Discover the Acea Group online 2019 Sustainability Report
Procurement Policies
Purchases and Logistics defines policies and guidelines and manages as a service the procurement of goods, services and works required by the Group Functions/Companies in a centralized, effective and efficient manner. To this end, it values the technical skills of the buyers, handles the requests of “internal customers” (Functions/Companies in the Group) and develops a transparent relationship with suppliers.
The Function also deals with the centralized management of the Group’s materials, logistics and warehouses, coordinating the operations of the central warehouse and the local warehouses of the main operating Companies. In 2019 the project for the expansion of the Santa Palomba Logistics Hub continued, where, thanks to the addition of 9,000 square metres of land, a new warehouse is under construction that will increase the storage capacity by an additional 5,000 square metres on the ground and 2,000 pallet racks and will host new testing laboratories of the companies Areti and Elabori.
DEALINGS WITH SUPPLIERS AND PROCUREMENT MANAGEMENT
The Acea Code of Ethics recalls the reference principles76 that should guide relations between Acea, as a contracting authority and its suppliers: contractors and subcontractors:
- compliance with rules and procedures, including processes of due diligence aimed at assessing any risks of corruption;
- the principles of transparency and protection of competition;
- principles of good faith, loyalty, professional propriety;
- promotion of ethical and sustainability aspects, such as respect for the protection and safety conditions of workers, the quality of goods and services, respect for the environment and the pursuit of energy savings.
Suppliers issue a declaration of acceptance and commitment to comply with the prescriptions contained in the Code of Ethics, attached to the documents produced for participation in tender procedures for the awarding of works, goods and services. Any violation of the principles contained therein revealed by audits will result in the exclusion from the tender or cancellation of the award.
To identify its suppliers, Acea mainly uses tenders77, adopting transparency criteria: during 2019, 81% of all procurements were entrusted through a tender procedure, in line with 2018.
For centrally managed Group companies, on the website the Purchases and Logistics Function has published78 the documentation relating to purchases regulated by the Public Procurement Code79.
Operators who are interested in participating in tenders can freely access the portal of the Qualification Systems and the portal for participation in online calls for tenders in the “Suppliers” area of the company website. The web portal is based on the same operational procedure as traditional tenders: it checks the adequacy of the supporting document, acknowledges possession of the eligibility requirements, discloses the bids and displays the ranking.
The Administration, Finance and Control Function monitors the payment times of suppliers. In 2019, for companies in the scope, the average delay of payments made was 35 days80. The same figure, if weighted based on the amounts, decreases to approximately 18 days81. This occurred for about 43% of the value of payments made during the year, while the percentage of amounts paid on a regular basis was 57%.
COLLABORATION BETWEEN THE PARTIES FOR THE PROTECTION OF EMPLOYMENT
Pursuant to the Memorandum on Water Tender Contracts between Acea SpA, Acea Ato 2, the Trade Unions and the Trade Federations, a number of meetings were held as part of the Joint Committee set up for the purpose. Thanks to the collaborative discussions, the critical issues regarding the safety and organization of the work of personnel of the contractor companies have been reduced, also to the benefit of traceability and transparency of information. In agreement with the Parties, in 2019 Acea renewed its commitment to promote the employment protection of workers employed by subcontractors involved in Acea contracts, combating forms of undocumented work or labour that does not comply with the applicable national collective bargaining agreements.
In the calls for tenders published in 2019 for both water contracts and those for the electric and water contact centre, the Industrial Relations Unit contributed to the drafting and application of the social clause, to safeguard employment levels in the event of a change of contract. The application of this clause has ensured the transfer of staff from the outgoing companies to the incoming companies, without repercussions in terms of employment. The employment protection measure is the result of a fruitful discussion between Acea, companies interested in changing contracts and the unions of the sector in question.
DISPUTES WITH SUPPLIERS IN 2019
Disputes82 between the company and suppliers mainly concern litigation due to failure to pay invoices and legal action concerning tender contracts. With regard to non-payment of invoices for supplies of goods, services and works, there has been a decrease in the number of disputes that have arisen: 22 in 2019 (compared to 29 in 2018). These are injunctions concerning invoices that were not paid for reasons of a formal nature and are quickly resolved by settlement proceedings. In fact, 6 cases were already settled during 2019.
With regard to the remaining litigation relating to procurement contracts, which mainly concerns the registering of reserves by contractors, contract terminations and compensation for damages, in 2019 20 legal actions were initiated, with an increase in the number of disputes (13 in 2018). We point out, moreover, that 23 disputes were lodged for administrative reasons (6 in the previous year) on the matter of calls to tender, 3 of which are already settled.
As at 31 December 2019, the total number of disputes pending with suppliers (including disputes initiated in previous years) amounted to 112, an increase compared to 2018, where there with 86 disputes, although the scope of reporting was smaller. In detail, this concerns 19 appeals to the local court on the matter of awards and 70 proceedings brought before the ordinary magistrate’s court mainly concerning registrations of reserves by the contractors, contract termination and compensation of damages – and 23 regarding unpaid invoices.
SUSTAINABILITY CRITERIA IN TENDERS
In 2019 the Group companies under analysis signed over 2,800 contracts with more than 1,400 suppliers, an increase of approximately 27% compared to 2018 (see table no. 35).
As a requirement for participation, for 100% of tenders for the award of works contracts and for numerous contracts for the purchase of goods and services, Acea requires certification of the UNI EN ISO 9001 quality management system. Furthermore, for 11 product categories relating to the purchase of goods or services (out of 30 compatible product categories) sustainability criteria applicable during the tender have been defined. In 2019 these criteria were included in 71% of potentially eligible tenders (22 out of 31) awarded on the basis of the most competitive bid criterion. For some tenders for water, electrical and civil engineering works awarded on the basis of the most competitive bid, rewarding criteria were also included regarding the use of ecological vehicles, additional training of workers in the area of safety, and the possession of certifications (where not already participation requirements) in the area of environment/safety/energy efficiency.
With attention to the green criteria in procurement practices, in its tender documents Acea includes as binding parameters or rewards the regulatory references to the Minimum Environmental Criteria (CAM) adopted by Decree of the Ministry for the Environment, Protection of Land and Sea83. Specifically, in 2019 Acea applied the CAMs in the tenders related to: tablets for field personnel; PCs for workstations and printer cartridges, thus expanding the product categories already covered by the CAMS in the event of a tender (such as paper, office furnishings, public lighting – supply and design of LED lighting fixtures – work clothes, cleaning of buildings, maintenance of green areas, vehicles), and reaching 9 CAMs applied out of the 10 applicable to the Group’s supply types. Regarding other product categories not covered by the Ministerial Decrees, where possible Acea considers applying the same approach as the CAM, for example after sharing with the companies most involved for laboratory materials.
76 The Acea Code of Ethics, updated in 2018 and approved by the Board of Directors, is shared on the company intranet with all employees and is available online at www.gruppo.acea.it, Governance section, Corporate Governance sub- section. The Code devotes particular attention to suppliers in article 15, as well as numerous other references in the text. Particular attention is paid to social protection in contexts at greatest risk: “In supply contracts with at-risk countries, defined as such by recognized organizations, contractual clauses have been introduced that involve: compliance of the supplier with specific social obligations (e.g. measures that guarantee employees respect for their fundamental rights, the principles of equal treatment and non-discrimination, protection against child labour)” (Code of Ethics, art 15.2).
77 Acea issues tender procedures for the procurement of works, goods and services in compliance with current legislation (Legislative Decree no. 50/2016), with reference to the ordinary and special water and energy sectors. In particular, for tenders in special areas involving amounts below the EU threshold, Acea applies Internal Regulations consistent with the principles of the EU Treaty for the protection of competition. Finally, for tenders that do not fall within the scope of application of the Code on public contracts (so-called “extraneous or private law”), selection procedures are used which comply with the principles of free competition, equal treatment, non-discrimination, transparency and proportionality.
78 In compliance with what is required by the National Anti-corruption Authority (ANAC) and envisaged by the so-called “Anti-corruption Law” (Law 190/2012).
79 Legislative Decree no. 50 of 18 April 2016 and subsequent amendments and additions. Code of Public Contracts.
80 The calculation of the data is the result of the simple average of the difference between the expiry date of the bill in the system and the date of actual payment.
81 The calculation of the figure is the result of the average of the difference between the expiry date of the bill in the system and the date of actual payment weighted according to the amount of the bills.
82 It should be noted that the 2019 data concern all the Companies in the NFS scope (including Gesesa and Gori), therefore the changes recorded have been partly influenced by this extension of the scope.
83 From the website www.minambiente.it: “Minimum Environmental Criteria (CAM) are the environmental requirements defined for the various phases of the purchasing process, aimed at identifying the best design solution, product or service from an environmental point of view throughout the life cycle, taking into account market availability. [...] Their systematic and uniform application makes it possible to spread environmental technologies and environmentally preferable products”.