Supplier dialogue and engagement
Every year, Chesf holds a Meeting with Suppliers, with the purpose of divulging important information about the business relationship and updating and reinforcing its values. In 2019, under the theme “A Chesf do Amanhã, Hoje” (The Chesf of Tomorrow, Today), the new paradigms of efficiency and competitiveness that guide the processes of Chesf were disclosed.
Our supplier contracting process is oriented by Law 13,303/2016 (“Lei das Estatais”) and by Eletrobras’ Bidding and Contracts Regulations. The entire process follows the requirements of public call and evaluation of legal qualification criteria, technical qualification and economic-financial qualification.
In addition, all contracts have labor clauses and legal conditions related to the guarantee of human rights and compliance with environmental legislation. The document Principles and Commitments of Business Conduct in Chesf’s Relationship with Suppliers, endorsed by suppliers at the time of the bidding, also establishes commitments in this regard, in addition to wages, training and occupational health and safety.
Of the total number of Chesf suppliers, 13 were identified as being at risk of child labor and 42 as being at risk of youth exposure to hazardous work. However, the risks do not necessarily manifest themselves, since the contracts that require the exclusive dedication of labor are monitored as to the payment of labor and social security obligations, according to the Code of Conduct.
In addition, we consider the following to be supplier commitments: to know the contents of the booklet “Principles and Standards of Business Conduct in Chesf’s Relationship with Suppliers”, available on the Chesf portal and attached to contracts; not to employ minors under the age of 18 in night, dangerous or unhealthy work, nor under the age of 16 in any activity, except as apprentices from the age of 14; not to have employees performing degrading or forced labor; and to respect environmental legislation.
Regarding corruption, 72 suppliers with contracts signed in 2019 (29% of the total) were submitted to the due diligence process, as they fit into the critical category under the aspect of integrity, 3 of which were classified with high integrity risk and 1 with very high risk. For these companies, integrity opinions were issued based on background check procedures, and action plans were defined for monitoring, including awareness actions on the issue of integrity, possible audit work, among other actions.
Business ethics and integrity
Main documents guiding ethics and integrity at Chesf:
- Code of Ethical Conduct and Integrity;
- Anti-corruption policy of Eletrobras companies;
- Conflict of Interest Management Policy of Eletrobras companies; and
- Regulation of the Eletrobras Companies Integrity Program (represents a tactical unfolding of the strategic guidelines of the Anticorruption and Conflict of Interest Management Policies).
We have adopted the Eletrobras Companies Integrity Program, also called the “Eletrobras Five Dimensions Program”, whose objective is to prevent, detect and remedy situations of fraud and corruption. The following infographic shows the composition of the Program.
We execute controls related to the Sox Certification (Sarbanes-Oxley Act), which are tested annually by internal and external audits. It is worth mentioning that, in the 2019 cycle, there were no reports of deficiencies related to the Integrity Program. We can also mention the integrity audits carried out by control agencies, such as the Office of the Comptroller General of Brazil, in a process carried out in 2019, 88% of the recommendations recorded by the agency in previous work in 2016 were considered to have been complied with and the rest is covered by action plans. Additionally, the following indicators are monitored quarterly:
- employees trained in anti-corruption policies and procedures;
- supplier due diligence;
- critical suppliers trained in fighting corruption; and
- business partners trained in fighting corruption.
Also, in 2019, we consolidated the process of evaluating the integrity of third parties, which involves:
- supplier evaluation with automation of the due diligence form application, improvement of the background check tool and improvements in integrity reports;
- evaluation of sponsorships, donations, agreements and social actions;
- evaluation of governance members (board directors and members) with the improvement of the background check tool and with a broader scope of the opinion issued by the integrity area; and
- integrity assessment in disinvestment processes.
For further information about this theme consult about reporting and integrity management channels at Corporate governance and ethics > Business ethics and integrity.