Vodafone New Zealand is part of a global business. Each year Vodafone Group businesses spend billions of dollars with a global portfolio of tens of thousands 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 equipment for our networks and the handsets we sell from third-party manufacturers. These suppliers are mainly large, well known multi-nationals, who themselves source components and assembled products from other suppliers. Vodafone's supply chain operates as a global function, ensuring greater efficiency in its spend and consistent standards across all countries. It is supported by global enterprise resource planning systems and processes with a locally based supply chain management team.
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 suppliers are made aware of our expectations at the first point of contact.
All New Zealand suppliers are subject to a qualification and approval process. This includes acceptance of the CEP and management of Corporate Responsibility issues in their own supply chain. In line with our global process, should a supplier be identified as medium or high-risk they will be referred for detailed local assessment. 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.
Vodafone's accounting systems mean that no purchase orders can be raised, or any payments made, to suppliers who have not qualified and been approved. Purchases made using company credit cards do not require supplier approval, but are typically for low-value and low-risk services such as accommodation and meals.
The purchase of TelstraClear and the need to integrate our approach to supplier management has meant that our usual approach to supplier performance management and assessment of Corporate Responsibility performance has not been as comprehensive as in previous years. We plan to address this in the coming year.
During the reporting period Vodafone New Zealand spent in excess of $1.5bn with our top 100 suppliers. 87% of that spending was with locally-based suppliers. Locally-based suppliers are regarded as those companies head quartered in New Zealand or global companies with a local office, where we pay them in New Zealand dollars.
The UK Bribery Act 2010 came into force on 1 July 2011 and applies to the global operations of all companies carrying on part of their business in the UK. It introduced the strictest legislation internationally on bribery. We have zero tolerance for bribery and have rolled out procedures to prevent bribery as part of a Group wide programme.