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Knowledge Base

In this section, you will find the basic terms, key information and contact details that will be useful in the next stages of the process of ensuring compliance of your business operations with the provisions of Polpharma Group’s Code of Conduct for Suppliers.

We would like you to become gradually involved in the implementation of Polpharma Group’s Supply Chain Sustainability Strategy. Therefore, we want to create a community of Polpharma Group’s suppliers to serve as a platform for knowledge sharing and exchange of best practices. As the first step, we encourage you to share with us the CSR activities that you have in place in your companies. Detailed information is available in the tab Supply Chain Sustainability — Best Practices.

Glossary of important terms:

  • Self-assessment survey: a tool developed by the Polpharmа Group for the Suppliers, to facilitate the assessment of the extent to which their actions are in compliance with the Code of Conduct and demonstration of good practices for the application of its provisions. It is also a tool used to determine the eligibility of Suppliers. The survey is available in electronic version under this link — upon saving the answers, the Supplier receives a feedback email indicating areas for organisational improvement. The information contained in the survey will be confidential, and solely for the attention of the Supplier and the Polpharmа Group and will not be disclosed to third parties.
  • Ethical / social audit: a tool to examine supplier’s adherence to specific codes of ethics, standard requirements, legal regulations or customer’s guidelines. As a result of an ethical audit, recommendations are developed to enhance the company’s corporate culture, external relations, operational transparency and the adequacy of its decisions, as well as to counteract corruption.
  • First-party audit: an internal audit conducted to address a company’s internal needs. A first-party audit is conducted in an independent and unbiased manner by appropriately trained staff who are aware of their responsibilities. Internal audits should be regularly conducted at equal time intervals based on a predefined schedule.
  • Second-party audit: an external audit commissioned by a customer, also known as customer audit. The audited entity is a site supplying products or providing services to the customer. A second-party audit is used to examine if the supplier meets specific requirements and if it is trustworthy. Typically, it is conducted by the customer’s qualified auditors.
  • Third-party audit: an external audit conducted by an independent organization (certification body). This type of audit is commissioned by the audited organization.
  • Supplier of the Polpharmа Group: An organization supplying specific products or services under a contract with the Polpharma Group. Suppliers include manufacturers, distributors, and service providers.
  • Supplier / subcontractor: each entity or person (persons) in the supply chain who directly supply goods or services to the organisation, used in internal processes or in the manufacturing of the organisation’s goods or services. For example, a manufacturer of chemical substances used by the Supplier or transport company hired by the Supplier to transport employees to the plant.
  • Corrective action:an action aimed at eliminating the cause of the identified non-compliance and reconciliation of the Supplier’s conduct with requirements contained in the Code of Conduct. Effective corrective actions prevent similar non-compliance from occurring in the future. An example of a corrective action is the introduction of a system of issuing pay slips to employees or provision of appropriate protective clothing to employees who are exposed to toxic substances. (Source: SAI 2014)
  • Polpharmа Group Supplier Code of Conduct: A document that compiles rules of conduct that are the most important for the Polpharmа Group and comply with the Group’s ethical standards. They must be observed and followed by all Suppliers. It is an important criterion in the selection and assessment of cooperation with suppliers. (Source: Polpharmа Group Supplier Code of Conduct)
  • Conflict of interests: situations in which personal or family interests of an employee, or other connections, are contrary to the interests of the employer. Such situations may include, among others — awarding contracts by an employee to his/her relatives, close acquaintances or companies owned by that employee, favouring close acquaintances by an employee who takes personnel decisions regarding, for example, remuneration, promotion or recruitment, or employee’s involvement in such activities of other entities that may adversely affect the interests of the employer (source: Polpharmа 2015).
  • Corruption in business: Corruption may take on various forms. It is largely linked to the concept of bribery, and this is the form it occurs in most often. Corruption means affecting the decisions undertaken by other persons by offering or giving undue benefits. It appears most frequently in the public sector — when someone wishes to affect the decision of a government official or another person performing a public function. However, corruption may also appear in the private sector — when someone wishes to affect decisions undertaken by persons performing functions at private companies or institutions. Corruption does not only include offering or giving undue benefits personally, but also doing so through intermediaries. Under this same principle, corruption is offering or transferring undue benefits to a directly interested party as well as to third parties (relatives, friends, or even entities linked to the interested party, such as foundations or associations).
  • The undue benefits referred to above can be both material and personal in nature. The form or value of the benefit is of no significance to whether corruption has occurred. (Source: Anti-corruption procedure of the Polpharmа Group)
  • Risk assessment: a process conducted by an organisation to identify and prioritise the areas of risk to continuity of business operations. Such risk may exist in such areas as the area of employees’ safety, business ethics or the organisation’s impact on natural environment.  The risk assessment is used to inform the development of policies and tools for preventing the identified threats.
  • Employees: all persons employed by the organisation at each level, including directors, supervisors, managers, regular and contract employees. Employees are deemed to include also persons who are not employed directly by the organisation (e.g. through temporary work agencies), including, among others, security guards, canteen staff, cleaning staff (Source: SAI 2014).
  • Responsible Supply Chain Management (RSCM): Such management of the supply chain impact, according to which relations with suppliers are shaped taking into account:
    • Economic criteria — such as fair terms of contracts, timely payment of payments due, not using economic advantage to negotiate inadequate terms and conditions of agreements, transparency in establishing business contacts, preventing corruption.

    • Social criteria — i.e. honest employee practices (observing the labour law and human rights, fair remuneration of male and female employees, observing the principles of equal rights, care for OSH rules), as well as practices aimed at cooperation with local communities.

    • Environmental criteria — i.e. aspects associated with impact on the natural environment which relate to the entire life cycle of products (design, transport of materials, use of raw materials for production, disposal)

(Source: “Zrównoważony łańcuch dostaw: trendy i innowacje” – Forum Odpowiedzialnego Bizesu 2014 (“Sustainable supply chain: trends and innovations” — Responsible Business Forum 2014)

  • SEDEX (Supplier Ethical Data Exchange): a not-for-profit organization bringing together companies from around the world and from a wide range of industries. SEDEX offers its members ETI (Ethical Trading Initiative) Base Code services, and an online database to upload audit reports (http://www.sedexglobal.com/about-sedex/)
  • SMETA (SEDEX Members Ethical Trade Audit) — an audit procedure developed by SEDEX.
  • Corporate Social Responsibility (CSR) or Corporate Responsibility (CR): a company management and development strategy, developed based on the company’s values which, taking into account the needs of key stakeholders and the widely understood environment of the company, allows the achievement of long-term business benefits. It is a manner of conducting business activities with due account of social interests.
  • Management system:a set of interrelated rules, processes and procedures used by the company to achieve business objectives. The model of conducting business in a sustainable manner requires the management system to be planned and implemented taking into account the principles of social responsibility.
  • Sustainable Supply Chain: a system of interconnected business activities within a product’s life cycle allowing value creation for all stakeholders, while ensuring commercial success to contribute to the improvement of social prosperity and the environment. (Source: Business For Social Responsibility — BSR 2007).

Frequently Asked Questions

Implementation of the Code
  • What is the purpose of the introduction of the Code of Conduct by the Polpharmа Group?

Introduction of the Code of Conduct is an important stage in developing a sustainable supply chain of the Polpharmа Group. Today, acting in an ethical and responsible way is a necessary and integral element of conducting business throughout the world. As a company present in international markets, we would like to actively collaborate with Suppliers to ensure the observance of the highest standards throughout the entire value chain.

The introduction of the Polpharmа Group Supplier Code of Conduct is aimed at, among other things:

Harmonizing requirements imposed on suppliers of the Polpharmа Group with respect to ethics, employment conditions and occupational safety, product quality, environmental protection and conducting research.

Encouraging Suppliers to actively prevent irregularities in the above areas of operation.

Supporting Suppliers in improving the way they operate, and thus improving the quality of products and services provided (e.g. by indicating good practices, sharing the experience gained by the Polpharmа Group and other Suppliers).

  • How much will it cost me to introduce the principles of the Sustainable Supply Chain in accordance with requirements of the Code of Conduct?

The Polpharmа Group does not expect its Suppliers to incur specific costs related to the introduction of the Code of Conduct. However, we are aware that organizational changes may be needed to ensure that the suppliers’ operations are in compliance with the Code’s provisions, including changes that require some financial expenditure. The scope and nature of these changes, and thus possible costs of introducing corrective actions, will depend on the extent to which actions of a given Supplier are inconsistent with the requirements.

It is worth to remember that many provisions of the Code of Conduct are identical with the locally applicable law which means that by failing to comply with these guidelines, a Supplier may be exposed to costs in the form of financial penalties.

Moreover, application of good practices indicated in the Code of Conduct, such as fair treatment of employees or compliance with OHS standards, should not expose the Supplier to additional costs. Implementation of certain guidelines from the natural environment area may also bring some benefits to the Supplier — e.g. in the form of cost savings resulting from reduced consumption of electricity or water. Finally, in the context of growing awareness of businesses towards sustainable supply chain, the introduction of standards, to which the Code of Conduct refers, helps the Suppliers build their competitive advantage.

  • I have received the Code of Conduct and want to follow it. Where to start?

First of all, you have to complete the survey (link) that will allow you to assess the extent to which your operations comply with the Code of Conduct and demonstrate good practices in the application of its provisions. The result of the survey will indicate which activities should be developed in the first place, which activities should be introduced and which should be stopped.

While planning the activities aimed at ensuring compliance with the Code of Conduct, it is worth answering several key questions, e.g.:

  • Do I follow the provisions of local law?
  • Which of the documents, policies or procedures that I have in place refer to particular areas of the Code of Conduct?
  • Am I sure that all employees are familiar with these procedures? Does following them guarantee compliance with the Code of Conduct, or maybe I should take some additional steps to ensure the effectiveness of my management systems?
  • Am I aware of risks associated with unethical conduct (including of and towards my own employees)?
  • Do I verify the application of requirements imposed on my suppliers and subcontractors?

Answers to these questions, together with results of the self-assessment survey, will provide the Supplier with an indication of inconsistencies it is the most exposed to and of corrective actions that should be taken in the first place. If the Supplier, already at the stage of initial verification, concludes that it is unable to ensure compliance with the Code of Conduct, it should contact the Polpharmа Group at the address etyka@polpharma.com to jointly develop a remedial plan.

  • I observe the law — isn’t that enough?

Observance of local law is the absolute minimum that must be fulfilled by a Supplier in order to become a partner of the Polpharmа Group. However, eventually the principles laid down in the Code of Conduct are the ones that will determine the basic criteria for selection of the Polpharmа Group’s Suppliers, it is therefore worth applying them as quickly as possible. Implementation of the Code of Conduct is an important stage in the implementation of the supply chain sustainability (SCS) strategy of the Polpharmа Group. One of the key targets of the strategy is the mitigation of risk of non-compliance in the area of working and employment conditions, OHS, environmental protection, ethics (including corruption and frauds), as well as quality. Another equally important aspect of the SCS strategy is to build the value both for the Polpharmа Group, as well as for Suppliers who apply the provisions of the Code of Conduct. Observance of the law alone will not provide benefits that can be achieved by Suppliers owing to the Code which not only specifies the requirements, but also indicates the process of continuous improvement.

  • Corruption and bribery are against the Polish law. Why do I need additional procedures to prevent them?

Corruption is forbidden by law in many countries, yet it is still common. Even if, as a result of risk assessment conducted by the company, corruption does not seem to pose a direct threat to its functioning, it cannot be entirely ruled out that it will appear in the future. That is why we expect that our Suppliers will actively prevent corruption, e.g. by implementing their own procedures in this regard.

  • Does Polpharmа apply the principles referred to in the code of conduct for suppliers?

Yes. Since the start of our operations, we have made all efforts to maintain relations with our employees and external partners in observance with the law, internal procedures and the highest ethical standards. The Code of Ethics of the Polpharma Group, adopted by decision of the Management Board of Polpharmа S.A. is a confirmation of these commitments.

(more: http://www.polpharma.pl/kodeks-etyki-grupy-polpharma/).

For years, we have been also taking actions towards sustainable development, including actions minimizing our impact on the environment. A detailed description of our efforts is provided on dedicated social responsibility websites and in the Social Report of the Polpharmа Group (http://www.polpharma.pl/odpowiedzialnosc-spoleczna/).

  • Am I obliged to comply with the principles set out in the Code of Conduct only when I am manufacturing products for / providing services to the Polpharmа Group?

No. By establishing collaboration with the Polpharmа Group, a Supplier becomes a part of our value chain; therefore, we expect our Suppliers to observe the provisions of the Code of Conduct also in their dealings with other business partners.

  • If I am a holder of a certificate in a particular area, does it constitute a reliable evidence of compliance with the requirements?

Provision of a certificate issued by an independent certification body may be an additional evidence of the Supplier’s compliance with criteria outlined in the Code of Conduct. If the Supplier is a holder of such certificate, it should notify the Polpharmа Group of this fact, preferably using the form for submission of good practices. If a certification process is currently underway in your company, we also ask you to provide relevant information — it will be a signal that you have made efforts to comply with the standard.

Irrespective of the above, the audit will include a verification of compliance in all areas of the Code of Conduct — also those covered by the certification. Providing the auditor with documents related to obtaining the certificate will significantly speed up the process, which is another reason why we encourage you to inform us that your plant holds certificates in relevant areas.

  • Will I receive any support from the Polpharma Group during the implementation of the Code of Conduct?

To make it easier for the Suppliers to assess the extent to which their actions are in compliance with the Code of Conduct, we have developed a self-assessment survey (link). We suggest that you start the process with completing this survey. Each Supplier who completes the survey will receive an interpretation of results, indicating which activities should be developed in the first place, which should be introduced and which should be stopped. The website section dedicated to Suppliers that you are visiting right now  also has an educational and informative function. Depending on the needs and requirements of our Suppliers, we will gradually populate it with information on the implementation of the Code of Conduct and sustainable supply chain, also using good practices submitted by the Suppliers.

We welcome you to stay in touch with us — send all your comments and questions regarding the Code of Conduct to the address: etyka@polpharma.com.

  • I want to introduce a code for my suppliers / subcontractors. Can I send the Polpharmа Group Supplier Code of Conduct to my suppliers?

Yes. One of the Code’s requirements is to communicate its principles to own suppliers and subcontractors and promote them throughout the entire supply chain. Of course, the Polpharmа Group Supplier Code of Conduct can be shared with business partners, provided that the document is forwarded in its unchanged form, i.e. including all provisions thereof. Apart from this, we encourage our Suppliers to develop their own rules of conduct applicable in collaboration with their business partners.

  • How can I verify whether my suppliers and subcontractors follow the provisions of the Code of Conduct?

Suppliers are the key partners of the Polpharmа Group in the implementation of the supply chain sustainability strategy, therefore we expect them to promote and verify the principles of application of the Code of Conduct by their own business partners. This can be done by visiting their facilities, obtaining relevant documentation, as well conducting a second- or third-party audit.

  • My supplier / subcontractor refused to follow the Polpharmа Group Supplier Code of Conduct — what should I do?

One of the Code’s requirements is to communicate its principles to own suppliers and subcontractors, as well as to verify if they are observed. Where any of the Supplier’s business partners refuses to adapt its own operations to the Code’s provisions, the Supplier should first make sure what is the object of the non-compliance. If there is an obvious violation of the law, this should be the reason for termination of collaboration with the supplier or subcontractor. If the non-compliance occurs while carrying out orders within the framework of cooperation with the Polpharmа Group, the Supplier should notify the Polpharmа Group of this fact.

  • How should I promote and increase the awareness of sustainable development?

First of all, by following the principles set out in the Code of Conduct and requiring the same from own employees, suppliers and subcontractors. We expect the Polpharmа Group’s Suppliers to introduce standards that go beyond the absolute minimum which is the observance of local law. We also encourage you to implement good practices regarding the Code of Conduct (examples of good practices can be found, among others, on the website http://odpowiedzialnybiznes.pl/dobre-praktyki/) and broadly communicate such actions, also by informing the Polpharmа Group about them (link to the online form).

Self-assessment survey

  • I have received a very low score in the self-assessment survey. Will this result in the termination of collaboration with me by the Polpharmа Group?

No. The self-assessment survey is a tool designed to facilitate the assessment of the extent to which the Supplier’s actions are in compliance with the Code of Conduct and to demonstrate good practices for the application of its provisions. Affirmative answers indicate the desirable actions that will help the Supplier meet the Polpharmа Group’s criteria. If the Supplier has answered NO to most of the questions, it is a signal that some corrective actions should be taken, in particular if the non-compliance concerns critical conditions. The information contained in the survey is confidential, and solely for the attention of the Supplier and the Polpharmа Group and will not be disclosed to third parties.

  • When can I complete another self-assessment survey /How often can the self-assessment survey be completed?

The self-assessment survey is a tool developed by the Polpharmа Group for the Suppliers to facilitate the assessment of the extent to which their actions are in compliance with the Code of Conduct and demonstration of good practices for the application of its provisions. It is also a criterion of eligibility of a Supplier for cooperation with the Polpharmа Group in tender processes. Therefore, we encourage you to complete the self-assessment shortly upon receipt of the Code of Conduct. Where the result of the survey indicates a need to take corrective actions, it will make sense to complete the survey again only after the introduction of changes aimed at correcting the non-compliance with the provisions of the Code of Conduct. The survey can be completed multiple times, but not but not more frequently than once every three months. The information contained in the questionnaire will remain confidential, and solely for the attention of the Supplier and the Polpharmа Group.

 Audits of the Suppliers

  • Who will bear the cost of the audit?

In order to verify the fulfilment and observance of provisions of the Code of Conduct, internal audits (carried out by qualified employees of the Polpharmа Group) and external audits (so-called second-party audits carried out by external auditors) will be conducted at selected suppliers. The type of the audit and tools used will depend on several factors, including the extent and area of non-compliance. Typically, the cost of an internal audit will be borne by the Polpharmа Group, and the cost of an external audit — by the Supplier.

  • According to what scheme / model will the audits be conducted?

In order to verify the fulfilment and observance of provisions of the Code of Conduct, internal audits (carried out by qualified employees of the Polpharmа Group) and external audits (so-called second-party audits carried out by external auditors) will be conducted at selected suppliers. The type of the audit and tools used will depend on several factors, including the extent and area of non-compliance. The scope of audits will correspond to areas of the Code of Conduct, and their purpose will be to verify compliance of suppliers’ operations and check, among other things: the way of treating employees, recruitment and remuneration practices, manner in which the Supplier ensures safe and healthy working conditions, the Supplier’s efforts aimed at reducing negative impact on environment and organisation management systems.