Procurement Policy. 2.1 Mosaic and all its North American subsidiary companies.

Transcription

1 1.0 PURPOSE 1.1 This Procurement Policy ( Policy ) is intended to govern the conduct of The Mosaic Company and its subsidiaries ( Mosaic or Company ) and its Partners when doing business with Mosaic. 2.0 SCOPE For the purpose of this Policy, a Partner is defined as a company or person who provides, and receives payment for, goods and/or services for any aspect of Mosaic s operations including but not limited to development, construction, operations, reclamation, consulting, and outsourced activities. At Mosaic, our sourcing model combines centralized selection of preferred Partners with buying activity primarily administered at the local level of our production locations. 2.1 Mosaic and all its North American subsidiary companies. 2.2 This Policy covers the procurement of all goods and services by the Company, whether through purchasing, leasing or other means and any related business conduct on behalf of Partners and employees. The phrase purchasing organization includes designated purchasing, strategic sourcing, stores, buying, invoice receiving and materials management employees throughout the Company. 2.3 Partners include all third parties that Mosaic engages in procuring goods or services. Partners include, but are not limited to, contractors, consultants, and other outsourcing providers. Partners may be classified as either strategic, value added, or transactional. 3.0 POLICY 3.1 Mosaic s conduct of business around the world is guided by its commitment to operating in a socially responsible manner. Mosaic is committed to bringing long-term sustainable benefits to the communities where it operates, and fostering a culture of excellence Procurement General Policies and Procedures Page 1 of 18

2 and collaboration among its employees. By upholding its core values, Mosaic earns the trust of its stakeholders and creates shared value. Partners are requested to review Mosaic s Code of Business Conduct and Ethics. Mosaic s Partners are expected to support Mosaic s global social responsibility initiative through the application of this Partner Code of Ethics. This commitment means that Mosaic and its Partners share a common set of objectives and benefit from the achievement of those objectives. This Policy has been designed to help Partners understand their responsibilities and to create an awareness of the business and ethical standards that they must follow in their business dealings with, or on behalf of, Mosaic. Mosaic s values are grounded in concepts of integrity, honesty and the highest ethical standards. Partners are required to follow these standards. Partners must comply with all applicable laws, rules and regulations in every jurisdiction in which they do business with, or on behalf of, Mosaic. Local laws may in some instances be less restrictive than the principles set forth in this Code. In those situations, Partners are expected to comply with this Code, even if the conduct would otherwise be legal under applicable laws. If local laws are more restrictive than this Code, Partners are expected to, at a minimum, comply with applicable local laws. Partners must be committed to creating safe working conditions and a healthy work environment for all of their workers who provide goods or services to Mosaic. Partners should implement an effective and efficient safety program. Partners should anticipate, identify, and assess emergency situations and events and minimize their impact by implementing emergency plans and response procedures. Onsite Contractors should comply with all specific requirements regarding recording and reporting safety information as necessary. See Specific Safety Policies: Procurement General Policies and Procedures Page 2 of 18

3 Mosaic encourages its employees and Partners to support civic and philanthropic organizations and events in our communities. At times Mosaic will reach out to our partner base and invite them to participate in fund raising events and activities. Any activities our invitations relating to these events should not be construed by the partner as mandatory in any way and declination to participate or choosing to participate will not weigh in any decision to do business or not to do business with our partner. Conversely, when asked by our partners to participate in similar events in the communities we serve and live, Mosaic will make every effort to support the request to the best of our ability and consistent with our organizational priorities. 4.0 Purchasing Systems 4.1 All Mosaic purchasing of materials and services (Non-Travel related purchases) will be by one of the following systems: 4.2 Approvals SAP Purchase Order system SAP Direct Pay System (SAP Non PO) SAP emergency Check Process Maximo Purchase Order System MRO P Card System Procurement is the official Mosaic organization authorized to commit the Company to the procurement and payment of goods and services. Procurement representatives are the only individuals authorized to provide Partners with the approval to provide goods and services via an approved purchase order, with the exceptions specifically outlined in the Emergency Policy. Partners are expected to comply with the purchase order approval process and the related Emergency Policy guidelines in all instances. Procurement General Policies and Procedures Page 3 of 18

4 Purchasing approval hierarchies are established and maintained by each Business Unit location based upon individual site operating needs and within guidelines and controls established by Mosaic s Law Department, Mosaic s internal control requirements, and Mosaic s Procurement Policies and Procedures. 5.0 GENERAL GUIDELINES 5.1 Partners involved in providing goods and services are required to adhere to the following guidelines: A properly authorized purchase order is the Partner s authority to ship and invoice for the goods and services specified on the order. It also obligates the Company to pay for and warranty those goods or services in accordance with the purchase order terms of payment. A purchase order is generally a legally binding contract when sent in response to a quotation or offer from the seller unless seller objects to purchase order or its terms and conditions. If there is no quotation or offer from the seller or if the quotation or offer was made under different terms, then the Company s purchase order is generally only an offer to buy, and becomes an enforceable contract only if accepted by the seller. Because a purchase order is generally a legally binding document, it should precisely cover the essential elements, terms and conditions of the purchase in a manner, which will eliminate any misunderstanding or conflict between the Company and the seller. Purchase Orders: Require proper written or electronic approval PRIOR to performing services or delivering product to a Mosaic site. Purchase commitments will be made on a Company approved contract form or purchase order, i.e. Maximo Purchase Orders or SAP Purchase Orders. Purchase Order Numbers should not be verbally or manually communicated to Partners without the Buyer approval. Verbal or other manual means of communicating Purchase Order numbers may result in incorrect information placed on an Invoice or the wrong Partner notified for materials or services. In the event of an emergency per guidelines, after internal fiscal approval from Procurement General Policies and Procedures Page 4 of 18

5 a Facility Manager or Maintenance Manager is documented (i.e. via or system workflow), a Mosaic employee may verbally communicate authorization for goods or services IF a Buyer is unreachable and with the stipulation that a PO is created at the next earliest opportunity or next Work Day. It is the Partners responsibility to also ensure that the Purchase Order in hand is funded for the FULL anticipated amount of the goods or services to be rendered. In the event the Purchase Order is not sufficient, an approved/amended Purchase Order should be obtained BEFORE the work is completed or the goods shipped. SAP Direct Pay Process (Non PO): This process may only be used for the following and MUST have approval or meet other conditional requirements as noted: Procurement of Materials and Services at Non-Maximo supported sites that cannot be paid via MRO P-Card. All purchases of services must be with Partners that have been Pre-Qualified and met all Mosaic EHS, background check, and Insurance certificate requirements. Lease payments. Corporate Administrative Expenses that cannot be paid via MRO P-Card. Energy and utility invoices that cannot be paid via MRO P-Card Government regulatory expenses. Tax payments. Administrative expenses associated with the Plymouth offices The use of the SAP Direct Pay process is restricted to Mosaic employees. All projects >$50,000 utilizing the SAP Direct Pay Process must have the appropriate services contract executed prior to the commencement of work We expect our Partners to be qualified, reputable and financially stable to ensure order fulfillment is in compliance with pre- Procurement General Policies and Procedures Page 5 of 18

6 established pricing and commercial terms. In the event a Partner s situation substantially changes, it is the Partner s responsibility to notify their appropriate Mosaic Procurement Manager. 5.2 Partner agreements or other pre-established purchase commitments are to be adhered to in any material aspect possible by Partners for the goods or services covered by these agreements. 5.3 The Company considers relations with key Partners to be of a long-term nature and makes every effort to ensure that such relations are strong, lasting and mutually beneficial. 5.4 The purchasing organization is a matrix structure with decentralized purchasing activities conducted within the parameters of the function s enterprise wide strategy. 6.0 BUSINESS CONDUCT 6.1 Partners must be committed to the highest standards of ethical conduct when dealing with workers, other Partners, government and regulatory authorities and Mosaic. Partners must uphold fair business standards in advertising, sales, labor, and competition. Employees of Partners must act in a fair and impartial manner and should avoid both real and perceived conflicts of interest in the business they do with or on behalf of Mosaic. 6.2 Partners must disclose information regarding their business activities, structure, financial situation, and performance in accordance with applicable law and prevailing industry practices. Partners must safeguard customer information in accordance with applicable law. Partners must maintain all confidential information about or provided by Mosaic in strict confidence, except when disclosure is authorized by Mosaic or legally mandated. Procurement General Policies and Procedures Page 6 of 18

7 6.3 Mosaic encourages its employees and Partners to support civic and philanthropic organizations and events in our communities. At times Mosaic will reach out to our partner base and invite them to participate in fund raising events and activities. Any activities our invitations relating to these events should not be construed by the partner as mandatory in any way and declination to participate or choosing to participate will not weigh in any decision to do business or not to do business with our partner. Conversely, when asked by our partners to participate in similar events in the communities we serve and live, Mosaic will make every effort to support the request to the best of our ability and consistent with our organizational priorities. 6.4 Partners must respect intellectual property rights in their business dealings with or on behalf of Mosaic; transfer of technology and knowhow must be done in a manner that protects intellectual property rights. 6.5 Mosaic requires that Individuals who purchase or influence purchasing decisions on behalf of Mosaic be specifically aware of their conduct and actions in the procurement process with Partners. It is always in the best interest of the Company, its employees, and industry in general, to act in a manner which is regarded as appropriate, ethical and constructive by customers, partners, governments, and by people in the communities and countries in which the Company operates. 6.6 Information that would not be revealed between a Partner and authorized Procurement representative in the office must not be divulged under any other circumstance. Employees should refrain from personal conduct which could reflect adversely on the Company s image and avoid exposures which might injure its reputation, both real and perceived. They should make no commitment unless duly authorized in writing and which they cannot reasonably expect to fulfill. They must deal fairly, honestly and objectively with all business associates and fellow employees. 6.7 Conflict of Interest Procurement General Policies and Procedures Page 7 of 18

8 6.7.1 Partners should be aware that all purchasing personnel, employees participating in or influencing the purchasing decision and / or other employees performing the purchasing function, must avoid soliciting or accepting money, loans, credits, or preferential discounts, and the acceptance of gifts, entertainment, favors, or services from present or potential Partners which might influence, or appear to influence purchasing decisions Partners should be aware that Purchasing personnel, or those performing in a purchasing role, must avoid any personal business or professional activity that would create a conflict of personal interests and the interests of the Company. For example, purchasing personnel should not engage in any personal activities or financial interests outside the Company which might conflict in any way with their assigned responsibilities or Company policies Partners should be aware that employees having decisionmaking responsibilities pertaining to Partners or competitors shall make no substantial financial investment therein. Ownership of a Partner s stock is questionable where volume of business with the Partner is large. Partners are required to report this information to the Management of the Procurement organization It is generally permissible to conduct business with Partners owned by or which employ a friend or relative, provided the Mosaic employee involved in the transaction has no personal financial interest in the transaction or the Partner, and does not receive a bonus, commission or something else of value, directly or indirectly from the friend, relative or Partner. Transactions with Partners which are owned or controlled by relatives of a Mosaic employee must be pre-approved by the Mosaic Law Department and by Mosaic s Vice President of Strategic Sourcing. Partners should report any such relationships. Procurement General Policies and Procedures Page 8 of 18

9 6.7.5 Business Transactions with Cargill Inc. or its subsidiaries must be pre-approved by Mosaic s Law Department and the Cargill- Mosaic relationship committee in accordance with the Cargill / Mosaic Relationship guidelines. 6.8 Gifts, Gratuities and Entertainment Partners should be aware that employees should never accept at any time gifts and gratuities from Partners which fall outside the guidelines set forth in this Policy Business meals can sometimes provide the informal environment necessary to result in good communications between purchasing and Partner representative(s), and are therefore allowed under the following guidelines: The purpose of the meal is to conduct company business The occasions with any one Partner are infrequent and irregular The purchasing person occasionally pays for the meal Entertainment provided by Partners to an employee or group of employees should not be accepted unless such acceptance will benefit the Company s business interest and is documented and approved by the employee s manager The Mosaic Corporate Policy on acceptance of vendor gifts, participation in sporting activities, and attendance of vendor sponsored events is located at the following web address: s/mosaic_ss_web_resources/hr_policies_cust_entertain_gif.pdf The Company acknowledges there are occasions when memberships in organization, clubs, family relationships or vendor site visits could entail overnight stays for such activities. Any or all of these activities will require the Partner to contact the Vice President of Strategic Sourcing or Procurement General Policies and Procedures Page 9 of 18

10 Directors of Strategic Sourcing for Potash or Phosphates prior to engaging or making any offer to a Mosaic employee for any activity involving an overnight stay or extended travel. This is the approval to offer not the approval for the employee to participate Practices which may be viewed as unethical or unfair must be avoided if good Partner relationships are to be maintained and the benefits of assertive competition preserved. Such practices include, but are not limited to: Arbitrarily forcing inequitable settlements Knowingly furnishing unreliable or inaccurate information to outside contacts Disclosing confidential information to competitors Making unreasonable demands for service Threatening Partners with loss of business unless they comply with unreasonable requests Under no circumstances shall an employee engage in the above or use practices involving misrepresentation, evasiveness, or deliberate errors in order to gain an unfair competitive advantage of a Partner. 7.0 MINORITY AND WOMEN OWNED BUSINESS 7.1 Mosaic will seek out and recognize minority and women-owned business enterprises and, if possible and practical, assist these firms to become capable of supplying necessary materials and services on a competitive basis. Note: For the purpose of this Policy, a minority or women-owned firm one having at least fifty-one (51%) percent control and ownership by minority group members or women It is the Partner s responsibility to report minority or womenowned statistics on an annual basis. Procurement General Policies and Procedures Page 10 of 18

11 8.0 PROCUREMENT PRACTICES 8.1 Requisitioning Authority Any employee may request the purchase of goods or services for the Company by processing a paper, or electronic purchase requisition form. It is the requisitioner s responsibility to obtain approval of the purchase requisition in accordance with established written authorization level policy. This requisition approval gives the assigned Buyer authority to purchase the specified goods or services In operations where electronic requisition systems are used, purchase orders are generated without signed requisitions. Those operations must establish procedures, which specify under what conditions Buyer s may issue system generated purchase orders. At operations where there is no electronic requisition system available, the MRO P-Card is the preferred method for purchasing materials or services followed by the SAP Direct Payment process. (See SAP Direct Payment process in section ) Contracting Authority Sourcing Personnel are employees who have been assigned contracting authority in writing or by job description. Sourcing Personnel act as contracting agents who negotiate terms for goods or services on behalf of the Company. Sourcing personnel may sign purchase orders and contracts up to his/her authorized written contracting authority levels. Procurement General Policies and Procedures Page 11 of 18

12 9.1.2 Local Buyers, or employees performing in a purchasing role as a Buyer, may NOT independently contract for materials or services. Only Buyers (i.e. not non-procurement employees) may sign purchase orders up to his/her authorized written authority levels for materials and services listed in the index of the company s Corporate Agreement Listing and are to be used by the company s locations in accordance with the agreed upon account contract terms and conditions Local Buyers, or employees performing in a purchasing role as a Buyer, may not independently contract for materials or services, which are included in Corporate Purchasing Department programs unless contracting authority has been delegated to them by the VP of Purchasing. The materials and services listed in the index of the company s Corporate Alliance Agreement Listing are contracted by the Strategic Sourcing Managers and are to be used by the company s locations in accordance with the agreed upon contract terms and conditions. 9.2 Receiving Authority All locations will designate persons to properly receive delivered goods and services. The receiving function will be accomplished in accordance with paragraph 9.9 below. 9.3 Requisitioning Requisitions are required for all transactions covered by this policy except for authorized procurement card transactions and the SAP Direct Pay process. A requisition must identify when goods or services are needed, where they should be shipped, their intended use, and a complete description of the goods and services including supporting drawings, specifications and any other documents needed to describe the purchased items The requisitioner is responsible for: Procurement General Policies and Procedures Page 12 of 18

13 Determining the specific scope of work including the quantity of goods and services required. Providing and assuring the accuracy and adequacy of physical specifications and when applicable, the performance specifications and acceptance testing procedures for the goods being ordered Setting forth the deliverables that must be provided by the Partner of services Determining the appropriate delivery date Specifying the end use application Identifying the appropriate accounting strings for Accounts Payable use (e.g. company code, plant, cost center, and GL account) Providing any other information necessary to support the requirements of the purchase Completing the technical portion of the competitive bid evaluation Obtaining the appropriate approvals required Specifying any pricing mechanisms and/or mark ups for pass through costs The Buyer, or employees performing in a purchasing role as a Buyer, is responsible for: Assisting the Requisitioner in final determination of: o The correct order quantity o Appropriate specifications o The scheduled delivery date o Final pricing methods Completing the commercial portion of the competitive bid evaluation, Assuring that requisitions are properly approved and that the requisition has sufficient information to initiate the purchase, and Determining the proper source of supply, current purchase price and other terms and conditions of the purchase, are consistent with the established written Procurement General Policies and Procedures Page 13 of 18

14 9.4 Purchasing authorization level policy Purchasing is the responsibility of Buyers, or employees performing in a purchasing role as a Buyer, who have been assigned contracting authority in writing in accordance with the authorization level policy. The Buyer s responsibilities include: Providing budget and planning information as requested, for goods and services they purchase. Maintaining the agreed upon bidders' list: o Conferring with line and staff managers to establish a list of qualified bidders. o Independently adding qualified bidders to the bidders' list if doing so will benefit the Company. Pursuing the most competitive available price, service and quality for the goods or services to be purchased. Soliciting bids in accordance with competitive bidding policy requirements. Competitive bids will be controlled by the Buyer in a manner to safeguard bid integrity. Evaluating bids by working with bidders and with the appropriate engineering, technical and operating personnel to ensure all bids are understood and consistently provided in accordance with pre-defined bid instructions. A bid analysis will be conveyed with the requisition when it is submitted for management approval. Acting as the negotiating representative of the Company. Preparing the Purchase Order or Contract including: o Documenting required contract specifications (These specifications are to be initiated by the responsible engineering, technical, or operating personnel, during the requisitioning process and are to be reviewed and updated by them during contract preparation.) o Obtaining legal review for all contracts, in accordance with policy Procurement General Policies and Procedures Page 14 of 18

15 o Obtaining other appropriate staff reviews o Ensuring all commercial terms and conditions, standards of quality and specifications are included in the purchase order. o Making sure there is a clear understanding with the Partner as to price, duration of order, quantity, etc. o Appending to purchase orders for construction, services or installation work on the company s premises other such documents as deemed necessary (e.g., standard terms and conditions). Processing purchase order revisions and contract amendments in a timely manner and ensuring full understanding of the impact to the scope and price of the project; approving purchase order revisions and contract amendments that require the same levels of approval, at a minimum, as the original approval levels obtained. Ensuring that provisions are made for receipt and payment of invoices and closeout and retention of the purchase order or contract Types of Contracts All materials and services except those authorized for procurement card purchase will be ordered either on the company s standard purchase order, a blanket order, or on a formal contract. The selection of contract documents must be made based on the dollar amount of the purchase and the risk associated with the purchase as follows: Purchase Order - This document will be used for all purchases of goods and services regardless of dollars. (Exception for Travel Services and MRO Procurement Card purchases). Contract - This document must be used at a minimum for the purchase of all construction services, and goods Procurement General Policies and Procedures Page 15 of 18

16 Legal Issues and services in excess of $250,000 for services and/or $1,000,000 for equipment. Blanket Orders - This type of order can be an efficient way to purchase repetitively used items. Blanket orders may be written on a regular purchase order form. The Buyer must make sure there is a clear and precise understanding of the price, duration of order, quantity, etc. set forth in the blanket order. Approval and renewal must be reviewed annually in accordance with policy. Contract Change Orders: All changes to a Contract which include pricing, scope, timing or any other material change to the contract language MUST have a pre-approved Contract Change Order before the work change activity commences. Change Orders must be signed by the Contractor, Project Manager, and Buyer or Purchasing Manager. The Buyer is responsible to ensure that the Change Order is properly communicated and filed with the contract documents. (See Contract Change Order form) A properly authorized purchase order is the Partner s authority to ship and invoice for the goods and services specified on the order. It also obligates the Company to pay for and warranty those goods or services in accordance with the purchase order terms of payment. A purchase order is generally a legally binding contract when sent in response to a quotation or offer from the seller unless the seller objects to purchase order or its terms and conditions. If there is no quotation or offer from the seller, or if the quotation or offer was made under different terms, then the Company s purchase order is generally only an offer to buy, and becomes an enforceable contract only if accepted by the seller. Procurement General Policies and Procedures Page 16 of 18

17 9.5 Receiving Because a purchase order is generally a legally binding document, it should precisely cover the essential elements, terms and conditions of the purchase in a manner, which will eliminate any misunderstanding or conflict between the Company and the seller Receiving and acceptance of materials is to be handled in departments or by individuals responsible for receiving (i.e. Warehouses, Stores, Service receivers) In the event material or services are delivered to non-warehouse employees (i.e. field deliveries), the Partner is expected to provide the properly validated documentation to the warehouse or other designated site location at the time of delivery RECORDS AND REPORTS Invoice and Payment Processing 10.1 Mosaic expects Partners to invoice based on a properly approved purchase order and other related agreements. Final clearance of a partner s invoices must be based on properly approved receiving documents, invoice payment authorizations (i.e. Work Approval Form), and all required supporting documentation Partners are expected to invoice in a timely manner and work collaboratively with Mosaic s Accounts Payable functions to ensure appropriate account management Mosaic encourages all Partners to enact the ACH form of direct cash payment Compliance 11.1 The Partner Code of Ethics standards can only be met with the Partner s cooperation. Through the efforts of Mosaic s Partners, the Partner Code of Ethics will set the standard for others to follow. If a Partner has their own code of ethics policy, they should provide Procurement General Policies and Procedures Page 17 of 18

18 Mosaic with a copy of the policy. All Partners must complete the certification process described below Certification 12.1 Effective March 31, 2009, and again every two years, all Partners must review this Partner Code of Ethics and complete a declaration that they have understood it and agree to fully comply with its provisions. In addition, Partners must review Mosaic s Strategic Partner Ethics Policy and complete an online or hard copy declaration that they are aware of all its provisions. Partners should also complete a self-assessment survey at either an online portal linked to a global database located at or submit to the North American Strategic Sourcing address at: vendor.strategicsourcing@mosaicco.com. These declarations and scorecards will be kept on file by Mosaic. In case of noncompliance, Mosaic may collaborate or assist Partners to become compliant. Mosaic reserves the right to stop dealing with Partners who fail to comply with this Policy Waivers 13.1 Waivers of this Policy may only be granted by Mosaic s Vice President of Strategic Sourcing and/or Vice President of Commercial Supply Chain Distribution 14.1 The North America Procurement Organization is responsible for communicating this Policy This Policy will be located on the Mosaic intranet and Internet sites. Procurement General Policies and Procedures Page 18 of 18