Repsol

Suppliers and contractors

In 2010 we strengthened aspects relating to ethics and human rights in the revision of Repsol's purchasing and contracting policy.

Repsol's supply chain policies and management system ensure the integrity of our relations with suppliers and contractors. Our contractors are required to meet internationally-recognized standards such as the United Nations Universal Declaration of Human Rights and the International Labor Organization (ILO) Declaration on Fundamental Principles and Rights at Work.

Performance indicators

We oblige all suppliers and contractors, before embarking on any commercial relationship with us, to pass a qualification process in line with the level of criticality of the goods or services they hope to provide. This criticality level determines the strictness of the rating process. In 2010 we increased from three to four levels of criticality, called Very Low, Low, Medium and High.

Supplier and contractor rating processes
	2008	2009	2010
Suppliers of goods:
Qualified	128	1,329	1,858
Provisionally qualified⁽¹⁾	22	5	36
Not accepted	18	76	96
Service contractors:
Qualified	362	2,451	3,190
Provisionally qualified	55	35	143
Not accepted	73	279	285

[1] On some occasions, a supplier may be “provisionally qualified” where it is found that they fail to comply with a minor requirement, which prevents them from acquiring “qualified” status. This is a temporary situation that it should be possible to remedy within a short period.

Repsol's purchasing and contracts policy requires audits to be carried out on suppliers whose activities are of high criticality. In 2010, 798 audits were carried out in 13 countries.

Audits on contractors and suppliers	2008	2009	2010
Total number	647	967	798

Over the course of 2010 we obtained goods and services from 24,077 suppliers in 79 different countries.

Evolution of purchasing and contracts (million euros)⁽¹⁾	2008	2009	2010
Total purchases	8,572	6,251	7,565
Local purchasing	7,070	5,324	6,461
% of total	82.48%	85.17%	85.41%

[1] The difference in the purchase figures for 2008 and 2009 compared with those provided in reports from previous years is due to the fact that some orders changed slightly because of reviews carried out early in the following year.

Objectives

2010 objectives	Progress on 2010 objectives
Improve our supplier management system to report the results of our rating and audit processes applied to suppliers and contractors.	During 2010, we incorporated into our supplier system the obligation to state the reasons for a company to be denied approval to supply us. As this modification was made mid-year, we do not have significant data yet.
Complete our review of our corporate responsibility policies governing supplier management.	In 2010 we completed our review of Repsol regulations on purchasing and contracting. Ethical and human rights aspects were strengthened.

The actions to be carried out in coming years are included in the 2012 Sustainability Plan: Program 8 (Influencing our suppliers, contractors, distributors, partners and customers)