Relationships with suppliers (including vendors, contractors and consultants) make a significant contribution to the success of our Company, and we want to make sure our suppliers have strong values and standards of behaviour.
Suppliers who act illegally or unethically can affect our financial performance and profitability, significantly impact our reputation and potentially expose our Company and our employees to criminal or civil penalties. To avoid this, we seek to work with suppliers who are willing to adhere to similar values as our own.
We take great care to use a fair and equitable procurement process. Our selection process aims to clearly inform potential suppliers of our expectations and standards and the requirements applicable to them.
Our expectations of youYou should always be careful when choosing a supplier and encourage them to uphold our standards and contribute positively to our reputation in line with Our Requirements for Supply.
Only seek suppliers who share our commitment to:
- lawful business practices;
- high standards of business conduct;
- management practices that respect the rights of all employees and local communities;
- minimising impacts on the environment; and
- providing a safe and healthy workplace.
You should conduct a health and safety risk assessment before any sourcing process and make sure commercial decisions do not compromise health and safety.
If there is any doubt about the supplier, or potential supplier’s, integrity or ability to perform the contract, you should address these issues immediately.
All procurement decisions should be based on the best value received, taking into account factors such as safety, price, quality, performance, history and suitability to meet BHP standards. You should be satisfied that the supplier is reputable, competent and qualified to perform the work for which they are being hired, that they will operate safely and ethically, and that the compensation sought is reasonable.
You need to take steps to monitor and assess the supplier’s performance. This will require, at a minimum, carefully checking invoices and raising queries with the supplier about any unclear or excessive charges in accordance with Our Requirements for Supply. Always tell suppliers where they can access Our Code so that they understand our expectations of them.
Where to go for help
- Your line leader or 2Up leader
- Ethics and Compliance
Tools and resources
- Seek to obtain competitive bids and question the appropriateness of a sole source request or the strong promotion of certain suppliers.
- Obtain the following before entering into a contract or commitment with a supplier:
- an appropriate risk assessment and commercial review in accordance with Our Requirements for Supply, including an assessment of the potential supplier’s health, safety, environment and community performance, reputation, conduct, integrity, qualifications and experience, creditworthiness and ability to meet BHP standards;
- all appropriate internal approvals;
- pre-approval to engage suppliers in accordance with Our Requirements for Business Conduct.
- Make sure suppliers are reputable, competent and qualified to perform the work, and that the compensation sought is reasonable.
- Award business based on merit, qualifications and experience using objective selection and evaluation criteria.
- Make sure a valid purchase order has been received by the vendor before they start work or provide goods or services.
- Help our suppliers understand and follow Our Code. If they use subcontractors who will do work for us, ensure they too understand Our Code.
- Make sure that agreements clearly state the services or products to be provided, the basis for earning payment and the rate or fee.
- Conduct regular reviews of supplier relationships and performance.
- Verify that invoices clearly and fairly represent goods and services provided. Raise queries about unclear or excessive charges.
- Make payments only to the person or organisation that actually provides the goods or services.
- Speak up about any activity by a supplier that is inconsistent with Our Code.
- Award or influence the award of business to a supplier you have a direct or indirect financial interest in or is in anyway associated with a close relative or personal relationship.
- Appoint or influence the appointment of a supplier who is a close relative or with whom you have a personal relationship.
- Suggest or directly request a personal gift, hospitality or anything of value from a supplier.
- Commit BHP by signing a supplier’s contract or any supplier documentation unless you are authorised by the relevant company Board to do so.
- Use suppliers who supply unsafe or environmentally irresponsible products or services, breach laws or regulations, use child or forced labour, or use physical punishment to discipline workers, even if it is allowed by local law.
- Give one supplier’s confidential business information (for example, proposed rates or winning bid information) directly or indirectly to another supplier.
- Ignore warning signs that a supplier may be engaging in inappropriate behaviour.
- Approve a purchase requisition that does not meet BHP requirements.
- Allow a representative of a supplier to approve an invoice for that supplier.
- Knowingly enter into any fraudulent or otherwise illegal transactions or fail to report them as soon as you suspect such arrangements may exist.
Example questions and answers
Minimum requirements for suppliersQuestion: I’m sourcing workwear for our people from a reputable supplier in a developed nation. I’m aware they source their products from manufacturers in developing nations. We have asked for details about their manufacturing conditions in order to ensure we are complying with our minimum requirements for suppliers as well as any applicable labour rights legislation. The vendor has refused to provide these details. Can I still source the workwear from them?
Show AnswerIt is important that all our vendors comply with BHP’s minimum requirements for suppliers. If the vendor refuses to sign up to our minimum requirements for suppliers, we cannot do business with them unless an exemption has been granted. Talk to Supply if you are unsure.
Unexplained invoice itemsQuestion: Our operation has engaged a consultant to assist with some environmental permits and approvals. My 2Up leader selected the consultant and works with them regularly. I’ve seen an invoice from the consultant which includes an amount for ‘miscellaneous’ and an item described as a ‘special fee’. Our operation is expecting a significant environmental approval shortly. I’ve spoken with my 2Up leader and he said that this was the wrong time to offend the consultant by asking questions. He said they are doing a great job and we should just leave them to it.
What should I do?
Show AnswerUnexplained or suspicious items on invoices might suggest that a supplier is making improper payments. Ignoring these red flags could result in BHP breaching anti-corruption laws and cause significant damage to our reputation. As you have already spoken with your 2Up leader, you should speak to Ethics and Compliance or contact EthicsPoint.