7. OPERATING ACTIVITY OF THE BUDIMEX GROUP IN 2023, 7.5. Raising standards in the supply chain
7.5. Improvement of standards in the supply chain
[GRI 3-3] [GRI 308-1] [GRI 308-2] [GRI 414-1] [GRI 414-2] [ESRS SMB-3] [ESRS G1-2]]
In connection with the performance of construction processes, the Budimex Group cooperates with a number of suppliers of a variety of goods and services from different sectors of the economy. In accordance with the company’s Integrated Management System procedures, a continuous process of qualification and ongoing evaluation of counterparties is in place, which also takes relevant sustainability aspects into account, that is the responsibility of each entity in observing social and environmental requirements.
The primary purpose of cooperation is to ensure the highest occupational health, safety, quality and environmental standards along with a top degree of operating efficiency, which is why the company prioritizes cooperation with qualified suppliers and subcontractors. Initial evaluation is based on a qualification questionnaire (form PO-04-01-F05 to procedure PO-04-01). Companies interested in cooperation are requested to complete the questionnaire through the system; it is also available for self-completion on our website. Prior to granting the qualification, compliance is verified of the submitted data with public registers (https://podatki.gov.pl, https://aplikacja.ceidg.gov.pl. https://ekrs.ms.gov.pl, https://ec.europa.eu/taxation_customs/vies/#/vat-validation) and private registers (Polish Economic Intelligence, https://www.pwg.info.pl/) along with verification vis-à-vis the Budimex Group’s needs and standards. The following documents are also requested: ISO and AQAP quality certificate(s), ZKP certificate (technical approvals), licenses, authorizations and references. Data from the questionnaires are entered into a database and serve as a primary source of information regarding construction projects when establishing cooperation in a specific area.
A tentatively qualified contractor is any contractor who has declared their compliance with the labor laws and legal requirements for environmental protection applicable in the Republic of Poland.
The bid of any entity responding to the invitation to participate in the procurement process must be consistent with the requirements contained in the list of occupational safety and health, fire safety and environmental protection standards created by the Budimex Group as a supplement to the statutory requirements. The specific manner of fulfillment of each obligation may be agreed upon at the stage of negotiations and selection of the supplier.
The Budimex Group cooperates only with counterparties committed to acting in a responsible manner. In the process of selecting suppliers of materials and services, one of the qualification criteria is the entity’s demonstrated respect for human rights (including labor rights), as governed by the instructions to the procurement procedure (Rules for the qualification and assessment of suppliers of products and services). All of the company’s business partners sign a statement of compliance with the set of rules of conduct for Budimex SA counterparties, while the Budimex Group contractually reserves the right to verify their practices in this area. In accordance with the document, each subcontractor and supplier is required to pursue their business objectives while demonstrating respect for the rule of law, ethical principles and human rights. Integral parts of all contracts signed by the company are the Requirements for occupational safety and health and the Requirements for environmental protection [1]. Cooperation with suppliers in the area of environmental protection at the construction stage is described in more detail in section 4.3.
After the completion of deliveries/services, the supplier’s compliance with human rights is reassessed.
Upon conclusion of the cooperation, the counterparty is evaluated according to the following criteria:
- timely performance,
- quality of the product/service,
- technical potential,
- fulfillment of pricing conditions,
- fulfillment of health and safety conditions (applicable only to subcontractors and suppliers of equipment and transportation services),
- environmental compliance (applicable only to subcontractors and suppliers of equipment and transportation services).
The following aspects are also verified:
- Has the cooperation with the counterparty been affected by any difficulties, and if so, of what kind?
- Have any forms of discrimination occurred during the cooperation with the supplier?
- Have labor rights been respected?
- Is the supplier recommended for future cooperation?
The rating is calculated by the system based on adopted algorithms and a qualification status is assigned:
- R, meaning that the counterparty is recommended (favorable evaluation) – average score of more than 4,
- K, meaning that the counterparty is qualified (favorable rating) – average score from 2.5 to 4 (inclusive),
- O, meaning that the counterparty is rejected (unfavorable evaluation) – average score below 2.5.
The Budimex Group intends to expand its due diligence procedures in the supply chain in pursuit of its strategic sustainability objectives. The Code of conduct for business partners is scheduled to be developed and adopted in 2024.
Additional information relevant to shaping a responsible supply chain is provided in section 5.2.
Table: New suppliers that were screened using environmental criteria
[GRI 308-1]
Table: Negative environmental impacts in the supply chain and actions taken
[GRI 308-2]
Table: New suppliers that were screened using social criteria
[GRI 414-1]
Table: Negative social impacts in the supply chain and actions taken
[GRI 414-2]
[1] A survey for contractors, a catalog of requirements for contractors, and a set of expected policies can be found at: https://www.budimex.pl/pl/kontrahenci.
