NS purchases over €1 billion of goods and services annually. NS has around 5000 suppliers in 24 different countries. Most of our purchases (about 98.5%) come from the Netherlands and Western Europe. Our goods and services cover staff, financial and facility services, IT, construction, communication, energy, trains and transport. More than 200 suppliers account for 80% of our goods and services.
As the purchasing party, NS can exert an influence on suppliers to get them to make their products and processes more sustainable. This lets them make a major contribution to our sustainability objectives. Our CSR requirements are stated in the procurement governance rules and are also embedded in the General Terms and Conditions of Purchase (www.nsprocurement.nl). We also work closely with our suppliers and challenge them to submit innovative and sustainable offers. We used the following initiatives to steer procurement:
Since 2014, we have been carrying out Corporate Social Responsibility (CSR) assessments at our biggest suppliers, who account for about 60% of the total spend. We look at how they handle aspects such as the environment, the social and ethical sides, and the supply chain. Scores make it possible to compare suppliers and estimate the risks. As of 2015, these assessments are also used when awarding contracts. The CSR assessment is mandatory for parties who are awarded a contract. Together with around ten major European carriers and rail suppliers, NS is working on Railsponsible with the aim of having the method accepted as the standard in the rail industry.
Making procurement more sustainable by using tendering plans and ‘circular-economy’ purchasing
NS uses a tendering plan for its EU tendering activities. This is an internal document that describes the process steps that are needed when preparing an invitation to tender. The tendering plan applies the principles of Socially Responsible Procurement (SRP) when formulating the selection and award criteria. These criteria have been embedded in the plan since 2015.
Code of conduct for suppliers with the biggest spend
The code of conduct became part of the contract for new suppliers in 2015. The code of conduct explicitly states the conditions under which we want to do business with suppliers. One general requirement, for instance, is that suppliers must shoulder their share of responsibility in socially aware business practices and subscribe to the principles encapsulated in relevant standards, as laid down in such documents as the Universal Declaration of Human Rights and organisations such as the ILO, OECD and ICC. NS arranges for an independent party to check whether suppliers are complying with the code of conduct. If the code is not observed or if there are infringements, we first assess the risk. Then we start discussions with the supplier and ask for an improvement plan. NS arranged 43 audits in 2018; no infringements were found. In cases of serious violations such as corruption, a decision to terminate the relationship may be made. Exclusion criteria also apply to subcontractors used by our suppliers.
NS has drawn up a policy to prevent bribery and corruption. As part of the implementation, all purchasers within NS take an e-learning module on Ethics & Compliance, and the importance of the proper observance of the policy is highlighted.
NS recognises that the procurement of goods and services entails risks in the areas of railway safety, safety at work, information security, competition rules, continuity and supplies, liability for hired workers and vicarious liability, and sustainability. NS minimises these risks by setting specific contractual requirements and – depending on the size of the risk – performing assessments to check whether the contractual agreements are being complied with. Contracts provide for the possibility of penalties or termination if the requirements are not satisfied.