Last Update:
March 1, 2012

Supply chain management

  • Code of Conduct for suppliers includes environmental protection and compliance with human and labor rights, as well as antidiscrimination and anticorruption policies
  • Around 70 suppliers participate in Supplier Day in China
  • Around 500,000 different raw materials, technical goods and services procured; raw materials purchased from more than 6,000 suppliers

Both new and existing suppliers are selected and evaluated not only on the basis of economic criteria, but also on standards for environmental protection, occupational safety and social responsibility. Our Code of Conduct for suppliers is based on internationally recognized guidelines: It includes environmental protection and compliance with human rights and labor laws, as well as antidiscrimination and anticorruption policies. In 2012, we aim to include compliance with the Code of Conduct in our supplier contracts.

We conduct risk-based assessments of our suppliers through on-site visits. Risk matrices help us to identify high-risk suppliers based on country and product risks. In response to this country and product risk analysis, we paid on-site visits to a total of 206 raw materials suppliers in 2011 to assess environmental, health and safety aspects. If our audits find need for improvement, we take corrective measures. We perform a follow-up audit a few months later. If we do not see any improvement, we terminate the business relationship. This occurred in eight cases in 2011.

To check their compliance with international labor and social standards, new suppliers from countries outside the OECD are required to fill out a questionnaire. A total of 665 suppliers received our questionnaire on labor and social standards in 2011. In order to do business with us, a company must have completed and signed the survey, with no key issues – such as the elimination of child labor – remaining unresolved. Should we suspect that our labor and social standards are not being met, we retain the right to conduct an external audit and, if necessary, decline a business relationship with that supplier. We did not terminate any business relationships on these grounds in 2011.

BASF is currently participating in an international initiative of the chemical industry to standardize suppliers’ self-assessment and self-auditing processes worldwide. This initiative aims to use a globally uniform list of questions modeled after international guidelines like Responsible Care, the International Labor Organization (ILO) standards and the principles of the United Nations’ Global Compact, and to develop uniform criteria for auditing suppliers.

In 2011, we provided compliance training to our employees in procurement on topics including sustainability. In order to further minimize supply chain risks and offer information on the opportunities available through sustainable business practices, we held a Supplier Day in 2011 with around 70 suppliers in China. There, we recruited more participants for the “1+3” project begun in 2006, in which suppliers pledge to pass on our sustainability standards to at least three of their cooperation partners in the supply chain.

BASF purchased approximately 500,000 different raw materials and technical goods as well as services for plant construction, maintenance and logistics in 2011. We procured raw materials from over 6,000 suppliers.

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