Activities, value chain and other business relationships
Responsible supply chain
- 2-6
- 11.10.9
Significant actual and potential negative impacts in the supply chain and actions taken
ORLEN uses services of over 9 thousand suppliers, while the ORLEN Group has over 25 thousand suppliers.
The responsible business and sustainable development criteria have been incorporated into the procurement management standard. The ORLEN Group only works with trading partners that respect human rights and operate in compliance with the applicable law, ensuring safe and decent conditions of work and employment and adhering to the required standards of ethics. These criteria are set out in the Supplier Code of Conduct, which is mandatorily applied by the ORLEN Group companies in their procurement processes. Each ORLEN Group company subject to the Procurement Policy and Procurement Instruction is obliged to comply with the same requirements as those applicable at ORLEN. All existing and potential suppliers are obliged to know and accept the requirements concerning human rights, compliance with the law, safe and decent working conditions, the highest ethical standards, and care for the natural environment.
Acceptance of the Supplier Code of Conduct by prospective and existing suppliers is a formal precondition for participating in procurement procedures. If a bidder does not accept the Code, their bid will not be considered in the procurement process because the formal criteria are not satisfied. The purpose of the Code is to promote responsibility among the ORLEN Group’s stakeholders and encourage responsible practices among the suppliers. Moreover, every tenderer taking part in procurement procedures must read, understand and accept the ORLEN Group AntiCorruption Policy and the ORLEN Rules for Accepting and Offering Gifts.
In 2023, ORLEN suppliers were required to read and accept the Human Rights Policy at the ORLEN Group.
In 2022, as part of the ORLEN Group’s Procurement Centralisation Project, purchases within agreed categories were centralised at 20 ORLEN Group companies, including;
- A Central Procurement Instruction, applicable to purchases within central categories, was developed and implemented.
- A new cooperation agreement was drafted and signed with each company, including an updated settlement method.
- One common IT system was deployed at all companies for requisitions management (SAP CP).
- A framework for cooperation and responsibility in the procurement process and for agreement drafting and execution was agreed with the respective companies.
The former LOTOS Group and PGNiG Group were not covered by the Procurement Centralisation Project. Acquisition activities were carried out as part of other projects.
- 11.10.8
Percentage of new suppliers that were screened using social criteria
- 11.12.1
Management of material topic: forced labour and modern slavery
- 11.12.2
Operations identified as having significant risk for incidents of forced or compulsory labour, and measures taken to eliminate such incidents
- 11.12.3
Percentage of new suppliers that were screened using social criteria
The ORLEN Group has not identified any activities involving a significant risk of forced or compulsory labour. The ORLEN Group does not accept forced labour, human trafficking and any form of modern slavery, and employees have the right to enter into and terminate their employment relationship at will. More information can be found in the ORLEN Group's Human Rights Protection Policy.
All ORLEN suppliers are obliged to know andaccept the ORLEN Supplier Code of Conduct, the ORLEN Group Anti-Corruption Policy and the ORLEN Rules for Accepting and Offering Gifts.
In an effort to continuously improve procurement processes, the Group works to enhance and ensure greater consistency of vendor selection procedures. We developed a model for vendor selection in procurement category management strategies, and the key suppliers are evaluated on a regular basis as part of the supplier relationship assessment process. The supplier selection and assessment criteria, which are based on best market practices, facilitate mitigation of reputation, financial and process risks, and ensure high quality of cooperation with suppliers
Other measures to improve procurement processes and prevent risks arising from vendors’ actions or outsourcing contracts include: properly executed documentation, checklists in IT systems, completeness and quality of underlying documents, as well as review and assessment of contracts with suppliers in terms of certificates held and security clauses.
Goods and services are procured in accordance with the principles of ethics and the applicable law, with transparency and professionalism maintained throughout the process.
- 11.14.6
Proportion of spending on local suppliers at significant locations of operation
In 2022, goods and services sourced from Płockbased companies accounted for some 10%* of ORLEN’s spending. At key foreign companies of the ORLEN Group: Unipetrol (Litvínov) and ORLEN Lietuva (Mažeikiai), spending on services provided by local suppliers was 1.91% and 0.45%, respectively, of their total expenditure in 2022.
*excluding purchases from suppliers of crude oil and natural gas
- 11.13.1
Management of material topic: freedom of association and collective bargaining
- 11.13.2
Operations and key suppliers in which the rights to freedom of association and collective bargaining may be violated or at risk, and measures taken to support these rights
No activities or key suppliers that may infringe or pose a threat to the right to freedom of association and the right to collective bargaining have been identified.
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ORLEN Group 2022 Integrated Report
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