More structured process for supplier pre-qualification and risk assessment

All new suppliers of raw materials, goods and services are subject to pre-qualification based on corporate requirements within environment, health and safety, social responsibility, anti-corruption and compliance with laws and regulations. Risk assessments are done before suppliers are approved. Risk-exposed suppliers are subject to detailed requirements from Elkem. Elkem also requires that suppliers and their sub-contractors follow Elkem’s principles. Elkem is implementing improved database and contract management systems to ensure compliance and governance in these areas.

All contracts entered with suppliers include our Code of Conduct for Business Partners. Contracts include terms and conditions for suppliers, in case of non-compliance cases. Elkem has developed detailed requirements for high risk suppliers and contractors regarding health, safety and environmental standards for operations like mining, transportation, storage and loading, and is actively involved in the promotion and monitoring of safe and decent working conditions. This includes health and safety training and providing correct personal protection equipment for suppliers’ employees when necessary. Age control to prevent child labour and ensure responsible working conditions for young employees is also carried out. Elkem requires suppliers and contractors to engage their employees with written contracts on fair terms, and to give them information about their right to organise and collectively bargain with management where this is legally possible.

To ensure a lean, structured and transparent process, Elkem entered a partnership with Achilles, a global supply chain risk management solution provider, that support existing and new suppliers in keeping their information up-to-date on a web-portal, ensuring widespread visibility to their current qualification status and competencies.

Key suppliers of hardware and services to plant operation and investment projects are required to qualify via Achilles. All suppliers and contractors must answer and document their performance within areas such as health, environment, human rights, social responsibility and compliance with law and regulations. Subject to Elkem requirements, Achilles or their external auditors will conduct supplier audits. If any non-compliance issues occur, the events are registered. Action-lists are made and is followed up by local units and from corporate level in Elkem. Violations of Elkem’s requirements are registered and addressed with verbal or written warnings in addition to requests for improvements when necessary. Repeated violations may lead to requirements for speedy implementation of improvement plans, financial penalties, or termination of contracts with immediate effect.

The system allows Elkem to monitor suppliers’ compliance with Elkem requirements, standards and Code of Conducts. The system also allows Elkem to systematically register supplier and contractor performance to continuously develop suppliers or, if necessary, terminate suppliers that do not meet Elkem requirements. The system has been rolled out since 2018, first in the Nordic countries.