Contractors and suppliers
TOTAL’s activities generate hundreds of thousands of direct and indirect jobs worldwide. The Group’s purchases alone represented approximately €34 billion worldwide in 2014. These constitute environmental, social and societal impact stakes that TOTAL takes into account in the principles, purchasing commitments and sustainable procurement initiatives that characterize its relations with its suppliers.
The Group’s community development policy stresses the fact that commitment to community development must be shared by the Group’s employees, its customers and suppliers, in particular by employing more local personnel and subcontracting more work to local businesses wherever the operating constraints of its activities allow (for example, through training and support programs intended for actors in the local economy). The Group’s societal directive states that purchasing processes must be adapted as required in cases where a community development action plan has been implemented.
In 2012, a map of the CSR risks and opportunities in the Group’s main purchasing categories was created in order to identify the main issues in three areas: ethics and human rights, environmental impact, and the creation of value with local communities. Pilot projects were implemented in certain purchasing categories in order to integrate the monitoring of CSR aspects into the purchasing process through concrete measures (e.g., specific questionnaire focusing on the fundamental procurement principles, writing of suitable contract clauses, good practices guide for purchases from sheltered sectors). This map was updated in 2014 to reflect the main Marketing & Services and Holding purchasing categories.
Monitoring responsible practices among suppliers
In its Code of Conduct, amended in 2014, TOTAL states that it works with its suppliers to ensure the protection of the interests of both parties on the basis of clear, fairly negotiated contractual conditions. This relationship is founded on three key principles: dialogue, professionalism and adherence to commitments.
TOTAL expects its suppliers:
- to adhere to principles equivalent to those in its own Code of Conduct, such as those set out in the “fundamental principles of purchasing”; and
- to agree to being audited, to be particularly attentive to the human rights-related aspects of their standards and procedures, and in particular their employees’ working conditions, and to ensure that their own suppliers and contractors respect equivalent principles.
The Group’s fundamental principles of purchasing, which were formally set out in April 2014, specify the commitments that it expects of its suppliers in the following areas: respect for human rights at work, health protection, assurance of safety and security, preservation of the environment, prevention of corruption, conflicts of interest and fraud, respect for competition law, as well as the promotion of economic and social development. As of April 2014, this document constitutes a Group directive and is applicable to all Group companies. TOTAL’s suppliers must be made aware of the rules it contains by including them, suitably transposed if necessary, into the agreements concluded with these suppliers. These principles are available for consultation by all suppliers in both French and English on the TOTAL website, under the “Suppliers” heading.
Questionnaires focused on environmental and social issues are used to gather more in-depth information from suppliers about their approach to these subjects, either during pre-qualification or as part of an audit. On occasions, supplier relations are also considered from an environmental and societal perspective as part of the ethical assessments of Group subsidiaries and entities undertaken by GoodCorporation (a UK consultancy firm) in all the continents in which the Group is present.
In addition, HSE-related information forums for suppliers are organized at regular intervals, with such events being held in 2013 by the Exploration & Production entities in Russia, Indonesia and Yemen, for example.
The deployment of the anti-corruption policy and the procedure for its application in the purchasing field continued in 2014. To this end, specific questionnaires were sent to a number of suppliers and, in some cases, external audits were carried out. One new initiative launched in 2014 consisted in asking service providers present at Group sites to complete a training module similar to the Group’s own anti-corruption e-learning program.
This was the case, in particular, for the majority of service providers to Group Purchasing, and for more than 60% of the service providers in Exploration & Production. This initiative will be further extended in 2015. At the same time, Marketing & Services has sent CDs of the e-learning program to all relevant Compliance Officers so that they can then pass these on to their suppliers. Consequently, 1,500 CDs were distributed by the Marketing & Services entities in 2013 and a further 900 in 2014. Exploration & Production has also held twentyone presentations designed to promote the Group’s compliance program and these have welcomed over 700 participants from among its suppliers. In June 2014, the International Procurement Office (the Group’s purchasing office in Shanghai, China) organized an anti-corruption day which was attended by approximately 150 people from approximately thirty Chinese suppliers.
In addition, pursuant to Rule 13p-1 of the Securities Exchange Act of 1934, as amended, which implemented certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, TOTAL submits to the SEC since 2014 an annual document relating to certain minerals (deemed “conflict minerals”(1) by the rule) sourced from the Democratic Republic of the Congo or a neighboring country. The document indicates whether TOTAL S.A. or one of its affiliates has, during the preceding calendar year, used any such minerals that are necessary for the operation or production of a manufactured product or is the object of a contract for its manufacture by the Group. Furthermore, the document states whether such minerals were sourced from the Democratic Republic of the Congo or a neighboring country. The main objective of the rule’s obligation to publish this information is to prevent the direct or indirect funding of armed groups in central Africa. For more information, refer to TOTAL’s most recent publication available at http://csr-analysts.total.com/node/565 or http://www.sec.gov/.
Promoting sustainable procurement
An interdisciplinary working group dedicated to the issue of sustainable procurement and representing the various business segments as well as the Purchasing and Sustainable Development Departments has been active since 2011. Its task is to strengthen TOTAL’s policy in this area on the basis of the initiatives introduced in the various business segments. To coordinate the different actions and further extend the implementation of sustainable procurement initiatives, a dedicated position as manager of sustainable procurement has been created within the Group Purchasing Department.
The Group’s buyers take part in international working groups concerned with the question of sustainable procurement. TOTAL is an active member of the IPIECA’s Supply Chain Task Force. TOTAL is also represented in the French delegation to the international group that is considering the forthcoming ISO 20400 standard on Sustainable Procurement and will contribute to its formulation. The aim of the future ISO 20400 standard is to transpose the concept of social responsibility – as defined in ISO 26000 – to purchasing activities. Forty-one countries from every continent, as well as international organizations such as the OECD, the United Nations and the International Labor Organization, are involved in drafting this standard. TOTAL also contributed to the special session on ISO standards and responsible procurement during the Global Forum on Responsible Business Conduct organized by the OECD in June 2014.
In February 2013, the Group Purchasing Committee decided to focus on awareness-raising and training in the field of sustainable procurement, and to develop the integration of sustainable procurement targets in the annual appraisals of buyers (initially central buyers). As a result, seven sustainable procurement training sessions were held in France in 2013, followed by four sessions in 2014, with a total of 112 Group employees receiving training. 50% of buyers responsible for a category at the head offices of the various business segments took part in this training and have been able to apply the corresponding good practices to their categories. To accompany these training events, practical tools were developed and used both before and after the learning phases. These included explanatory factsheets describing the various international instances (principles underpinning the International Labor Organization, for example), country factsheets (indicating relevant areas of local law), internal feedback, methodology sheets (total cost of ownership, lifecycle analyses, eco-labels, etc.) and, in 2014, new factsheets dealing with the environment and occupational health, as well as additional country factsheets. Special emphasis was placed on feedback.
In France, purchases from the disabled or sheltered employment sectors continued to rise with the signature of new contracts. Group purchases from these sectors enabled the achievement of an indirect employment rate of nearly 1%.
TOTAL is a member of the Pas@Pas association and provides its buyers with an online directory that can be used to identify potential suppliers and service providers (from the disabled or sheltered employment sectors) for each geographical area and category.
Acting as a responsible partner in relation with suppliers
In March 2014, TOTAL received the “Responsible supplier relationships” label for its Holding and Marketing & Services activities in France. This label, awarded by the French authorities, recognizes companies that maintain sustainable and balanced relationships with their suppliers. Eligibility for this label is reviewed every year.
The general terms and conditions of purchase, which are available to Group buyers on the intranet in both French and English, were updated in 2014 to ensure a sharper focus on balanced contractual relations.
An interdisciplinary working group dedicated to the issue of payment terms was set up in 2014. It involves the Purchasing and Finance Departments at the French head offices of all the Group’s business segments and has the aim of monitoring payment terms and improving the processing of invoices.
Regarding the support given to French small and medium-size companies, TOTAL is a member of the “Pacte PME” association, which facilitates dealings between these companies and their major accounts, and was positively rated by the association’s Monitoring Committee in 2014. One example is the support the Group gives to the international development of small and medium-size companies, including a number of its own suppliers, through Total Développement Régional. Approximately a hundred such companies were thus able to take advantage of a range of programs in 2014: temporary reception of a Volunteer for International Experience (VIE) to represent them in one of the Group’s subsidiaries, access to a network of contacts consisting of Group employees in overseas subsidiaries, and the organization of joint operations in countries in which the Group is present in order to gain a better understanding of the local economic context.
To contribute toward the development of good practices in business relations, TOTAL has launched an initiative to raise its employees’ awareness of mediation as an alternative method for resolving disputes with suppliers. Each year since 2013, the Group’s Legal Department has organized an annual day to raise awareness of mediation. This day-long event brings together some fifty French and international participants including both legal experts (two thirds) and buyers (one third). It enables them to gain an understanding of mediation and its advantages, in particular in cementing long-term business relations. The event includes practical exercises (in French and English) conducted in the presence of professional mediators and helps improve the conduct of all employees who may find themselves involved in a situation of mediation. A brochure designed to increase awareness of the mediation process is also available to all buyers in both French and English via the intranet.
An e-mail address is available in both French and English on the Group website under the “Suppliers” heading. This can be used to contact TOTAL’s internal mediator. His task is to facilitate relations between the Group and its French and international suppliers. He has also overseen the introduction of actions designed to promote mediation and intended for legal staff and buyers (four sessions in 2013 and 2014). The conduct of these sessions has been entrusted to a firm of lawyers. Finally, the possibility of recourse to mediation is now also mentioned in the updated version of the general terms and conditions of purchase published in March 2014.
(1) Rule 13p-1 defines “conflict minerals” to be as follows (irrespective of their geographical origin): colombite-tantalite (coltan),cassiterite, gold, wolframite, or their derivatives, which are limited to tantalum, tin, and tungsten.