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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 worldwide. In 2018, the Group’s purchases of goods and services (excluding petroleum products and vessel chartering by Trading & Shipping) represented approximately $29 billion(1) worldwide. The allocation of expenditures on the Group level is approximately 32% for goods (products, materials, etc.) and approximately 68% 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 social, environmental, societal and corruption-related risks. The most prominent risks relate mainly to human rights in the workplace (forced labor and 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 Gas, Renewables & Power. This approach is complemented by employee training programs and actions to raise awareness amongst the Group’s partners, 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.

(1) $25 billion excluding Hutchinson, SunPower and Saft Group.

 

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, safety and security, preservation of the environment, prevention of corruption, and conflicts of interest and the fight against fraud, respect for competition law, as well as the promotion of economic and social development. These principles were drawn up in keeping with the fundamental principles defined in particular in the United Nations Universal Declaration of Human Rights, the conventions of the International Labor Organization, the United Nations Global Compact and the OECD Guidelines for Multinational Enterprises.

Furthermore, a Sustainable Procurement road map defines Total’s guidelines in this area. A Sustainable Procurement Committee regularly brings together the Management Committee of Total Global Procurement and the Civil Society Engagement (including the Human Rights Department), HSE and Legal divisions as well as the Ethics Committee. It is tasked with monitoring the implementation of the Group’s Sustainable Procurement road map.

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 2018, 196 procurement representatives were trained on respect of human rights and working conditions by suppliers, and 250 on anti-corruption rules.

The Group provides its procurement representatives with supporting materials, such as the “Sustainable Purchasing Awareness Cards” that recap human rights at work and identify the purchaser practices that must alert them. A set of communication tools intended to help procurement representatives to 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 2018, the International Procurement Days brought together the 170 procurement representatives present in 41 countries. The Fundamental Principles of Purchasing were distributed during the event and the internal supplier qualification and audit processes were presented.

With respect to the development of good practices in business relations, Total also launched an initiative to raise its employees’ awareness of mediation as an alternative method for resolving disputes. Since 2013, a training day run by professional mediators to raise awareness of mediation has been organized in French and English. In 2017, an open day for employees of the Group, lawyers and suppliers, 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 is available on the Group website (under “Suppliers”). The Group’s suppliers can contact the internal supplier mediator using a generic email address ([email protected]). The internal mediator 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.

 

Extension of the Group’s policy 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 when in 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.

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 will gradually be rolled out starting in 2019, with a planned scope of 107 countries thus far.

It will be used to automate and document the supplier qualification process, which unfolds in four stages:

  1. confirmation of interest;
  2. a risk pre-analysis to decide whether an in-depth analysis of each criterion is necessary (HSE, anti-corruption, societal, 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 started conducting campaigns to audit working conditions amongst its suppliers. These audits are conducted by a specialized service provider, with which Total signed a framework contract in 2016.

Since 2017, the Group has been rolling-out specific training for Group purchasers to evaluate suppliers with respect to human rights.

Moreover, in September 2018, Total, BP, Equinor and Shell announced their intention to develop a common collaborative approach to assess the respect of human rights by their suppliers. The partner companies are convinced of the importance of working with suppliers that respect human rights, on the one hand, and take good care of their employees, on the other. The goal of this common approach is to encourage 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 2017 with awareness-raising sessions for strategic suppliers at the Suppliers Day. This event gathered more than 100 suppliers that are considered to be strategic in view of their contribution to Group operations. In addition to numerous initiatives taken in previous years, in 2018 approximately 229 suppliers underwent an anti-corruption analysis through the issuing of specific questionnaires, completed, in some cases, by external inspections.

Every year, one of the departments of the IPO (Total IPO in Shanghai, China) organizes a compliance day and invites one of its approved suppliers. It can explain the actions it takes regarding anti-corruption compliance, the concrete problems encountered and how it deals with them. The discussions, based on case studies and topical issues, are enlightening for all. In 2018, this event was held in December (refer also to the “Business ethics” section).

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 had. 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, download the document 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 commitments

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

Worldwide, a CSR global agreement monitoring Committee (known as the “FAIR Committee”) meets every year in the presence of representatives who are members of trade unions affiliated with the IndustriALL Global Union and appointed by this federation to monitor and implement the agreement. It identifies good practice and areas for improvement. In application of the areas for improvement defined by this Committee, the programs mentioned earlier have already been set up: Suppliers Day, International Procurement Day and trainings in human rights for purchasers.

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 to 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.

The Group’s buyers also take part in international working groups on responsible procurement. Total is an active member of 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.

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 2018. 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 (refer also to the “Employment and social inclusion” section).

 

Payment terms

The payment terms for invoices from suppliers and customers of TOTAL S.A. as of December 31, 2018, in application of the provisions of Article D. 441- 4 of the French Commercial Code, are as follows:

 

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