In 2017 we had approximately 82,000 suppliers situated around the world. Our supply base ranges from multinational raw material and component suppliers to small, local service providers. Regardless of the type of supplier, we believe it is essential to partner with those who embrace our sustainability standards (outlined in the Sandvik Supplier Code of Conduct).
Sandvik procurement policy
During the year, we adopted a group-wide procurement policy that fully integrates our sustainability commitments into the procurement processes. The new policy sets the rules for procurement operations so that they contribute to the economic development of the Group, protect and create business value, reduce environmental footprint and negative social impact of our supply base, and prevent bribery and corruption.
Supplier sustainability program
Our Supplier Sustainability Program focuses on three areas: Creating supplier commitment, building capacity and monitoring high-risk suppliers through audits.
Creating supplier commitment
All suppliers are required to accept Sandvik’s Supplier Code of Conduct.
We continued our capacity-building activities across the Sandvik organization in order to improve competence and increase awareness on the topic of sustainable supplier management. In 2017, 76 purchasers and related functions attended training sessions focused on sustainable supplier management and related processes. Additionally, 133 suppliers audited in 2017 received training in the Sandvik Supplier Code of Conduct and our way of working with it.
Monitoring high-risk suppliers
We conducted 134 Supplier Code of Conduct audits in 2017 as follows: 68 in India, 62 in China, and one audit in each of the following countries: Taiwan, South Korea, Singapore and Malaysia. 133 audits were performed on site. We did not identify any cases of child labor in 2017. All cases of forced labor (41) are related to salary deductions as a disciplinary measure, discrimination (4) relates to employment practices, while deviations from competition law (110) and anti-bribery (1) refer to missing policies or training.
133 of the total audits performed during 2017 verified compliance with the conflict minerals section of Sandvik‘s Supplier Code of Conduct and they identified 6 deviations related to missing policy or statement, and 3 related to missing procedures or documentation as proof in a due diligence audit.
The health and safety deviations (592) vary widely from missing fire alarm systems, signage, daily maintenance records, firefighting or evacuation drill, to a lack of relevant policies, fire safety measures or unsafe conditions and risk assessments. Compensation and benefits deviations (152) relate to social insurance not covering all workers, overtime which was not compensated according to law, workers that were not granted legal annual leave and, in a few cases, minimum level wages that were not paid.
During 2017, we carried out a reasonable country of origin enquiry based on the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas to identify smelters/refiners associated with our supply chain.
A large part of the tungsten supply across the organization comes from Sandvik’s own subsidiary Wolfram Bergbau und Hütten (WBH), a conflict-free smelter that has maintained its compliant smelter status since the company successfully completed the Conflict-Free Smelter Program audit in March 2015.