Sustainability Report 2020

Supply Chain

At OMV Petrom we aim to foster innovation, maximize value contribution, and enable the growth of the supply chain in line with both our Corporate and Sustainability Strategies. We achieve this by applying our sourcing and logistics expertise to ensure that the highest-quality materials and services are provided through our supply chain.

It is of paramount importance to our organization to be fully compliant with all applicable legal requirements, as well as with our internal standards in areas of safety, environmental protection, and human rights when managing our supply chain. To mitigate supply chain risks including forced labour, slavery, human trafficking, and corruption, OMV Petrom imposes the legal requirements and internal rules and standards applicable to OMV Petrom on its suppliers. For this reason, we require the suppliers to fully comply with the content of our Code of Conduct, and to sign it.

 

However, we saw the need to emphasize the importance of adhering to our principles and the business standards (e.g., labour rights) outlined it in the OMV Petrom’s General Conditions of Purchase, which our suppliers must accept it as an integral part of the contractual agreements.

 

Corporate and legal HSSE requirements are communicated to potential suppliers at the tender stage. Exceptionally, in OMV Petrom, Crude transportation partners are subject to an additional assessment against the TMSA (Tanker Management and Self-Assessment) Standard, as OMV Group, the parent company, is a member of the OCIMF (Oil Companies International Marine Forum. OMV Petrom reserves the right to terminate relationships with suppliers if non-compliance with applicable policies is discovered or non-compliance is not addressed promptly. OMV Petrom has a process in place according to the Code of Conduct, aimed at ensuring that parties sanctioned by the EU or international organizations, such as the United Nations, are not accepted as procurement partners.

OMV Petrom Supply Chain Description

Our vision in Procurement, “Create Value”, aims to establish effective operations, improve efficiency, and simplify processes. Procurement Department supports the five focus areas of OMV Petrom Sustainability Strategy 2019-2025 through several activities (e.g., embed HSSE in supplier pre-qualification; mandatory HSSE clauses in the contract; suppliers audits; spend with local suppliers; ESG assessments). However, we saw the need to advance further sustainability in our procurement activities. We have developed a new concept to bring sustainability closer to our core processes in procurement activities (e.g., plan-to-strategy, source-to-contract, supplier relationship, and performance management). Include sustainability in suppliers on boarding, analyse sustainability factors (e.g., the carbon footprint of the goods and services purchased through procurement) when developing procurement strategies are just two examples of initiatives defined in 2020, which will be developed further in 2021. Furthermore, the Procurement Department together with Carbon, Energy & ESG Management department from OMV, have refined the calculation method of carbon emissions for purchased goods and services. We now have more transparency on the carbon emissions generated by our suppliers through a dedicated Power BI report accessible to the entire procurement community. In 2021, we plan to start direct engagement with the high-impact suppliers and set up joint improvement measures that will enable us and our suppliers to decrease carbon footprint.