WE REINFORCE SUPPLIER AND CONTRACTOR DEVELOPMENT



SUPPLIER DEVELOPMENT

Having suppliers and contractors who offer the necessary goods and services for the operation of Promigas and its affiliated companies in the context of good environmental, social and good governance practices.

Sustainable supplier management means that the organization’s guidelines can be incorporated throughout the supply chain and that risks which might affect the different interest groups can be mitigated. We therefore conduct our relations with suppliers on the basis of strict ethical principles, transparency and fairness, forging strategic alliances that enable us to promote development in the regions where we operate and work together to achieve better human rights, labor, and health and safety practices, with a view to doing business under fair, mutually-beneficial and long-term conditions that are based on trust, all of which will enable us to achieve greater efficiency and productivity when acquiring goods and services.   


We achieve sustainable supplier management by having a rigorous selection process; we ensure that our suppliers are subjected to risk evaluations before we hire them, with a view to guaranteeing transparency on matters relating to asset laundering or the financing of terrorism; we attract suppliers in order to establish strategic alliances that will enable us to promote development in the regions where we operate, and we work together to achieve better human rights, labor, environmental, and health and safety practices. 

We have a corporate Code of Conduct, which is published on the Promigas website, and suppliers are given training in this every two years.  

Our suppliers and contractors should share our business vision, experience our values, and apply our Code of Conduct.  




TARGETS



OUR SUPPLIERS


For infrastructure construction, operation and maintenance in Colombia and Peru we have suppliers of goods (steel pipework, pipework accessories, natural gas valves and instrumentation, fragrances, meters, regulators, cut-off valves) and critical services (construction, integrity, preventive and corrective gas pipeline and station maintenance, gas transportation, sale of services, taking readings, distributing invoices, suspension and cutoff, portfolio management, collections, etc.). We also have international suppliers.  


1 Local refers to purchases made for operations by each of the companies. For Promigas, Promisol and Zonagen, local is defined as Barranquilla and Atlántico province; for Transmetano, it is Medellín and Antioquia; for Promioriente, it is Bucaramanga and the Santanders; for Transoccidente and GdO, Valle del Cauca province; for SPEC and Surtigas, Cartagena and Bolivar province; for CEO, Popayán and Cauca province; and for Quavii, local is defined as Peru.



DEVELOPMENT AND RELATIONSHIPS

We create opportunities for relationships and communication, and we periodically arrange activities aimed at providing updates on safety, health and environment matters.  

The COVID-19 emergency hindered scheduled in-person training and relationship activities initially, and these had to be carried out virtually, for which the #Conexiones2020 campaign was designed. However, and by way of contrast, this made it easier to arrange a number of additional activities virtually and provide greater coverage. #Conexiones2020 included two key lectures, effective management of risks and business continuity, and of supply challenges, and attendance was approximately 19 per cent of those invited. 

Similarly, the 7th Annual Gathering of Suppliers of Goods and Services, which included all companies at corporate level, was held virtually and proved to be good practice for improving relationships and for providing opportunities to listen and discuss matters of interest to the parties.

2019 procurement and supplier management results were presented, and a detailed effective supply tutorial was given. 65 suppliers attended, 20 per cent of them significant.

 




Another initiative aimed at mitigating the supplier non-availability risk and increasing bidder plurality was the first Supplier Conference, with support from the Barranquilla Chamber of Commerce, which managed to arrange 407 appointments, 323 of which were completed. 

Every two years a survey is conducted, with support from a specialist third party, to measure suppliers’ perception of the different processes they participate in as part of their commercial relationship with the GEN Transportation and GEN Distribution companies, and the results of this survey enable us to determine where there is room for improvement in the supply process and where there are opportunities for leverage.  



Sustainable supplier management initiatives continued in 2020. 19 critical suppliers were visited, in order to check their facilities and ensure that information registered was correct and that environmental, social and good governance policies and human rights positions were being complied with. 149 suppliers have been visited since 2018, approximately 28.4 per cent of the total critical suppliers.   

PERFORMANCE EVALUATION 

We fully evaluate the performance of our suppliers of goods and services to GEN Transportation and GEN Distribution companies every year. The evaluation criteria (quality, compliance and service) include sub-criteria of an environmental nature (HSE audits, environmental NC and incidents). We arrange periodic health and safety training programs and we evaluate progress made by our significant services contractors.


Note: Last year, we evaluated suppliers of critical goods and services or those whose purchases or annual contract were equal to or above 70 Current Monthly Legal Minimum Salaries (SMLMV) for Surtigas, GdO and CEO, 150 SMLMV for Versa, 600 SMLMV for Enlace, and USD 17,000 for Quavii and Gasnorp. The evaluation is conducted during the first five months of the year. The figures for 2018 correspond to the evaluation conducted that year for 2017. The data for 2019 corresponds to the evaluation conducted that year for 2018, and the data for 2020 corresponds to the evaluation conducted that year for 2019. .
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