Vodafone is a global business. Suppliers and partners are an essential element in our success providing products, solutions and services, the latest innovation, supplementing our peak resource demand requirements and helping to produce results or an outcome that we cannot achieve ourselves. Each year we spend millions of dollars with a wide-ranging portfolio of suppliers. This scale gives us the power and responsibility to specify social and environmental expectations for our suppliers to meet. It also allows us to influence other companies in our sector to work together to build consistent standards for ethical supply chain management.
Vodafone does not manufacture anything itself. We source all of our IT and network equipment and handsets from third-party manufacturers. More often than not, there is a professional service offering from a suppler wrapped around these components to create the products and services we offer our customers. These suppliers are mainly large, well known multi-nationals, who themselves source components and assembled products from other suppliers.
Consequently we have high standards and place enormous trust in our suppliers. Being a supplier to Vodafone means you have particular responsibilities and formal requirements we expect you to follow. Our standard terms and conditions outline the contractual commercial elements for purchase of any standard product or service and accompany any purchase order raised. All New Zealand suppliers are subject to a qualification and approval process. This includes acceptance of the CEP and management of CR (Corporate Responsibility) issues in their own supply chain. Should a local risk assessment show any cause for concern, the supplier is required to go through the global qualification process, which involves completing a detailed self assessment before they can progress to the next stage of qualification. In line with our global process, should a supplier be identified as medium or high-risk they will be referred for an audit. In some cases a site assessment may also be necessary. The supplier will only qualify as a Vodafone supplier after all of these requirements have been met.
Our Code of Ethical Purchasing (CEP) sets out Vodafone's expectations of suppliers. CEP requirements are integrated into our supplier qualification process, to ensure that all new suppliers are aware of our expectations at the first point of contact. Vodafone's strategy is to engage directly with our first-tier suppliers and assess their compliance with the CEP. We emphasise the need for our global strategic suppliers to engage with their own suppliers in a similar way.