Responsible procurement

Contents: 
Our approach
Ships service – Marine products
Ships service - ships agency
Wilhelmsen Chemicals 
Ship management

Our approach

Our objective is to actively manage and encourage suppliers to meet governance standards including decent employment conditions for their employees and responsible stewardship for the environment. 

Ships service – Marine products

Marine products are present in 180 locations and 73 countries. Some of the locations are own operated (40%), but most are operated by service providers (60%). Products are sourced from approximately 1 000 suppliers globally and the procurement activities are managed centrally for standard products and locally for non-standard products, gases and refrigerants. All selected suppliers for customer products must comply with ships service’s supplier code of conduct.

Sustainability criteria for marine products supplier assessments covered governance, environment, health and safety and working conditions. Supplier management activities are monitored by visits, audits, and business reviews. Findings and corrective actions are shared with suppliers and followed up closely. Local suppliers of gases and refrigerants are audited and visited for quality assurance. The frequency of the audits varies depending on which tier the supplier falls into. Third party transportation and warehouse service providers are subject to a similar auditing scheme

In 2018, the supplier code of conduct and supply of goods contract templates were updated with sustainability requirements. In addition to sustainability requirements, social measures and plastic packing were on the agenda for all business reviews with key suppliers.

Ships service - ships agency

Ships agency buys products and services on behalf of customers globally from an estimated 7 000 suppliers. Currently, procurement activities are mainly executed on a local level. Suppliers are ordinarily managed in three categories;

• Category 1: Sub-agents, providing key operational services on behalf of Ships agency
• Category 2: High-risk service providers, such as land and launch providers
• Category 3: All other suppliers.

The localised supplier management activities include global standards for the selection and ongoing performance management for all category 1 and 2 suppliers, who are deemed high risk regarding customer service quality and safety requirements. Therefore, all suppliers in these categories are subjected to the standardised selection process including relatively broad environmental criteria, referring mainly to management systems and processes which might be in place to manage the suppliers’ environmental impacts.

Our safety standards for land and launch providers, such as pre-start checks on all motor vehicles and launches, aims at reducing incidents for the safety and wellbeing of personnel transported. However, ships agency identifies that this also provides an avenue for negating any environmental impact through improving the standards of equipment used. It is also a pre-requisite for all land and launch companies for providing services for Ships agency.

During 2018, ships agency implemented due diligence practices into our sub-agency selection process cementing our KYS (“know your supplier”) activities to independently verify the sub-agent’s capability to deliver fully against the agreed terms. A large-scale project to identify our global sub-agents was undertaken to prepare for centralized management in early 2019 for all Category 1 & 2 suppliers. During 2018, the introduction of our Supplier Ethics & Integrity Program was trialed in China and Japan where over 75% of all sub-agents where trained and educated on best practice regarding safety, compliance and operational performance. WSS will continue to centralize all supplier management activities along with extending our Supplier Program to other countries.

Wilhelmsen Chemicals 

Wilhelmsen Chemicals is a manufacturer of chemicals for the marine market and the consumer markets. The total number of suppliers to the factory of raw materials and packaging components are approximately 100, mainly located in Europe. 

In 2018, approximately 30 million litres of raw materials were purchased through our supplier base. The majority is delivered in bulk by vessels and the rest in bulk by trucks or in intermediate bulk containers (IBC).

For packaging, local suppliers are used to the extent possible, avoiding transport of empty packaging. Our main supplier of plastic cans and bottles is located nearby our plant.

Frame agreements with our main suppliers have a requirement stating that all business activities must to be carried out in a manner that complies with regulations, child labour and human rights laws, and considers environmental implications. Suppliers must carry out business in such a way that maximum effort is made to protect the internal and external environment, treat waste safely and systematically to secure maximum level of recycling. 

Ship management 

Ship management continues to encourage suppliers to adopt the International Marine Purchasing Association (IMPA) ACT Supplier Code of Conduct (SCoC). The SCoC seeks to improve the economic, social and environmental sustainability of international shipping and marine industries and is aligned with the United Nations Guiding Principles on business and human rights.

All suppliers are required to register and, as part of this process, are asked to supply information about their corporate governance, including their environmental and social policies. More than 460 new suppliers were screened and categorised as approved or active suppliers during 2018. In addition, a further 177 suppliers were asked to re-register and confirm their commitment to responsible environmental and social policies as part of our ongoing review of active suppliers.

During 2018, ship management increased awareness of responsible purchasing, supporting employees on shore and on vessels in making better purchasing decisions. Ship management supported a group project to identify the sources of plastic waste and take steps to reduce consumption on board Wallenius Wilhelmsen vessels. Supplier screening will continue to be a key focus and ship management will audit selected strategic suppliers as part of our responsible procurement’ initiatives.