Cooperation with suppliers
GRIs
“The PZU Group consists of not just employees, but also its external partners, suppliers and subcontractors, among others. We want to be absolutely certain that they also act ethically and honestly while respecting all employee rights. As the largest insurer in this part of Europe we therefore feel obligated to verify all of the people with whom we collaborate”. The Code of CSR Best Practices for PZU Group’s Suppliers can be found on the website https://www.pzu.pl/grupapzu/o-nas/kultura-compliance-pzu/kodeks-csr.
[GRI 102-9]
The PZU Group conducts its business activity while respecting all legal regulations, human rights and the principles of occupational safety and health protection. For that reason it also wants to influence the shaping of its suppliers’ attitudes in this area.
The PZU Group wants to build long-term relations with suppliers based on mutual trust, respect and professionalism. In particular, we appreciate suppliers which apply proven market practices and represent the highest level of professional ethics.
The company is aware that it has material impact on the procurement market and assumes responsibility for fostering the highest business standards in its environment. Driven by care for the quality of business relations, promotion of best market practices and positive impact on the society and natural environment, it has developed the “Code of CSR Best Practices for PZU Group’s Suppliers”. It is a collection of principles for the PZU Group and all of its suppliers. Doing business in accordance with this Code and promoting its values are an important criterion in the classification and assessment of prospective suppliers.
The PZU Group wants to promote the idea of corporate social responsibility in relations with its suppliers, cooperating only with business partners who observe human rights, act in compliance with legal regulations, especially with regard to prevention of corruption. Suppliers cooperating with PZU Group entities should ensure safe and fair work conditions for their employees and apply the highest ethical standards and care for the natural environment.
Code of CSR Best Practices for PZU Group’s Suppliers
Human rights
We expect that the PZU Group’s suppliers respect and will respect human rights and act against discrimination when doing business, in particular:
- they abide by employee rights; they ensure safety and the appropriate working conditions for their employees;
- they reject the option of hiring children and do not tolerate any form of slave or forced labor;
- they ensure equal treatment in the workplace and do not employ any discriminatory practices due to age, gender, disability or race
Environmental protection
We remain convinced that every PZU Group supplier follows the very same principles of environmental protection, in particular:
- strives to reduce the quantity of waste produced and segregates the waste produced;
- rationally uses electricity and heat;
- reduces water consumption and counters its pollution;
- minimizes the emission of greenhouse gases, exhaust and dust.
Professional ethics
PZU is a public trust institution. The PZU Group’s professional ethics reflect the vision and values by which we are guided on a daily basis in our companies. That is why we expect the following of suppliers:
- application of the highest business standards in terms of the principles of fair and free competition and accuracy and credibility in communication with clients;
- protection of inside information;
- prevention of corruption and conflicts of interest.
The PZU Group ensures the security of its data and protection of personal data of its clients. It makes sure all of its processes are compliant with the GDPR regulation and local regulations. The PZU Group expects an equally mature approach from its business partners. The basic requirements are as follows:
- submitting to all of the guidelines and obligations imposed by and following from the General Data Protection Regulation and domestic regulations in the field of personal data protection;
- educating and enforcing employees’ adherence to the GDPR and domestic regulations regarding personal data protection;
- showing the utmost diligence in selecting business partners who also satisfy the foregoing requirements.
Supplier audits
The Supplier Audit Team administers business audits on suppliers who have concluded an agreement with PZU or PZU Życie or with both companies and on the PZU Group’s prospective business partners. Supplier audits are carried out in compliance with specific priorities and criteria.
Types of supplier audits:
- periodic – their purpose is to check suppliers regularly with which PZU cooperates. They are conducted according to a predetermined plan;
- ad hoc audits – they are done under order, e.g. in a situation in which a given supplier needs to be checked urgently on account of problems encountered during collaboration or as part of checking a new supplier.
A supplier audit may be conducted in a fundamental scope. In that case it encompasses a diagnosis of the supplier utilizing information from inside the organization, a remote audit using an abbreviated audit form filled out by the supplier and the entire process is wrapped up by drafting a final report and a possible list of recommendations. An extended audit includes an on-site audit in the supplier’s premises. The full audit form filled out on site or directly after the visit is utilized in this type of audit. A representative of the substantive unit may also participate in an extended audit.
Supplier management procedure in supplier registration, verification and qualification
A supplier is entered on the List of Qualified Suppliers by using the procurement platform. This entry is preceded by supplier registration, verification and qualification processes.
Process of registration: The supplier registers on the procurement platform at its own initiative or in response to an invitation from a company employee. It fills out the form with the data and submits declarations on having familiarized itself with the Code of CSR Best Practices for PZU Group’s Suppliers.
Process of verification: An employee of the Supplier Qualification and Assessment Team (ZKiOD) checks the data and documents presented in the form, collects opinions, among other things, form the security, compliance and planning and controlling units. Then he or she decides on whether to reject a supplier or commence its qualification process.
Process of qualification: This involves an assessment of the collected data or documents. An employee of ZKiOD makes a decision and the manager of this unit approves it.
Corruption risk
Each potential supplier is subject to corruption risk assessment on the basis of a pertinent risk assessment questionnaire. In addition, in accordance with the Anti-Corruption Program, each cooperation agreement between the company and a business partner should comprise anti-corruption clauses. One of the clauses is a confirmation of acceptance of the anti-corruption standards prevailing in PZU by the supplier. In accordance with the internal procedures, entities cooperating with PZU and PZU Życie are informed about the Anti-Corruption Program in place in the company.
New Procurement Model
PZU actively looks for areas with potential to augment its operational efficiency and profitability. Changes to procurement were launched from the moment of creating the New Procurement Model project. As part of this project PZU launched a procurement platform available to suppliers at the site: zakupygrupy.pzu.pl. This is the core communication tool with current and future suppliers during the procurement process.
This project is underway in PZU, PZU Życie and PZU Centrum Operacji. It is slated to be completed at the end of May of 2022. In 2020 the first module of the procurement platform had its production launch: registration and verification of suppliers. It therefore serves to set up and develop the database of the PZU Group’s suppliers. In subsequent stages the workflow modules to handle requisitions and purchase orders, electronic procurement and contract procedures and the supplier assessment and audit module will be rolled out.
The project focuses on the following:
- developing, followed by implementing the target model for the operation of procurement in the PZU Group;
- implementing savings drivers pertaining to the management of internal demand, procurement planning and managing suppliers;
- devising the concept for the IT system and implementing it to support the procurement process: from planning, to requisitioning, organizing requests for proposals, evaluating offers, to selecting a supplier, generating a contract and sending purchase orders;
- drafting and implementing internal acts covering procurement aligned to the new procurement model and system (Procedure for selecting the suppliers of goods and services, Rules for qualification, verification and assessment of suppliers).
The key benefits from implementing the New Procurement Model and procurement platform:
- implementing the best practices for running procurement processes in various categories;
- overall control of the current status of a launched procurement process at every stage of its duration;
- archiving information in the system register of events;
- shortening the time for the flow of information, acceptance;
- augmenting control over the safety of information;
- effective procurement planning and comprehensive management of the database of suppliers;
- reducing document-based workflow for most of the documents involved in the procurement process;
- aggregating procurement data to generate cost synergies flowing from shared purchases in the PZU Group.
The ultimate plan is for Group companies to use this model.
The “Procurement Policy in the PZU Group” lays down the fundamental principles in the process of selecting the suppliers of goods and services, and the principles of cooperation and information exchange in procurement the PZU Group. It is in force in all PZU Group companies that are parties to the agreement on the rules of cooperation in the PZU Group dated 21 March 2017, including, among others: PZU Zdrowie, LINK4, TUW PZUW, TFI PZU, PTE PZU, PZU Pomoc, PZU Centrum Operacji and the PZU Group companies in the Baltic States and Ukraine. As part of best practice PZU has signed a procurement cooperation agreement with Alior Bank and Bank Pekao to cooperate for the purpose of achieving procurement-related synergies.
The “Procurement Policy in the PZU Group” stipulates that persons participating in supplier selection avoid situations in which their personal interests may be in conflict with the interests of the entity, they represent the entity with dignity in interactions with suppliers by presenting merits-based qualifications, a pristine ethical attitude and concern for its image and mutual satisfaction derived from cooperation while simultaneously showing concern for the economic interests of the entity. They are prohibited from proposing, promising, giving or demanding any material or personal benefits in order to manipulate a pending decision.
The procurement process is in manner to guarantee observance of the principles of fair competition.
The “Procedure for the Selection of Suppliers of Goods and Services” defines the principles and method of running the supplier selection process in PZU and PZU Życie. According to this document, suppliers are selected as follows:
- through single-source procurements;
- through tender proceedings;
- through negotiations.
Documentation related to the supplier selection process, including: requisitioning, invitations to participate in tender proceedings and other tender documents, submitted offers, documents related to the decision-making process of the tender commission or negotiation team and the supplier selection protocol is stored by the Procurement Department or the unit of the company unilaterally making the selection for at least the entire term of cooperation with the selected supplier, and then is archived according to the principles in force in the company.
The Procurement Department has the right to verify a requisition in terms of the expedience of a procurement and the description of the subject matter of the procurement.
In 2020 the Procurement Department completed 283 procurement procedures (tenders, negotiations, single-source procurements, RfIs) in PZU and PZU Życie. In total, 5,787 contracts were executed with suppliers in PZU and PZU Życie.
The Procurement Policy is in place in Alior Bank. Its purpose is to lay down the main principles and guidelines for the supplier selection process in making procurements for Alior Bank and its subsidiaries. To ensure the safety and confidentiality of information, business partners must fill out the following attachments, among others: “Non-Disclosure Agreement” and “Declaration of no connections”. In January 2020 the Procurement Department in consultation with HR introduced a modification to the “Supplier’s Declaration on Business Ethics” in the clause pertaining to discrimination in connection with the planned amendment of Alior Bank’s anti-mobbing policy. This modification concerned the ban against discrimination for any reasons whatsoever. The reasons enumerated to date have been expanded to include the following: disability, ethnic background, sexual orientation, trade union membership.
A requirement has been in force in Bank Pekao since 2010 for suppliers participating in tenders for more than PLN 1 million net to fill out the “Social and Environmental Responsibility (CSR) Form” containing, among others, information regarding governance incorporating environmental protection. In this case the overarching goal is to raise awareness among the suppliers of goods and services of issues related to environmental protection and human rights and to bolster the bank’s reputation on account of its collaboration with specific suppliers and business partners.
The “Social and Environmental Responsibility (CSR) Form” in Bank Pekao contains straightforward questions about discharging the obligations to adhere to the prevailing regulations concerning environmental protection and to undertake environmentally-friendly initiatives such as the following:
- holding certificates attesting to the environmentally-friendly business profile of a given business partner;
- adhering to environmental protection laws and regulations, inspections conducted and criminal cases related to the failure to abide by the regulations in force in this field;
- implementing innovative and environmentally-friendly new technologies;
- holding training sessions and informational meetings for employees on ecological issues.