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Supply chain

Contractors and suppliers

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Total’s activities generate hundreds of thousands of direct and indirect jobs worldwide. Present in more than 130 countries, the Group currently works with a network of more than 100,000 suppliers of goods and services. In 2019, the Group’s purchases of goods and services (excluding petroleum products and vessel chartering by Trading & Shipping) represented approximately $26 billion worldwide. The allocation of expenditures on the Group level is approximately 31% for goods (products, materials, etc.) and approximately 69% for services (in particular consulting services, work with supply of materials, transport, etc.).

Through their activities, the Group’s subcontractors and suppliers may face the same risks that the Group encounters in its own activities notably in terms of societal and environmental risks. The most prominent risks relate mainly to human rights in the workplace (forced labor, child labor, discrimination, fair and equitable working conditions and safety), health, security and safety, corruption, conflicts of interest, fraud and the environment.

Total’s success as a responsible company is played out all along its value chain, and the Group is convinced of the importance of working with suppliers that respect human rights and take care of their employees. The Group expects its suppliers to adhere to principles equivalent to those in its own Code of Conduct, as set out in the Fundamental Principles of Purchasing directive. To this end, the Group wanted the management of its supplier relations to be coordinated by the dedicated cross-functional Total Global Procurement entity, which is tasked, in particular, with delivering Purchasing services and assisting the Group’s entities and sites, mainly in Exploration & Production, Refining & Petrochemicals, Marketing & Services and Integrated Gas, Renewables & Power. This approach is complemented by employee training programs and actions to raise awareness amongst the Group’s customers and suppliers. Its success is also based on Total’s involvement in international initiatives or collaborative approaches specific to the energy sector that promote the emergence of good practices.

 

The group’s responsible procurement policy

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The Group ensures that contractual conditions are negotiated in an equitable manner with its suppliers. The Code of Conduct restates this requirement and the three essential principles that guide Total’s relations with its suppliers: dialogue, professionalism and the fulfillment of commitments.

These principles are also set forth in the Fundamental Principles of Purchasing, launched in 2010, that specify the commitments that Total expects its employees and suppliers to adhere to in the following areas: respect for human rights at work, the protection of health, security and safety, preservation of the environment, prevention of corruption, and of conflicts of interest and the fight against fraud, respect for competition law, as well as the promotion of economic and social development. These principles uphold the fundamental principles defined in particular in the United Nations Universal Declaration of Human Rights, the fundamental conventions of the International Labor Organization, the United Nations Global Compact and the OECD Guidelines for multinational enterprises.

In early 2020, as part of its continual improvement strategy, Total Global Procurement finalized an update to the CSR risk map associated with the Group’s procurement for each category of goods and services. This map can be credited to the methodological work carried out with support from AFNOR during the second half of 2019. The process involved over 80 internal employees, CSR experts and buyers. A Responsible Procurement roadmap, which was updated in 2019, defines Total’s guidelines for 2019-2023 in terms of respecting human rights throughout the supply chain, environment and economic development. Representatives of the Management Committee of Total Global Procurement and the Civil Society Engagement, HSE and Legal divisions as well as of the Ethics Committee are invited at least once a year to participate to the Responsible Procurement Committee which is tasked with monitoring the implementation of the Group’s Responsible Procurement roadmap.

Employee awareness-raising actions and training

Total has set up a number of channels of communication to raise employee awareness of the risks and issues related to its supply chain. Training modules explaining the Group’s ethical commitments and the Fundamental Principles of Purchasing have been developed for and made available to Group procurement representatives. In 2019, more than 300 buyers were raised and/or trained on respect of human rights and working conditions by suppliers, and 134 on anti-corruption rules.

The Group provides its buyers with supporting materials, such as the “Sustainable Purchasing Awareness Cards”. These factsheets cover various topics relating to human rights at work (such as forced labor and child labor, etc.). A set of communication tools intended to help procurement representatives enter discussions on the Fundamental Principles of Purchasing was also distributed within Total Global Procurement. The materials used in the annual performance review have been revised to include a section on human rights.

In June 2019, the Total Global Procurement seminar was attended by 239 participants (buyers and procurement support functions) and addressed a focus on responsible procurement. When updating the CSR risk map relating to the Group’s procurement, workshops were held to alert buyers to the issue of responsible procurement.

With respect to the development of good practices in business relations, Total has consistently raised its employees’ awareness of mediation as an alternative method for resolving disputes since 2013. In 2019, an open day for employees of the Group, lawyers and operational staff, enabled participants to learn about the benefits of mediation. A brochure designed to increase awareness of the mediation process is available to all Group employees. In addition, an email address ([email protected]) is available on the Total website to allow the Group’s suppliers to contact the dedicated internal mediator, who is tasked with facilitating relations between the Group and its French and international suppliers. The general purchasing terms and conditions also mention the possibility of recourse to mediation.

 

The Group’s policy applied to the supply chain

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Total expects its suppliers to:

  • adhere to the Fundamental Principles of Purchasing and ensure that they are adhered to in their activities;
  • accept to be audited according to these principles;
  • remain attentive to the everyday working conditions of their employees and their suppliers’ employees;
  • ensure that their own suppliers and subcontractors adhere to these Fundamental Principles of Purchasing;
  • refer to the Group Ethics Committee in case of doubt or in the event of any malfunction.

The rules set out in these Principles must be included or transposed into the agreements concluded with suppliers. To this end, these Principles are available for consultation by all suppliers in both French and English on Total’s website.

For example, when renewing its office equipment in 2019, environmental transition experts from the Greenflex subsidiary assisted buyers with defining the Group’s recyclability and energy performance requirements in the specifications.

The supplier qualification process

The supplier qualification process was harmonized at Group level in 2017 by Total Global Procurement. A new internal framework was published in 2018. A new computerized qualification tool was developed in 2019 and will gradually be rolled out in over 100 countries. In 2019, more than 4,000 suppliers managed by Total Global Procurement in France have been incorporated into the application.

It is designed to automate and document the supplier qualification process, which unfolds in four stages:

  1. confirmation from the technical expert of the value in launching the qualification process;
  2. a risk pre-analysis to decide whether an in-depth analysis of each criterion is necessary (HSE, anti-corruption, societal responsibility, financial, technical);
  3. determination of the qualification status;
  4. monitoring and renewal of qualification. Qualifications are valid for three years.

The supplier assessment process

Simultaneously, the Group has set up a supplier assessment process to identify and prevent risks of severe impacts on human rights and fundamental freedoms, human health and safety. Thus, since 2016, the Group conducts audit campaigns on working conditions of its suppliers. A targeted annual audit plan is defined every year and includes the suppliers put forward by the subsidiaries based in countries that have been identified as having a certain level of risk of human rights violations. The number of audits performed in 2019 was quadrupled compared to 2018. Since 2016, those audits have covered a population of close to 80,000 people worldwide.

Moreover, Total, BP, Equinor and Shell are continuing their efforts to develop a common collaborative platform to assess the respect of human rights by their suppliers. Total remains firmly convinced of the importance of working with suppliers that respect human rights, on the one hand, and take care of their employees, on the other hand. Together, the partner companies are pursuing the goal of encouraging the improvement of working conditions in the supply chain of the companies involved. This initiative addresses the United Nations SDG N° 8: “to promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all”.

Supplier awareness-raising actions

The deployment of the anti-corruption policy in purchasing continued in 2019. In addition to numerous initiatives taken in previous years, approximately 120 suppliers underwent an anti-corruption analysis in the perimeter of Total Global Procurement through the issuing of specific questionnaires, completed, in some cases, by external inspections.

Awareness-raising actions are also carried out during meetings with suppliers, particularly the Suppliers Day event that brings the Group’s strategic suppliers together every two years. During Suppliers Day in 2019, the Fundamental Principles of Purchasing and the Group’s new Code of Conduct were distributed to all participants. Particular emphasis was given to responsible procurement and the Group’s principle of zero tolerance towards corruption.

Every year, the International Procurement Office (Total IPO in Shanghai, China) organizes a compliance day. During the event, one of the qualified suppliers is invited to share the actions that it has taken regarding anti-corruption compliance, the concrete problems encountered and how it deals with them. Special focus was given to the issue of respect for human rights, which was also addressed during the Suppliers Day event organized by the IPO in Shanghai in December 2019.

Finally, pursuant to Rule 13p-1 of the Securities Exchange Act of 1934, as amended, which implemented certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Total has submitted since 2014 to the SEC an annual document relating to “conflict minerals”(1) sourced from the Democratic Republic of the Congo or an adjoining country. The document indicates whether, during the preceding calendar year, any such minerals were necessary to the functionality or production of a product manufactured (or contracted to be manufactured) by the TOTAL S.A. or one of its affiliates. The main objective of the rule’s obligation to publish this information is to prevent the direct or indirect funding of armed groups in central Africa. For more information, refer to Total’s most recent publication available or go to www.sec.gov.

(1) Rule 13p-1 defines “conflict minerals” as follows (irrespective of their geographical origin): columbite-tantalite (coltan), cassiterite gold, wolframite as well as their derivatives, which are limited to tantalum, tin and tungsten.

 

The group’s responsible procurement actions

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Since 2010, Total is a signatory to the French Economy and Finances Ministry’s Responsible Supplier Relations Charter, which aims to allow more sustainable and balanced relations between customers and suppliers.

Since 2018, Total has been a member of the United Nations Global Compact platform on Decent Work in Global Supply Chains, and, in this capacity, takes part in various workshops that aim to help the member companies of the Global Compact make progress in this area. In December 2018, the Group committed to pursuing its efforts in terms of decent work and respecting human rights in its supply chain by signing the “Six Commitments” of the United Nations Global Compact. In October 2019, Total welcomed participants at its offices for the platform’s fourth and last round table meeting.

The Group’s buyers also take part in international working groups on responsible procurement. Total belongs to the IPIECA’s Supply Chain Working Group. Building on the workshops held since 2015, Total continued to participate in the Operationalization of the UN Guiding Principles work organized by the IPIECA, aimed at both oil and gas companies and engineering, procurement and construction (EPC) contractors.

Total is also involved in driving local economic development both in France and abroad. In April 2019, Total launched the “Total SME Pool” program to help 10 of the Group’s small and mid-cap suppliers grow their business. For a year, these 10 companies will have the free opportunity of networking with other large organizations, receiving support and guidance for their executives and obtaining assistance with ramping up their international development through the “Total Développement Régional” entity.

Finally, the Group pays special attention to the disabled and protected employment sectors. In France, the Group’s purchases from this sector enabled the achievement of an indirect employment rate of nearly 1% in 2019. Total is a member of the [email protected] association and provides its buyers with an online directory that can be used to identify potential suppliers and service providers (disabled or protected employment sectors) by geographical area and by category. Various meetings were organized in liaison with the Disability Program to familiarize the relevant buyers in Total Global Procurement with the Group’s commitments and the new application available.

In 2019, Total supported, for the first time, the “Awards for Women in Disability-Inclusive Companies” spearheaded by the Handiréseau association and took part in the jury paying tribute to the exemplary careers of disabled women working in the disabled and protected employment sectors. In October 2019, the Group signed UNEA’s (National Union of Disability-Inclusive Companies) charter during the Inclusive Tour organized for a corporate audience. This commitment was made in the presence of France’s Minister for Employment and is aimed at accelerating the process of creating jobs and promoting disability-inclusive companies.

 

Payment terms

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The payment terms for invoices from suppliers and customers of TOTAL S.A. as of December 31, 2019, in application of the provisions of Article D. 441- 4 of the French Commercial Code, are as follows: