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SUSTAINABILITY
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Suppliers
Eni performs an important social role in the geographical areas where it operates also because through its demand for goods and services, the company's activities alone mobilize around 30 billion euros a year, involving a total of 29,416 suppliers. In addition to this there is the indirect effect which the interdependence generated by this level of expenditure creates in associated industries.
Eni is aiming to optimize and improve its supplier management system by gradually extending it to all its production centers, particularly abroad, creating new forms of partnership to minimize supply risks, improving the tools needed to facilitate the drafting and signing of contracts.
Furthermore, Eni seeks the same values among its suppliers as those that characterize its own operations, selecting and constantly monitoring compliance with its requirements, such as respect for human rights and anti-corruption policies, as well as promoting responsible behavior throughout the supply chain.
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Operational data -
Monitoring activities
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Local suppliers in Australia
Suppliers
| World | Italy | Overseas | ||||
| 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | |
| Procurement per year (euro million ) | 33,890 | 30,026 | 12,526 | 11,091 | 21,364 | 18,935 |
| Suppliers used | 26,270 | 29,416 | 13,928 | 14,027 | 13,810 | 18,704 |
| Suppliers concentration (top 20) – World 24% | ||||||
| The number of suppliers used on a global level does not coincide with the summation Italy plus Overseas because the same supplier can be used in different areas. The calculation of the procurement per year does not include procurement of raw materials and procurement performed by the individual functions. | ||||||
Suppliers Qualification
| 2006 | 2007 | 2008 | |
| Suppliers subject to qualification procedures including screening on Human Rights |
4,703 | 5,784 | 6,174 |
| Percentage procured from suppliers subject to qualification procedures including screening on Human Rights | 9,334 | 5,535 | 3,799 |
| Qualification Cycles performed in one year | 11,582 | 9,114 | 2,468 |
| with negative outcome | 9,428 | 7,101 | 2,327 |
| The number of suppliers subject to qualification procedures, including screening on Human Rights, increased by 7% over 2007. The procurement share towards suppliers subject to qualification procedures is only related to Eni and its foreign subsidiaries with structured qualification systems. | |||
In addition to supplier qualification activities the monitoring of suppliers through feeback activities is fundamental. During 2008, feedback activities involved a detailed and systematic analysis of the content of reports regarding the conduct of suppliers. Monitoring activities – following serious reports of non-compliance and illegal behaviors - has led to a supervisory status for 35 suppliers, 7 suspensions, 5 revocations and one letter of concern.
General principles were established that form the basis of Eni's new system for assessing the contractual performance of suppliers. Procedures were also established for linking the results of feedback data processing with the assessment of bids during contract tendering procedures. The new system – which will be implemented during the course of 2009 - provides for the use of a feedback form that includes aspects relating to sustainability, such as safety at work, environmental protection, staff pay levels, as well as compliance with the Eni Code of Ethics.
In 2008, the monitoring program relative to the compliance of supply processes with local regulations and partner agreements with Eni regulations continued.
Foreign subsidiaries in Congo, Tunisia, the Czech Republic as well as companies within the petrochemical sector in France were assessed. These compliance audits included a specific compliance assessment with respect to sustainability themes, including the presence of human rights clauses within contractual standards.
As regards energy saving during 2008, a scouting exercise was carried out to identify suppliers with whom a framework agreement could be drawn up to build turnkey cogeneration plants at the premises of industrial clients.
Good practice in this respect has come from Australia, where, in response to demands made by local stakeholders, Eni has adopted an Australian Industry Participation Plan (AIPP), a tool aimed at maximizing the use of local suppliers and workers. Since July 2006, which is when the Blacktip production activities began, 48% of total procurement has been ordered from Australian suppliers, amounting to a total of around AUD 274 million.
19% of this, amounting to around AUD 52 million, has come from suppliers in the Northern Territory, where the Blacktip project is based and where there is a significant presence of indigenous people. Employment opportunities have been created for around 50 people from the Aboriginal minorities. In 2008, 522 people were employed by the Blacktip Onshore Gas Point through contractors and sub-contractors.
Furthermore, it is estimated that in 2008 the company's activities offered employment opportunities to 23 people from ethnic minorities, some of whom work for a sub-contractor company created by members of the Aboriginal communities.
In Wadeye, in fact, through its Indigenous Business Development plan, Eni is supporting a program, in partnership with the Northern Territory government, which provides support and guidance in setting up small local businesses. In 2008, an occupational training plan was implemented for the indigenous people aimed at allowing them to gain employment in the Blacktip project. The course has so far been completed by 25 people.
