GRI 103-2, 103-3 ODS 5.1, 8.7
The commitment to internationally recognized Human Rights is a fundamental value for us, which is based on respect for each individual’s dignity and worth. Any violation of human, physical, psychological, cultural and social rights that involves violence, abuse or discrimination, especially of children and teenagers, is not permitted under any pretext.
We encourage everyone, who if they witness any situation of violation of Human Rights, to denounce the practice by dialing the number 100. We recommend that partner companies adopt prevention measures and procedures for handling complaints related to human rights violations. And we ask our partners to also commit to our Social Golden Rules, which call for punishment in cases of non-compliance (rules include behaviors and practices related to the guarantee of Human Rights). All employees are trained through a Human Rights booklet based on our Code of Conduct. GRI 412-2 ODS 16.B
The outsourced management system is underpinned by four fundamental pillars (processes, tools, structure and people). The Outsourcing Management Program continued to be run in 2018. This project seeks to standardize practices related to the management of outsourced workers, ensure compliance with legal obligations, improve service quality and relations with contracted companies and optimize costs through the management of our contracts.
There are 25 multidisciplinary fronts in Brazil and 36 in Peru, which work on improving procedures, tools, flows, indicators and greater clarity and definition of roles and responsibilities throughout each stage of the service management process.
Some companies receive technical visits from the Supply and Supplier Management areas. In the event of complaints of non-compliance with requirements related to human rights impacts, an investigation process is initiated to ascertain the facts and take the applicable actions, which may involve fines or contract termination. In 2018, no cases of violation of these conditions were registered.
Supplier relations GRI 103-2, 103-3 ODS 8.8
Our Supplier Management Program (Programa de Gestão de Fornecedores) considers four topics: cost/ value, quality, contractual compliance (agreements and legal coverage) and homologation (tax compliance and licenses). Regardless of a supplier’s size, we seek to engage everyone in the best socio-environmental practices with a view toward ensuring the responsible use of natural resources and respect for workers’ rights.
We reviewed the process for registering and contracting suppliers to all our units (smelters, administrative, mining) in 2018, both in Brazil and Peru, resulting in the quarterly standardizing of policies and evaluations. In order to classify, approve and analyze the suppliers, in addition to the basic documentary issues, we now ask for environmental operating licenses, as well as take into account matters involving social responsibility and human rights preservation. Throughout the year, all suppliers received a copy of our new Code of Conduct and signed a commitment pledge.
Our main partners undergo quarterly evaluation that addresses five dimensions: operational, health and safety, environment, legislation, sustainability and compliance.
At the end of each cycle, the partner company receives grades for each dimension and an overall score. Those who do not have the minimum grades for each dimension are referred to a reaction and recovery plan. However, if low scores become frequent, the contract with the company may be discontinued. The results of the cycles fuel our internal processes, such as the prioritization of suppliers with better grades and not just lower prices. This periodic evaluation will also nurture awards programs that will be implemented in the future, because we want to recognize suppliers with the best general results or by categories, such as safety. The evaluation of the due diligence processes, now standardized and carried out periodically, is part of the evaluation.
In 2018, we completed three supplier evaluation cycles, which gave us a broad picture of the method and made it possible to draw up action plans aimed at identifying opportunities to strengthen the process.
In addition, critical suppliers undergo a process that evaluates their financial health (Brazil). Monthly and annually, they are evaluated based on a compliance checklist comprising more than 250 global lists if there is any involvement that could pose a risk to Nexa. For Peru, compliance assessments (Splaft) are carried out for critical suppliers as soon as they are registered.
Even if our operations are not considered to be at risk of human rights violations, our contracts include clauses that prohibit the use of child labor or forced or slave-like labor. Suppliers must also ensure contractually a safe and healthy work environment, freedom to unionize and non-discrimination by gender, race, social class, nationality, religion, physical or mental disability, sexual choice or any other condition of diversity. GRI 407-1, 408-1, 409-1
If a complaint is filed regarding non-compliance with requirements related to human rights impacts, an investigation process is initiated to ascertain the facts and take the applicable actions. These may involve fines or contract termination. In 2018, no cases of violation of these conditions were registered.
We held the first annual meeting on safety with suppliers in Peru, to exchange information on the subject, and the workshop “Meeting of Opportunities” in Aripuanã, which addressed the criteria we adopted for registration and selection of suppliers and future demands for goods and services of the enterprise.
Requirements for the
selection of suppliers
The criteria applied in the selection of suppliers depend on the type of service that will be provided and can broadly include the following issues:
■ Compliance with environmental legislation in the countries of operation
■ ISO 14001 standard
■ Health, workplace safety and environmental programs
■ Environmental risk prevention programs
■ Operating Permits/Environmental Operation
■ Federal Technical Registration of the Brazilian Institute of Environment and Renewable Natural Resources (Ibama)
■ Compliance with all laws in the countries of operation (labor, tax, anti-corruption, etc.)
■ Does not appear on the “Slave Labor Dirty List” published by the Brazilian Ministry of Labor and Employment
■ Signing of a document based on the SA 8000 standard, including non-use of forced or child labor, providing a safe and healthy working environment for workers’ freedom to associate and non-discrimination of any kind
In 2018, 61% of new suppliers were selected and included in the system based on labor practice criteria, 9% on environmental criteria and 12% on human rights and social impacts. The target through 2025 is to engage 100% of critical suppliers in social-environmental risk prevention and mitigation programs. GRI 308-1, 414-1
Supply Chain GRI 102-9, 103-2, 103-3
Our supplier registry covers the most diverse segments: raw material inputs, waste management, environmental management, energy supply, minerals and chemical products, fuels in general, health services, packaging supply, transportation in general, MRO (Maintenance, Repair and Other), facilities and IT, services and maintenance, among others. At the end of the year, 54,430 companies were registered (39,335 in Brazil and 15,095 in Peru) compared to 53,844 at the end of 2017.
In December 2018, we began to migrate our management and suppliers to the Ariba platform, covering the processes of registration, blocking/unblocking, extension and homologation of suppliers.
We always give preference to suppliers in the vicinity our units, which is a criterion for tie-breaking in the choice of suppliers. We take into account the advantages represented by proximity to the operations, identification with the culture and the impulse given to local development provided by a longterm relationship with companies from the communities. In addition, our units are free to acquire non-critical services locally. We also encourage some suppliers, with larger volumes of purchases, to open units close to the areas of operation. In 2018, 12 in-company stores were installed near or inside the company’s units.
Our purchases totaled US$ 1.3 billion in 2018, of which 75.6% was contracted from companies located in the regions where we operate.
Expenses with suppliers GRI 204-1