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Supply Chain Management Model
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Supply Chain Management Model
Jun 1, 2023
Ecopetrol´s Supply Chain Management (SCM) is performed through a strategic model, based on best practices, which ensures the effective, responsible, and sustainable long-term supply of goods and services with technological leverage considering critical aspects such as cost, opportunity, performance, quality, risk level and sustainability (T-ESG®).
Identifies need, designs, and verifies the technical specification and generates budget appropriation.
Defines commercial conditions, develops the contracting processes, assigns, and celebrates contracts and makes modifications.
Manages the start and its performance, is responsible for the payment cycle and the balance and closure of the contract.
Logistics and inventory management of the goods supply chain (does not include raw materials). Determining the optimal quantity and timeliness of the inventory and the governance of the catalogue.
Manages the relationship with suppliers in a differentiated and segmented manner, from their registration and verification to their performance assessment.
This model does not apply to the commercialization of raw materials and products, energy management, comprehensive logistics solutions, financial operations, new businesses, agreements and sponsorships; matters that have specific processes.
Ethics, transparency, and compliance standards in Supply Chain Management:
Ecopetrol´ s Code of Ethics and Conduct outlines the basic and minimum standards of conduct expected for the Suppliers working alongside the Company or any of its subsidiaries. The Code establishes highest standards of integrity to be upheld in all business interactions with Suppliers to prevent corruption, bribery, fraud, money laundering, terrorism financing, violations of the FCPA, conflicts of interest, ethics conflicts and unfair competition.
The Code of Ethics and Conduct also states that the commitment to life is one of the principles that must rule the conduct of all the recipients of the Code. According to this principle, self-care actions inside and outside work and hygiene, safety and environment rules set out by Ecopetrol are a mechanism for the defense of life, health, and the environment.
In addition, the principles of respect and commitment to life constrains the company to guarantee the defense and promotion of human rights, to prevent discrimination and to comply with the HSE regulations. Furthermore, the Code of Ethics and Conduct requires compliance with the law, which means that the recipients of the Code are committed to comply with regulations regarding fair labor practices and human rights, including prohibition of forced or child labor.
Ecopetrol´s suppliers represent that they understand and comply with ethics, transparency and compliance contracting rules, such as Corporate Governance Code, Ethics and Conduct Code, anti-bribery laws, accounting regulations and internal control framework. Failure to comply with those rules may result in a serious breach of contract or a contractual termination right exercised by Ecopetrol and the Group´s companies.
Listado Supply Chain Tarjetas
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Listado Supply Chain
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FUNDAMENTAL PILLARS
The actions and tasks carried out by Ecopetrol´s suppliers, and their employees must be characterized by transparency and ethical behavior; with total rejection and zero tolerance of any conduct that contravenes the postulates defined and adopted in the Code of Ethics and Conduct.
The Supply Chain Management comprises a framework of business ethics strengthened by high standards, mainly based on 3 fundamental pillars:
- Timely management and attention to ethical alerts
- Commercial and Labor Assurance: labor verifications and accompaniment to the fulfillment of labor obligations of suppliers.
- Human resource monitoring: zero sanctioned authorized officials.
- Acquaintance of counterparts: verification of suppliers and related parties in 23 restrictive and control lists.
- Reinforcement and requirement to comply with the corporate ethics regulation.
- Code of ethics and conduct.
- Ensuring the completion of more than 99% of the compliance formats (LAFT and Contractual Integrity Commitment) by suppliers
- Legality and Transparency Agreement with 14 Chambers of Commerce. Guarantors: CONFECAMARAS and CAMPETROL
- Accountability.
- Segregation of roles and responsibilities.
- Corporate model - collegiate decisions with traceability.
- Disclosure of supply chain information.
Seeking to promote these 3 fundamental pillars, the process implemented high standards in this matter aligned with the Code of Ethics and Conduct, preserving corporate principles and values in all phases of the process.
ETHICAL PRINCIPLES
To ensure and reaffirm the commitment to ethics, transparency and compliance, The Supply Chain Management defined and released “Ecopetrol's Best Ally", which details the guidelines that Ecopetrol´s suppliers must comply with:
- Publishing job opportunities in the National Employment Service.
- Formalizing through legal contracts the commercial agreements with suppliers and subcontractors.
- Effecting opportune payments of labor and commercial obligations.
- Deliver quality reports of payments made to collaborators, suppliers, and subcontractors in a timely manner.
- Acting under the legality and free-market policies framework, avoiding intermediaries and undue pressures.
- Contracting local goods and services and hiring local, diverse, and inclusive workforce to and generate value in the regions of operation.
- Answering timely and integrality the requests, complaints and claims of workers, suppliers, community, and unions, without retaliations.
- Avoiding commitments that cannot be fulfilled, as well as, collecting the requests to manage them with the respective authorities.
- Reporting and denouncing with complete evidence act of corruption, intermediation, commercial pressures, affectations, and abnormal conditions.
- Acting with transparency and complying with commercial and labor obligations, in accordance with fair market prices and conditions, applying the principles of Ecopetrol Code of Ethics and Conduct
HUMAN RIGHTS
Ecopetrol recognizes the importance of the commitment to International Human Rights Law, not only in its own operation but also for the activities carried out by its suppliers, since their actions have an impact on the territories and communities where it operates. Therefore, the Company acts proactively and differentiated through contractual and commercial relationships with suppliers to respect, promote and guarantee the following rights and freedoms:
Ecopetrol has the Human Rights and Business Guide which determines the elements that guide Human Rights management aligned with the standards established in the Universal, Inter-American and National Human Rights Systems, which are directly related to business activities, these commitments are extensive to workers, suppliers, partners, and other actors with a current or potential contractual or commercial relationship. Through this Guide, Ecopetrol adheres to:
Consult the details of the activities carried out in Human Rights by the Supply Chain:
Human Rights Management by the Supply Chain Management
ENVIRONMENTAL MANAGEMENT
Ecopetrol promotes the inclusion if good environmental practices among its suppliers, developing the Environmental Program to increase the positive environmental impact during Ecopetrol's operations execution and promote, among its suppliers, the integration and compliance of environmental standards. This agenda is defined by the management in 4 main axes and 4 transverse pillars:
These good practices respond to the 2040 road map drawn to achieve the goals that contribute to the Ecopetrol Group's T-ESG ® strategy and the commitment to energy transition.
Environmental Program for the Supply Chain and Services
BIODIVERSITY
Ecopetrol counts with the Biodiversity Plans, which contemplate the creation of Ecoreserves (areas located on Ecopetrol S.A. or its Business Group properties) aimed to the conservation (preservation, restoration, sustainable use, or awareness) of biodiversity.
Likewise, they are part of Company's Nature-Based Solutions to respond to climate change, disaster risk, water, food and human health security and socioeconomic development promotion, among others. These actions had a net positive impact on biodiversity, deforestation, and land conservation. Currently, there are 15 Ecoreserves designated.
In 2022, Red Colombia of the United Nations Global Compact and the Bogota Chamber of Commerce awarded recognition for good sustainable development practices to the Ecopetrol Group's Ecoreserves Network initiative, for its contribution to Sustainable Development Goal 15 (Life on Land).
HSE MANAGEMENT
SUPPLIERS HSE MANAGEMENT:
Ecopetrol is committed to the preservation of life in all its manifestations. This postulate is reflected in the behaviors deployed by the Company and its suppliers, acting with rigor and discipline fulfilling the HSE management system guidelines, guarantying the environment protection.
At the Company, the results are everyone's responsibility, with common objectives and joint goals, for which Ecopetrol employees, and all the actors related, act as a team to achieve its Higher Purpose. Collaboration is key to achieving optimal HSE management, thus, suppliers have a great responsibility in this aspect. For this reason, Ecopetrol has deployed a series of standards, regulations, and good practices to guarantee that occupational health, industrial safety and environmental management are elements that generate value and provide a healthy, safe and environmentally responsible conditions.
The System contemplates the regulation, review, monitoring, evaluation, and audit of HSE management by suppliers and seeks to guarantee the correct conduct of all suppliers, subcontractors and providers, in accordance with the safety, health and environmental policy and guidelines established by the Company.
DOCUMENTS OF INTEREST:
Enviromental
Occupational Health and Industrial Safety
Process Safety
HSE Cross-cutting Issues
