CONTENTS INTRODUCTION... 3 PURPOSE... 4 ABOUT ARRIUM... 5 PROCUREMENT PRINCIPLES We will not compromise on Safety... 7

Transcription

1 SUPPLIER HANDBOOK

2 CONTENTS INTRODUCTION... 3 PURPOSE... 4 ABOUT ARRIUM... 5 PROCUREMENT PRINCIPLES... 7 We will not compromise on Safety... 7 We will meet our promise to Customers... 8 Our commitment to our People... 9 Our commitment to Sustainability... 9 Our commitment to Governance Our commitment to Ethical Supplier Relationships Our commitment to Continuous Improvement Our commitment to Technology EXPECTED BEHAVIOUR FROM ARRIUM SUPPLIERS Compliance with Site-Specific Procedures Conflicts of Interest Purchase Documents Innovations and Improvements Using our Brand FREQUENTLY ASKED QUESTIONS ARRIUM REFERENCE DOCUMENTS

3 I NT R OD U CTI O N We are pleased to present the Arrium Supplier Handbook to our current supplier and contractor base and to those who may potentially provide goods and services into our dynamic range of business units. Supplier relationships are critical to any organisation and there are proven benefits to fostering collaborative relationships with our suppliers. We want our supplier and contractor base to support our business units and to help streamline and make more Supplier relationships are critical to any organisation and there are proven benefits to fostering collaborative relationships with our suppliers. effective the processes between our two organisations. Whether you supply forklifts, machine components or information technology services across the entire organisation, we want you to think of Arrium as a collaborative partner, not just a customer to your business. We trust this handbook will give you an insight into how Arrium approaches its procurement activities. P U RP O SE The Arrium Supplier Handbook explains the basics of how procurement works within Arrium. Whether you currently supply goods or services to Arrium sites or are seeking to become a supplier or contractor, this handbook will assist in understanding how procurement works and what we expect of our suppliers and contractors. This handbook covers all aspects of Arrium s Procurement Principles, encompassing safety and sustainability, as well as development initiatives for both our suppliers and employees. Procurement within Arrium seeks to build capability and strong relationships with our suppliers and contractors to deliver best value for all involved. A strong supplier and contractor base assists Arrium in maximising the benefits delivered to our business units and, ultimately, to our local and global customers. By working with our suppliers and contractors in a fair and ethical way, we can focus on providing quality goods and services into Arrium safely and sustainably. Arrium recognises that as the procurement functions evolve at each of our operating sites, so too will the way in which suppliers and contractors interact with Arrium. It is a journey of continuous improvement that results in growth, development and benefits for Arrium, its suppliers and contractors. 3 4

4 AB O U T AR R IUM Arrium Limited is an international diversified mining and materials company with three business segments: Arrium Mining, Arrium Mining Consumables and Arrium Steel. Arrium Mining is a producer and exporter of hematite iron ore through mining operations located in South Australia. The business has mining operations at the Middleback Ranges, as well as a wholly-owned port facility at Whyalla. Additional to this, Arrium Arrium Limited is an international diversified mining and materials company with three business segments: Arrium Mining, Arrium Mining Consumables and Arrium Steel. Mining also supplies iron ore feed to Arrium's integrated steelworks at Whyalla. Arrium Mining Consumables supplies resource companies with a range of key mining consumables, including grinding media and rail wheels. Through its Moly-Cop brand, it is the largest supplier of grinding media in the world with leading market positions in North America, South America and Australasia. 5 Arrium Steel includes both the Steel and Recycling businesses. The Steel business is Australia's only manufacturer of steel long products with steel-making capacity of approximately 2.5 million tonnes per annum. It is also Australia's leading steel distributor and reinforcing steel supplier. The Recycling business has operations focused on the southern and east coasts of Australia, as well as non-ferrous operations in Asia. Vision Our vision is to be a leading mining and materials company which delivers superior returns for our shareholders. We aim to achieve this vision through a portfolio of mining and materials businesses that are diversified across commodities, geographies and markets, and by utilising our unique customer relationships and market positions, capabilities and infrastructure, and investing in opportunities which provide the best return on shareholder funds. Core Values The company has two underpinning core values: Safety we will not compromise on safety Customers we will meet our promise to customer 6

5 P R O CU REM E NT PRINCI PL ES We will not compromise on Safety Safety is a core value of Arrium and, as such, safety underpins all of Arrium s activities. Arrium s Occupational Health and Safety Policy commits us to creating and maintaining a safe, healthy working environment and safety culture within every Arrium business. Safety is a core value of Arrium and, as such, safety underpins all of Arrium s activities. We will consider safety in all procurement decisions. We will meet our promise to Customers Understanding our customers needs is central to effective procurement at Arrium. We look to develop and implement procurement arrangements that balance the needs of our customers, shareholders, suppliers, contractors and local communities. We will consider safety in all procurement decisions. Specifications for goods and services consider relevant Australian Standards, Arrium Codes of Practice and Site Safety Plans. We also assess health and safety when selecting contractors and labour hire employees to work at our sites. In turn, we expect our suppliers and contractors to comply with relevant safety standards and any required inductions on Arrium sites. You should be aware of relevant Safety Principles, Safety Policies, Codes of Practice and site-specific conditions before undertaking any task on an Arrium site. Your procurement representative or site contact will be able to provide this information to you. 7 When making procurement decisions, we consider best-total-value for Arrium. This model moves beyond cost to consider quality, safety and sustainability as core principles of Arrium s procurement activities. This increases the value that Arrium derives from its purchase and helps to build stronger relationships with suppliers, contractors, customers, shareholders and the local community. Quality is factored into Arrium s procurement decisions, by seeking to provide a standard of excellence through the goods and services sourced. We will ensure compliance with applicable statutory, regulatory and quality standards, and we expect our suppliers and contractors to demonstrate an on-going commitment to quality assurance. 8

6 Our commitment to our People Arrium s commitment to fostering a procurement excellence culture is paramount, where procurement employees have the right level of skills necessary to execute and deliver excellence across procurement activities. Our people should be aware, accountable and responsible for their actions and should act fairly and ethically with all suppliers and contractors. Knowledge sharing and knowledge management will allow Arrium to capture and retain intelligence to generate value for Arrium, its suppliers and contractors. Knowledge management will assist with knowledge retention and risk mitigation against change of personnel or loss of knowledge about suppliers, contractors and sourcing activities. Our commitment to Sustainability At Arrium we believe that sustainable development is about meeting the needs of our current generation, without compromising the ability of future generations to meet their own needs. Arrium recognises the importance of a sustainable approach to our operations across the entire value chain, from the extraction of raw materials through to the manufacture of finished steel products and the distribution to our customers. There are five drivers of sustainability at Arrium, which can be found on Arrium s website. We will conduct procurement activities in accordance with these drivers of sustainability and sourcing recommendations will factor in appropriate sustainability considerations. As we integrate the drivers and practices of sustainability into the procurement of goods and services, we will consider: Strategies to use resources efficiently and reduce waste; Selecting goods and services which minimise environmental impacts throughout their lifecycle; and Our commitment to Governance Procurement activities within Arrium are governed by the Code of Conduct, which can be found on Arrium s website. Our activities seek to reduce our exposure to business risks, following appropriate processes and controls to prevent fraudulent practices, and to ensure our suppliers and contractors are treated fairly. All purchases made by Arrium should be represented by a purchase document, and high risk and/or high spend purchases will be covered by written contracts. Arrium s standard payment terms are 62 days from the end of the month. Arrium will only deal with suppliers and contractors who comply with all applicable statutory and regulatory legislation, including trade practices, regulations, rules and orders relating to antitrust and unfair competition. Suppliers and contractors sustainability plans, objectives and targets. Arrium will consider local community impacts and reputational risk when procuring goods and services. Procurement decisions will also consider energy efficiency improvements and green house gas emissions reduction, in line with reduction targets developed by the Arrium sustainability network. 9 10

7 Our commitment to Ethical Supplier Relationships Arrium commits to fair and ethical trade with all suppliers and contractors, and we expect our suppliers and contractors to treat Arrium in the same way. Arrium s ethical behaviour expectations include: Honesty, integrity, probity, diligence, fairness, trust, respect and consistency Identification and avoidance of conflicts of interest No improper use of a person s position Abiding by relevant laws and regulations All procurement activities support free and fair competition, and prohibit bribery in all forms. Procurement activity must not seek to benefit from supplier and contractor practices that may be dishonest, unethical or unsafe, and we will cease dealing with any supplier or contractor found to have acted unethically or illegally. Arrium personnel will not compromise Arrium s standing and reputation by accepting inappropriate gifts or hospitality from existing and potential suppliers and contractors. Arrium encourages its suppliers and contractors to advise of any unfair treatment or unethical behaviour. Such complaints may be reported anonymously to Arrium by calling our FairCall hotline on , ing faircall@kpmg.com.au or by submitting your concern on the website Our commitment to Continuous Improvement Continuous improvement of Arrium s activities and those of our suppliers and contractors delivers benefits to all involved. We measure the performance and success of our suppliers and contractors through relationship management activities and key performance indicators. Our commitment to Technology Emerging e-business technology supports Arrium in maximising the efficiency and effectiveness of our procurement processes. Technology such as electronic RFx, eauctions, ecatalogues, industry electronic marketplaces and electronic invoicing assists in streamlining and minimising the cost of doing business for Arrium and its suppliers and contractors. If monitoring reveals the performance of a supplier or contractor does not meet agreed standards, Arrium will liaise with the supplier or contractor to attempt to resolve the performance issues. If a dispute regarding performance is evident, Arrium encourages prompt action through an appropriate dispute resolution process

8 E X PE CT ED BEHAV I OUR F R OM AR R I UM S SUPP LIERS Compliance with Site-Specific Procedures Each Arrium site is different, with unique hazards and safety concerns to consider. Sitespecific safety procedures have been established to reflect these inherent risks, to protect both Arrium employees and visitors to these sites. This means that qualification and approval to perform work on one site does not equate to approval to enter any Arrium site. To maintain a strong, mutually supportive supply relationship, principles of ethical behaviour must be respected on both sides. Arrium employees cannot accept inappropriate gifts or hospitality, and in the interests of ethical supplier behaviour, such invitations should not be offered to Arrium employees. Purchase Documents Your Arrium procurement representative or site contact will inform you of these requirements prior to commencing work or entering each site. Conflicts of Interest Arrium s Procurement Principles emphasise the commitment to ethical supplier behaviour. To maintain a strong, mutually supportive supply relationship, principles of ethical behaviour must be respected on both sides. If you have a conflict of interest, this must be declared prior to supplying, or, if you are a current supplier or contractor, as soon as the conflict of interest arises. 13 All purchases made by Arrium should have an electronic purchase document to verify the purchase. This may be in the form of an Electronic Purchase Order, Supply Contract, Purchasing Card transaction or other similar document. Without such a document in place, payment for your goods or services may be delayed due to additional administration and governance requirements. Should you receive a request from Arrium to purchase goods or services without a purchase document, it is in your best interest to request such a document from Arrium. 14

9 Innovations and Improvements As part of Arrium s commitment to continuous improvement, Arrium welcomes suggestions for innovation in the goods and services we purchase and use, as well as in the processes through which we engage with our suppliers and contractors. We recognise the mutual benefit received by both Arrium and our suppliers and contractors in finding better ways to purchase goods and services, and seek to deliver and communicate innovations to our business units. Arrium seeks to align itself with similar supply organisations in a reciprocated drive for continuous improvement, which will serve to meet our common goals for the present and the future. Using Our Brand The Arrium name is the most common physical point of contact between our organisation and both internal and external stakeholders. Our name not only represents what we stand for or our implied way of doing things, but the overarching material presence is our platform for driving growth. Therefore, as our organisation and brand evolve, it becomes increasingly important for us to uphold this brand value, which is pivotal to the longevity of our relationships with customers, shareholders, employees and the broader environment in which we operate. The consistent representation of our brand is paramount to the value the Arrium name brings to the business. Arrium has developed the Arrium Brand Guidelines document to provide clear guidelines on how to use Arrium brands consistently, including colours, fonts, textures, signage, livery, product branding and correct use of the Arrium and other trademarked logos and styles. In instances where you are required to reproduce the Arrium brand for the supply of goods to Arrium, the elements of this Brand Guidelines document must be adhered to. The Arrium Brand Guidelines document can be found on Arrium s website

10 FREQUENTLY ASKED QUESTIONS Should I expect to receive a purchase document from Arrium? In most instances, Arrium will issue a purchase document to support a purchase in accordance with our procurement governance requirements. However, the following purchases do not require purchase documents: Rent Utilities Council rates Statutory fees Sponsorships Donations Who should I contact if I have a problem with a purchase document? If you encounter an issue with a purchase document issued to you by Arrium, please contact the Arrium representative who engaged you for the goods &/or services. Such issues may include pricing, volume discrepancies and delivery address clarifications. The Arrium representative s name and contact telephone number can generally be found on the purchase document. What proof of goods delivery &/or services acceptance do Arrium require? For prompt and accurate receipt of goods and services, Arrium requests its suppliers and contractors to issue: Proof of delivery (Goods) Service acceptance form, signed by an Arrium representative (Services) What Certificates of Currency for insurance do I need to provide? Arrium requires Certificates of Currency for all applicable insurances, which are required to provide goods and services to our organisation. These are initially required upon contract execution, then submitted annually thereafter. Without providing updated Certificates of Currency to Arrium, your payments for your goods &/or services may be withheld. 17 What are Arrium s standard payment terms? Arrium s standard payment terms are 62 days from the end of the month. Who do I notify if my organisation s details change? Should your organisation details change, please contact Arrium s Accounts Payable team. How will I know if Arrium has a safety issue or concern with a product or service I supply? Arrium regards all safety issues and concerns with the utmost priority, and seeks to work with suppliers that also value safety highly. In the instance where your product or service has resulted in a potential or actual safety incident, your Arrium procurement representative will contact you with details of the incident. You will be required to investigate the incident and provide written notification to Arrium of the corrective actions your organisation has implemented as well as the mitigating controls established to reduce or eliminate the risk. I am seeking to supply goods and services to Arrium. Who can I contact? Arrium welcomes potential suppliers and contractors to contact us with information on goods and services, capabilities and innovations. Please contact us at with a brief outline of your business offerings. ARRIUM REFERENCE DOCUMENTS These documents provide further reference to support the information contained in the Arrium Supplier Handbook. Further information can be found on either the Arrium website or by contacting your procurement representative. Arrium Code of Conduct Arrium Drivers of Sustainability Arrium Occupational Health & Safety Policy Arrium Environment Policy Arrium Procurement Principles Arrium Brand Guidelines 18