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Topics on this page:
Safe transportation to our customers
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We evaluate and support partner companies
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Raw materials suppliers checked locally
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Product types and sources important
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Providing advice for better services
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China: sustainability in the value chain
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Minimum social standards for suppliers
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Acting responsibly in our Supply Chain |
How carefully do carriers handle BASF's products? Under what conditions do BASF's technical partner companies work? How safe are our suppliers' products and processes? More and more customers and investors are asking us these questions, and we have a clear answer: What counts for us is acting responsibly throughout the entire supply chain because we want to build stable and sustainable relationships with our business partners. This is why we choose carriers, service providers and suppliers not just on the basis of price, but also include their performance in the fields of environmental and social responsibility when making our decisions.
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Safe transportation to our customers
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We ensure safe transportation together with our partners - for example when filling tanker trucks. |
What our customers expect from our logistics system is easy to sum up: They want the products they have ordered to be delivered punctually and in the correct amount and quality. To achieve this, high safety standards must be observed by the carriers who transport our goods - most of whom are independent. Our comprehensive safety tool is the Safety and Quality Assessment System (SQAS), a standardized assessment system jointly developed by members of the European Chemical Industry Council (CEFIC). We use SQAS reports to identify staff training levels, response times during emergencies, vehicle equipment and whether carriers have security plans in place. Only if we are sure that a transport company meets all requirements do we trust it with our products.
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We evaluate and support partner companies
Much repair, installation and transport work at BASF is carried out by contract companies. Many external companies perform such services for us at our sites. They act as our partners in the search for the best solutions. This is why all BASF companies and joint ventures in which we hold a majority share are committed to assessing and promoting the work of partner firms. Our global guidelines on safety, health and environmental management make no difference between contract workers and BASF employees when it comes to checking compliance with all regulations, carrying out training and assessing its success.
To further promote safety awareness at partner companies, BASF Ludwigshafen's site management introduced a merit-rating system for work carried out by contract companies in 2003. If a contract worker breaches one of BASF's safety regulations, the contract company's agreed bonus will fall by a certain predetermined percentage.
Local measures like this are intended to encourage safety awareness at partner companies, and we now aim to promote these measures more vigorously worldwide.
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Raw materials suppliers checked locally
Raw materials suppliers checked locally Last year, BASF purchased more than 10,000 raw materials worth around EUR 9 billion from approximately 5,000 different suppliers for use at its production sites worldwide. Employees in our Raw Materials Purchasing department have another responsibility: They carry out onsite product and supplier assessments.
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Product types and sources important
All raw materials we purchase are classified into one of three hazard categories according to their environmental, toxicological and safety properties: A (safe), B (harmful) or C (e.g., toxic). For example, sodium chloride, more commonly known as table salt, would be category A. Ethanol, which is the alcohol in alcoholic beverages, is classified as highly flammable, therefore category B. Methanol, a toxic product, would be category C.
Suppliers and potential suppliers are then also classified according to exactly defined criteria. Initially, we look at whether they are located in OECD countries or non-OECD countries. The reason is that, as a first approach, the risk of non-compliance with environmental and safety standards is expected to be higher in non-OECD countries than in OECD countries. A final decision however requires an actual plant audit.
Products/producers assigned a C3 rating represent a potentially high risk and are subject to particularly careful scrutiny. This means that BASF employees from our purchasing organization, along with environmental, health and safety (EHS) experts, visit the supplier and carry out an EHS assessment to determine whether the supplier's plant operates according to Responsible Care® standards (e.g., regarding wastewater treatment, maintenance, safety equipment, quality control). If a potential supplier's facilities meet our requirements, the product/producer is upgraded to a C2 rating, which means we can begin regular purchasing of raw materials from this enterprise.
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Providing advice for better services
In line with the Responsible Care® initiative, it is an integral part of our philosophy that we provide all our partners with information or offer them advice to promote safety, health and environmental protection. In raw materials purchasing, for example, this means that we provide suppliers who do not have adequate standards with the benefits of our expertise in order to minimize any possible risks. Once suppliers meet our requirements, we can include their raw materials in our purchasing program. It is crucial, especially in our strategic growth markets, that we develop successful long-term supplier relationships along with our new sites. This is why we assessed and advised more than 60 new suppliers in Asia alone last year (2002: about 30).
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China: sustainability in the value chain
In April, the China Business Council for Sustainable Development (CBCSD) launched the CSR project "1+3" in Beijing. At the initiative of sustainable development pioneers including BASF, Sinopec and Philips Electronics, almost 50 small and medium-sized enterprises made a commitment to CSR during the event. The project works like this: one member company of CBCSD forms a team with three business partners along the supply chain. Ideally, this would be a customer, a supplier and a logistics service provider. The aim is to promote CSR concepts by systematically supporting partners with best practices, expertise and customized solutions. The three companies then introduce the same model to three more business partners along their own supply chain, creating a snowball effect in which the successful principles of sustainability are propagated onwards. Like the other companies, BASF also benefits from the feedback process and can enhance their business units' strategic partnerships. Currently, six of BASF's partners are directly involved in the project.
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Minimum social standards for suppliers
Acting responsibly in our dealings with suppliers also includes minimum social standards. In accordance with the United Nations' Global Compact Initiative we insist that our suppliers do not employ children or use forced or bonded laborers. Our procurement conditions also specify that suppliers must comply with the International Labor Organization's (ILO) employment standards.
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