained the same. The suppliers with whom irregularities had been identified were given recommendations in the form of a report as to further actions.