Challenges (GRI 103-1)

Supply chain management is a key factor for sustainable business operation. CKPower recognizes that good supplier management results from efficient economic, social, and environmental management.
As such good supplier management not only demonstrates the Company’s social and environmental responsibility, but also strengthens relationships and creates value for all companies in the supply chain. In addition, decreasing of supplier risk presents a challenge for the Company as it has to manage its supply chains efficiently in order to minimize impact on the business and promote mutual growth for itself and its suppliers across the supply chain.

EXECUTION (GRI 103-2)

CKPower has established the Supplier Code of Conduct to promote commitment to sustainable business practices that take into account the environment, society, and governance as well as to serve as guidelines for suppliers on compliance with laws, regulations, requirements, and international standards. The code of conduct also encompasses business ethics, labor and human rights, occupational safety and health, work environment management, as well as responsibility towards communities and society.
In addition, CKPower has established supply chain management strategies encompassing potential supplier selection all the way to supplier risk and performance assessment as well as encourages suppliers to conduct business with transparency, consider human rights and fairness in their labor practices, and comply with occupational health and safety and environmental standards.

Supplier Code of Conduct

Supplier Code of Conduct
Business Ethics Human Rights and Labor Safety and Occupational Health Environment Social Responsibility
  • Corporate governance
  • Equitable and fair treatment
  • Intellectual property
  • Disclosure and confidentiality
  • Delivery and quality of products or services
  • Legal compliance
  • Non-discrimination
  • Labor protection
  • No use of forced labor
  • Remuneration, benefits, and work hours
  • Workplace safety and environment
  • Personal protective gear
  • Emergency preparedness
  • Compliance with state environmental laws and regulations​
  • Implementation of corrective and mitigation measures for environmental impact
  • Advocacy for efficient use of natural resources among employees
  • Consideration of impacts on communities and society in business operations
  • Respect for local cultures and traditions
  • Contribution to community and social development

Sustainability Practices for Suppliers

In 2018, CKPower began working on supplier sustainability assessment by creating questionnaires, formulating guidelines, and defining its assessment guidelines and procedure. The Company began conducting supplier sustainability assessment as well as prescribed an additional goal of conducting on-site audits to ensure that suppliers operated in compliance with the supplier code of conduct. CKPower also strives to continuously improve the supplier sustainability assessment to ensure its consistency with its sustainability policy.

New Vendor Selection New Vendor Evaluation
CKPower has prescribed new vendor evaluation with criteria covering sustainable topics in economic, social, and environmental dimensions, such as product and service warranty, product delivery, environmental policies and social responsibility, compliance with labor laws, and safety standards. At the same time, the Company also actively and continuously promotes and communicates its supplier code of conduct to all suppliers. As part of vendor selection, CKPower screens vendor candidates by evaluating their qualifications based on criteria covering environmental practices and social responsibility, product and service quality, delivery, experience, product warranty, safety standards, and legal compliance.
Critical Supplier Analysis

CKPower classifies its suppliers into two major categories: critical suppliers and non-critical suppliers, to allow it to systematically analyze and formulate procurement strategies and assess supplier-related risks effectively.

Ratio
Critical suppliers: Suppliers with high-value contracts or high spending who supply hard-to-replace products and of components or devices vital to the manufacturing process. They present very high or high risks. 10%
Non-critical suppliers: Suppliers with moderate- or low-value contracts who present moderate or low risks 90%

Supplier Performance Evaluation and Monitoring

Supplier performance or efficiency evaluation is based on a set of criteria and CKPower’s Supplier Code of Conduct and enables the company to collect data related to the capabilities of its suppliers across governance, social, and environment. Three types of supplier performance evaluation are conducted: yearly performance evaluation, mid-operation performance evaluation, and on-site audit.

Suppliers with low performance or failing to pass the evaluation will be suspended temporarily or removed from the approved vendor list. The evaluation is based on the site audit checklist. CKPower assists suppliers in resolving their issues and works with them to enhance their potential in order to increase their business capabilities.

Supplier Risk Assessment

CKPower has implemented supplier risk assessment to identify potential impact on its business in accordance with the criteria it has defined, which cover three key social related areas, namely governance, social, and the environment and include such topics as business ethics, labor treatment and human rights, occupational health and safety, workplace environment management, and social responsibility.

Trade Credit

To manage risks related to payments from its customers, CKPower offers a credit term of no more than 30 days for its suppliers as it has deemed that credit risk will rise significantly if the payment is made after 30 days as specified in contract terms. In 2021, the average actual credit term was 20 days, which was consistent with the Company’s policy.

Strengthening Supplier Relationships (GRI 204-1)

CKPower seeks to strengthen its relationships with suppliers through a diverse range of training programs, seminars, and activities through which it can communicate its business approaches, policies, and practices to its suppliers for their acknowledgment, such as Safety Week 2020.

Safety Training for Suppliers

Nam Ngum 2 Power Company Limited conducted a training program on the topic “Operational Safety Training for Nam Ngum 2 Dam Suppliers” for 23 non-critical suppliers, in order to educate them on power plant work safety, rules, and regulations, instill safety awareness, and provide information on environmental measurement as well as ensure that the suppliers were aware of the Company’s business guidelines, policies, and practices. As a result, 100% of the participating suppliers were equipped with knowledge on power plant work safety, and the rate of accidents in the power plant was effectively reduced. In 2021, zero case of loss-time injury was reported among the power plant’s employees and its suppliers.

Green Procurement Program

Placing importance on environmental conservation, companies under CKPower Public Company Limited have instituted a green procurement policy that encourages eco-friendly procurement practices and promotes the use of products made from renewable resources and non-polluting products, such as those certified with the Green Label, in an effort to protect the environment, use resources sustainably, reduce risks to employees and the Company from exposure to hazardous materials, instill green consumerism within the organization and society at large, and reduce costs through sustainable and cost-effective consumption.