Procurement ethics

Best practices of the Inter-company Relations Charter

Published By
Olivier Audino
Procurement strategy

The Inter-Business Relations Charter underlines the importance of good practices in exchanges between companies. It aims to promote sustainable, responsible and balanced relationships between the various economic actors, taking into account the challenges of sustainable, societal, environmental and ethical development. The Charter thus encourages businesses to integrate environmental, social and societal concerns into their activities. It encourages signatories to adopt a responsible purchasing policy, in particular by encouraging suppliers who are committed to social and environmental responsibility.

La Charte des Relations Inter-Entreprises

Promotion of Corporate Social Responsibility (CSR): Commitment, Balance of Relationships and Transparency in Practices

Companies are also invited to promote corporate social responsibility (CSR) among their strategic subcontractors and suppliers. The signatories of the Inter-Company Relations Charter undertake to respect payment deadlines and to establish balanced relationships with their suppliers. They are encouraged to favour suppliers who meet international standards such as the ISO standard or who have obtained sustainability labels, such as the Lucie label. The Charter also encourages CSR reporting, i.e. the publication of a report on responsible business practices. This reporting makes it possible to make transparent the actions implemented by companies in terms of social and environmental responsibility. It invites companies to put in place areas of continuous improvement, in order to progress in their responsibility approach.

Sustainable Relationships and Extended Responsibility: The Commitment of the Signatories to the Inter-Business Relations Charter

The signatories of the Inter-Company Relations Charter also commit themselves to develop lasting relationships with their suppliers. This means promoting suppliers who respect the environment and who integrate social criteria into their organization. Businesses are encouraged to assess the responsibility of their suppliers and to collaborate with them in a collaborative manner. In addition, The Inter-Company Relations Charter encourages companies to respect the commitments made under the United Nations Global Compact. This global compact, also called Global Compact, encourages companies to respect the ten universal principles relating to human rights, labor law, the environment and the fight against corruption.

Inter-Business Relations Charter: Promoting Global Responsibility and Sustainability in Business Practices

The Inter-Company Relations Charter establishes the best practices to be adopted in relationships between companies. It encourages companies to integrate sustainable, societal, environmental and ethical development issues into their activities. It encourages companies to favour responsible suppliers and to develop lasting relationships with them. Compliance with payment deadlines, CSR reporting and commitment to a responsible approach are key elements of this Charter. By adopting these best practices, businesses contribute to responsible global, economic, social and environmental performance.

Charte des Relations Inter-Entreprises

The Inter-Business Relations Charter

Ensuring Financial Fairness for Suppliers

The responsible attitude of the major contractor consists in paying in accordance with the LME law, applying its provisions strictly and truthfully.

The signatories undertake not to distort the spirit of the law and to refrain, with respect to small and medium-sized businesses, from practices such as:

  • the imposition of excessive discount rates in return for complying with the payment deadlines set out in the LME law;
  • the unilateral application of an unreasonable deference for litigation at the time of settlement except for contractual provisions;
  • the lack of information from the supplier in the event of a dispute;
  • the voluntary delay in dealing with the dispute.

Promoting Collaboration Between Major Contractors And Strategic Suppliers

Major contractors want to engage in collaboration with their strategic suppliers, which consists, for example, in:

  • sharing the costs of qualification, final certification;
  • help SMEs, which are at the heart of their strategic panel, to the performance of their company (production, purchasing, etc.) . );
  • help SMEs to make optimal use of existing arrangements;
  • taking care to respect the management of the companies concerned.

This approach will be undertaken in good faith by the customer and the supplier, if necessary by agreement, by excluding any practice comparable to de facto management and by aiming only at establishing a partnership relationship.

Reducing the risks of reciprocal dependencies between principals and suppliers

The excessive weight of a contractor in the activity of an SME can be a risk factor in the event of a sudden change in order volumes. As a result, all the actions that can be undertaken by SMEs (diversification, internationalization, improvement of know-how) will be as many positive initiatives for clients.

The withdrawal of a major contractor will be anticipated and gradual in order to take into account the seniority of relationships with the company and, where appropriate, the degree of dependence, its possibilities to diversify or adapt.

A supplier who acquires a de facto technical monopoly may put a contractor's supplies at risk.

The latter will then logically want a second source of supply, which can be expressed in the context of negotiations, for example in the form of a license transfer that is normally remunerated.

Involving Major Contractors In Their Sector

In its bilateral relationship with suppliers in its sector, the major contractor is committed to seeking:

  • A relationship of trust with the management of the company, and in particular the company manager, who will therefore be invited to give his client the necessary visibility on his activity;
  • The development ofPredictive management of purchases to give visibility to suppliers by communicating in advance order stoppages and forecast levels of activity in the medium and long term and thus promote the adaptation of capacities;
  • The protection of the sector by avoiding, as far as possible, the abrupt reintegration of operations in a period of crisis, and being attentive to maintaining the subcontracting capacities and know-how that will be necessary at the time of recovery and development.
  • Major buyers will pay attention to the consolidation of production chains, especially in the event of technological advances and will promote their international deployment.

Appreciate the total cost of the purchase

To assess the competitiveness between offers from different sources, major contractors will focus as much as possible on:

  • take into account all the components of the cost (not only compare the price of the good or service, but integrate all the additional costs) such as:
  • the associated logistical costs borne directly by the buyer (transport, storage, etc.),
  • the duration of technical development with the back and forth,
  • the time for training and acquiring skills,
  • after-sales costs for services rendered equivalent,
  • the costs of quality and CSR audits.
  • integrate, particularly in terms of subcontracting, all the hazards associated with the assessment of these total costs, such as:
  • supply disruptions,
  • the conformity of products and services,
  • the risks associated with the handling of disputes,
  • currency fluctuations,
  • social and political risks, not covered by insurance,
  • the reliability of the after-sales service,

With the possible consequences in terms of operating losses and impact on the company's image.

Integrating the Environmental Problem

The major customer must anticipate the challenges of sustainable development and, in particular, the environmental impacts of its purchasing policy, its sources of supply and its product/service specifications in order to prepare for a likely increase in regulatory obligations in this area, for future increases in fossil fuels or for the probable taxation of emissions:

  • recycling at the end of life
  • waste treatment, pollution from energy consumption,
  • the carbon balance.

The major contractor also plays an exemplary role in order to make its suppliers aware of their responsibility in terms of sustainable development issues. It integrates the performance of suppliers in this area into its selection criteria.

La Charte Des Relations Inter-Entreprises

Ensuring the territorial responsibility of your company

It is the responsibility of every company to:

  • create a network of relationships that contributes to its development by ensuring the good exchanges of business relationships with customers and suppliers located in the same territory;
  • seek, in the territory in which it operates, to contribute as much as possible to the development of economic activity.

Purchasing: A Function And A Process

The respect, on a daily basis by a company, of all the principles set out is based on the professionalism of its buyers who must be:

  • trained in the techniques of the Purchasing profession;
  • personally committed to ethics, showing impartiality and objectivity and avoiding any situation that could generate conflicts of interest;
  • responsible for ensuring open, free and fair competition, guaranteeing efficiency on the basis of the following rules: free access to tenders, equal treatment of candidates, transparency and traceability of procedures, taking into account the total cost as defined in point 5.

The same principles apply to purchases that would be made by delegation to third parties.

A Purchasing Department Responsible for Globally Managing Supplier Relationships

For a major contractor, the actors in the Purchasing function are not exclusively buyers, but also in particular prescribers and users, who may be in daily contact with suppliers.

The quality of the relationship with suppliers is the result of teamwork, where everyone's contribution is decisive. It is a collective mission.

The Purchasing function manages or coordinates the entire commercial, financial and accounting relationship with suppliers by:

  • animating a customer-supplier relationship, based on mutual respect;
  • putting in place the relevant means to monitor suppliers;
  • communicating its purchasing policy with as much transparency as possible;
  • giving priority to negotiation to resolve commercial disputes.

The Purchasing function pilot or coordinate the appropriate business plans for the implementation of this Charter, the monitoring of associated indicators and the necessary corrective actions.

Contractors designate one or more “SME correspondent (s)” who can be contacted by suppliers, in the absence of resolution of the conflict with the local buyer, in order to give priority to mediation

Establishing a consistent remuneration policy for buyers

The setting of the objectives of a purchaser — whether internal to the client or a delegate — or even the architecture of the variable portion of his remuneration, in particular integrates all of these principles of responsible purchasing at the economic, financial, environmental and territorial levels contained in this Charter.

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