Social performance | Suppliers | Supply chain management
In 2009, Fibria began to revise its procedures regarding its strategy for outsourcing and the evaluation and selection of suppliers, with a view to creating a single broad policy in support of its philosophy of supply chain sustainability.
From those efforts, a process of Supply Chain Management was defined, based around an inter-functional outsourcing committee (“Outsourcing Committee”). This committee is being set up by the Supplies area, with a reach that extends into various other areas of the company.
With members from the company’s Production, Legal, Engineering, Control, Supplies, Human Resources, Management Systems and Forestry areas, the Outsourcing Committee has the task of ensuring the sustainability and competitive performance of the services provided by third parties.
Furthermore, the committee is responsible for assessing the quality of the services provided and encouraging suppliers to be in compliance with all tax, labor, human resources, work safety, quality, environmental and economic obligations. It will also assess and deal with any cases of economic dependence – where Fibria accounts for more than 70% of their turnover – among the suppliers.
In terms of supplier development, Fibria has maintained a strategic focus on its participation in and development of the Program for the Development and Training of Suppliers - Prodfor, which is run by the 12 largest companies in the state of Espírito Santo, supported by FINDES (Federation of Industries of the State of Espírito Santo). Following a year of training and auditing, 44 new local companies were certified in 2009 and are now included on Fibria’s “vendor list”, in segments such as engineering, metallurgy, electrics, auditing and transportation.
‘Corporate social responsibility applied only in-house is no longer sufficient. The company needs to extend its practices to its suppliers.’
With regard to the sharing of ethical and sustainability values with its suppliers, throughout 2009, both VCP and Aracruz maintained standard clauses in their contracts prohibiting both child and forced labor. The company is well aware of the hazards involved in suppliers’ use of children in the workforce and imposing of forced labor in industrial and forest activities and adopts a variety of measures, such as the Contractual Memorandum and the Social Responsibility Assessment, to avoid this happening. Ratification against social responsibility assessment criteria is conducted every two years and a total of 633 suppliers were ratified in 2008 and 2009, equivalent to 62.7% of Fibria’s supplier base. Two other obligatory hiring requirements are compliance with Fibria’s environmental policies and transport safety criteria (Safe Roads Program). These standards are annexed to the contract.
One aspect of Fibria’s monitoring of environmental sustainability in its supply chain was the Carbon Inventory 2008, carried out during 2009, in relation to the Jacareí, Aracruz and Guaíba mills, which involved calculating the emissions from its supply links upstream and downstream from its pulp production. Consequently, the final calculation of the carbon emissions included those of all inbound transportation from the forests to the mills and of the outbound transportation — maritime, road and rail — from the mills to the 10 international destination ports. The carbon emissions balance sheet for paper production at the Guaíba Unit included only the upstream supply links.
In 2010, the company also intends to disseminate a culture of climate change governance throughout the supply chain, in line with the recommendations of the Carbon Disclosure Project - Supply Chain. This will allow greater monitoring of the “carbon footprint” of Fibria’s value chain and identification of the opportunities and risks that exist in relation to climate change.