Procurement Frequently Asked Questions
Under the Sustainable Procurement Program, AGL aims to conduct business in a safe, responsible and equitable manner, in compliance with all applicable laws, regulation and internationally recognised standards and consistent with AGL’s corporate values. As part of this approach, AGL has embedded sustainability principles into our sourcing and procurement processes via our Sustainable Procurement Program.
With a supply base in excess of 4,500 vendors, we understand that our sustainability performance is strongly reliant on our suppliers. Furthermore, we understand that our purchasing choices are likely to have a social and environmental impact. As such, we are committed to working with our suppliers to reduce the sustainability impact of our purchases.
AGL has a distinguished track record of excellence and leadership in sustainability disclosure and reporting. Recent years have witnessed a significant increase in the scope of such reporting obligations. Originally limited to activities occurring within corporate boundaries, the latest trends in sustainability reporting have resulted in broadening the scope to include the sustainability impact of supply chains.
All suppliers are expected to comply or be working towards compliance with areas outlined in AGL’s Supplier Code of Conduct. The Code covers areas of Corporate Governance and Ethics, Risk Management, Labour Policies, Human Rights and Discrimination, Occupational Health and Safety, Environmental Management, Community and Supply Chain.
Performance will be assessed through the completion of a Supplier Code of Conduct questionnaire and a more detailed Sustainable Procurement questionnaire. Where areas of non-compliance have been identified, suppliers will be expected to collaborate with AGL and develop corrective actions to improve the sustainability performance over the life of the contract.
Internally AGL will conduct a risk assessment looking at the inherent social and environmental risks of the supply chain. The risk assessment will review suppliers’ performance under a number of factors specifically relating to the Supplier Code of Conduct including: Good governance, Occupational Health and Safety (OH&S), human rights and labour, community, climate change, water use and quality and other environmental risks. Existing suppliers will be asked to certify compliance to the Supplier Code of Conduct via a Supplier Code of Conduct questionnaire. This questionnaire will be part of the Ariba Source to Contract process.
For areas of non-compliance, AGL will work with the supplier to develop the necessary corrective actions. Some suppliers may be asked to complete a more detailed assessment via the Sustainable Procurement questionnaire. Once again, any areas of non-compliance will be worked through between an AGL representative and the supplier. The aim of the Corrective Action Plan is to make sure that we’re working collaboratively with our suppliers to address non-compliance and to minimise our social and environmental risks.
AGL’s contracts include an obligation for suppliers to comply with the sustainability requirements captured in the Supplier Code of Conduct. Suppliers will be required to self-certify compliance with the code’s requirements by firstly completing the Supplier Code of Conduct questionnaire, then by signing a certificate of compliance. For areas of non-compliance AGL will work with the supplier to develop the necessary corrective actions.
Some suppliers may be asked to complete a more detailed self-assessment via the Sustainable Procurement questionnaire. Once again, any areas of non-compliance will be worked through between an AGL representative and the supplier. The aim of the Corrective Action Plan is to make sure that we’re working collaboratively with our suppliers to minimise our social and environmental risks.
Compliance with the Code of Conduct and Sustainable Procurement questionnaire is expected to be completed by the person responsible for Sustainability or Corporate Social Responsibility within the supplier company. Should no position exist, then the person responsible for the supplier’s community and environmental affairs will be suitable.
Non-compliance with the Supplier Code of Conduct requirements will not result in contract termination, nor will it impact on the relationship. However, AGL will expect non-compliant suppliers to promptly address the areas of non-compliance and ensure compliance is achieved within the life of the contract.
An exception here is for suppliers who breach the Code’s requirements. (E.g. Suppliers who violate the law or employ child labour will never be acceptable by AGL). Should AGL become aware of severe violations this may result in immediate contract termination and impact on future relationships with AGL.
The Supplier Code of Conduct and the Sustainable Procurement questionnaires are self-assessment mechanisms. Therefore suppliers will be responsible to self-certify their compliance with all requirements and will be responsible for the accuracy of the information provided. Supporting evidence may be requested. A review submissions will be carried out as part of the RFP/RFQ evaluation process and form part of the selecting the appropriate supplier who AGL wishes to engage.
This will be part of the Ariba Source to Contract process.
Suppliers will not be required to provide supporting evidence for both the Supplier Code of Conduct and Sustainable Procurement questionnaires. However, AGL may request for information to be made available to support a supplier’s submissions. The supplier is responsible for providing any or all supporting information to AGL when requested.
Data collected by AGL through its Sustainable Procurement program is strictly confidential and as such, will be accessed exclusively by AGL employees and contractors involved in sourcing, procurement and vendor management activities. Non-identifiable supplier information may be used by AGL and /or third parties of AGL in order to benchmark AGL’s sustainability performance against other organisations.
Compliance with the requirements of AGL’s Supplier Code of Conduct will be verified upon contract inception and each time a contract is renewed or re-negotiated. Suppliers may be asked to complete the Sustainable Procurement questionnaire as a one-off. Sustainability performance metrics will be identified and monitored as part of the contract management process.
Eventually, all AGL suppliers will be required to certify compliance to the Supplier Code of Conduct questionnaire. Existing suppliers will be asked to complete the Supplier Code of Conduct questionnaire upon contract renewal or re-negotiation. New suppliers will be required to complete the Supplier Code of Conduct upon entering a contractual arrangement with AGL.
This Supplier Code of Conduct questionnaire will be part of Ariba Source to Contract process.
Yes. The requirements listed in AGL’s Supplier Code of Conduct are applicable to all AGL suppliers. AGL recognises that a more formalised approach to sustainability measurement might prove too costly for small suppliers and takes this into consideration when assessing sustainability performance.
All entities that supply goods or services to AGL.
The requirements of AGL’s Supplier Code of Conduct and the criteria covered in the Sustainable Procurement questionnaire apply to all AGL’s suppliers, irrespective of size or industry.
AGL may provide a degree of flexibility when working with small suppliers and is mindful of supplier size and their financial means.
Depending on the supplier size, AGL expects suppliers to be able to track and monitor their environmental impact but may not require suppliers to implement a formal environmental management system. AGL recognises that a more formalised approach to sustainability measurement might prove too costly for small suppliers and takes this into consideration when assessing sustainability performance.
If a supplier has concerns regarding any aspects of the Supplier Code of Conduct and the self-assessments that make up the program, we would encourage suppliers to make contact with their respective AGL representative.
Ariba is a global best-in-class cloud procurement system that will allow AGL to maximise our benefits when sourcing goods & services and ensure we realise value from enhanced contract management capabilities.
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No. Registration onto Ariba to participate in an AGL Sourcing Event is FREE.
AGL will send e-mail invitations to selected Suppliers to register for upcoming AGL Sourcing Events. This email invitation will provide step-by-step instructions that Suppliers need to complete to register onto Ariba.
AGL is enhancing the way that it collaborates with its valued suppliers Ariba will allow both AGL Procurement and Suppliers to interact electronically throughout sourcing and contract activities, reducing cycle times, enabling quicker decision making and the awarding of contracts.
Ariba allows the use of electronic signatures through DocuSign to execute contracts.
From 1 November 2017, AGL will GO-LIVE with Ariba Source to Contract. This will change how Suppliers interact with AGL when responding to tender bids.
If you have any questions about the new Source to Contract component of Ariba, please email us at AGLProcurementCommunications@agl.com.au.