Our Relations

Supplier Relations

In order to integrate long-term supply chain strategy with broader sustainability principles, Fibria launched in 2017 the Sustainable Procurement Program (Programa Suprimentos Sustentáveis). The objective is to reach 2020 with a Procurement area recognized by the market and our stakeholders as innovative and responsible for generating economic, social, and environmental value.

For Fibria, implementing a fully sustainable Management of Procurement, in addition to the direct benefits to society, means a way of reducing negative externalities and costs caused by our operations. It is only possible to embark in this path with qualified suppliers creating a value chain that favors sustainability.

Therefore, one of the characteristics of the Program is that it is not limited to looking inside the company. To design it, Fibria’s Sustainability and Procurement teams invited representatives of 11 of Fibria suppliers, chosen based on social and environmental criteria, strategic relevance to the business, among other requirements. They participated throughout the entire process and together helped create the Program’s structure along with defining necessary actions for implementing Program priorities.

To see the indicators related to suppliers, click here to go to the Indicators Center.

Among the Top 20 Fibria suppliers, considering the volume of business, nearly 80% have had a relationship with the company for over 20 years

FIBRIA AND SUPPLIERS RELATIONSHIP GUIDE

In 2017, the main deliverable of the Program was to create a Relationship Manual with our suppliers. In it, we go beyond the scope of the Code of Conduct already adopted by the company. The Fibria and Suppliers Relationship Guide, launched in the second half of last year, expresses Fibria’s expectations and commitments regarding its partner’s in the supply chain, seeking not only to align practices, but also to identify opportunities to evolve and become more sustainable.

Two-way commitments

The Fibria and Suppliers Relationship Guide is based on the belief that a set of best practices such as developing suppliers, ensuring transparency in actions, consolidating values, and fostering joint initiatives – ultimately mobilizes a business strategy to put into practice the creation of shared value with society.

The document was created together with suppliers which allows for a two-way approach: in one direction, it spells out Fibria’s expectations about the work and operations of its partners – who must comply with local legislation, adhere to best market practices whenever possible, and work toward engaging those practices in their own chains. In the other direction, the Guide also captures the expectations of the partners toward Fibria, brought by the group of 11 suppliers who participated in its development and others that responded a survey.

The Guide consists of five sections dealing with Integrity in Business Relations, Decent Worker Relations, Environmental Protection, Human Rights and Social Involvement, and Management Systems. Once launched and distributed, Fibria worked on internal and external supplier engagement, followed by a few on-site supplier audits based on the Guide to identify points for improvement.

A survey conducted at the end of 2017 saw progress in topics covered by the Guide in the first half of the year, including Fibria’s communication strategy and with suppliers during negotiation.

For its initiative to make management of procurement more sustainable, Fibria received, in 2017, the ECO Award from Amcham Brazil (American Chamber of Commerce Brazil), for the Sustainability case in the Supply Chain, which highlights the Sustainable Procurement Program accomplishments. Other examples covered in the same case are the Prodfor supplier development programs in Espírito Santo state, and PQF in Mato Grosso do Sul state, and the Sustainability & Compliance Working Group created for the Horizonte 2 project, also in Mato Grosso do Sul state.

SUSTAINABILITY & COMPLIANCE WG IN TRÊS LAGOAS

Fibria introduced through its own initiative a new element in the Critical Analysis of the Project methodology, used to monitor the progress of project Horizonte 2, which refers to the construction of the new pulp production line in Três Lagoas (Mato Grosso do Sul state). The Sustainability & Compliance Working Group was formed by 80 suppliers and representatives of Fibria address these two issues in the project’s day-to-day routine and in the quarterly Critical Analysis meetings.

The Working Group was responsible for mapping risks in three broad areas – Social Risks, which include labor, operating risks, and impacts on communities; Environmental Risks, including waste disposal, biodiversity, energy, emissions, and water; and Compliance Risks, such as image and reputation, regulatory, integrity, and anti-corruption laws.

Once the risks were mapped, the WG outlined action plans capable of mitigating these risks and continued to monitor the evolution of the results integrated with the activities of the Critical Analysis meetings. At the end of construction phase of the new mill and the beginning of its operation, no environmental fines or interdiction for child, slave, or compulsory labor were received. This is relevant for a project that mobilized 40,000 people, had 8,700 workers in activity at the same time at its peak.

e-PROC Fibria

Fibria In September 2017, Fibria implemented a cloud-based supplier business transaction portal named e-Proc Fibria. Through the bid module on the platform, suppliers, before opting to participate in a specific bid, must indicate whether they agree with the general Terms & Conditions that express Fibria’s position statement on sustainable procurement practices. In addition, the company electronically receives the business proposals of its suppliers, which can be accessed only at the end of each process.

In this respect, the new platform represents a step forward in terms of compliance, increasing transparency and safety of the process, and makes the transactions between Fibria and its suppliers more practical. The evolution of the procurement system reinforces the Sustainable Procurement strategy and Program.

INFORMATION TECHNOLOGY

In terms of Information Technology (IT) applied to Fibria’s processes, in 2017, the company initiated, upon request of the Board of Directors, a study on threats to its systems’ cyber security and began preparing for possible attacks. Another ongoing demand concerns adopting IT innovations. Special attention is being given to the development of criteria that ensure the adoption of the most up-to-date technology that is more in line with the needs of the company’s business.

RESULTS OF OTHER PROGRAMS

Fibria has in place other programs to expand and improve the relationship with its suppliers. Here are the results for 2017.

  • Prodfor (Supplier Development Program): through this program, in place at Fibria in Aracruz (Espírito Santo state) for over 10 years, 650 companies were certified and created close to 58,000 jobs, with an estimated monthly income of BRL 3,000, approximately 50% higher than the average income in Aracruz, for example. On average, these local companies increased their sales by 78% in the first year after receiving their Prodfor certification.
  • Advanced PQF (Supplier Qualification Program): Inspired by Prodfor’s success, Fibria launched the Advanced Supplier Qualification Program (PQF) to develop local suppliers in Três Lagoas in 2010. Through the Program, 166 suppliers were certified, of which 126 are current Fibria suppliers.

The following chart shows the evolution of the number of suppliers certified in Prodfor and PQF:

  • Suppliers i9: An entrepreneurship and innovation program focused on our suppliers. In 2017, six suppliers participated in the program, and 258 innovative ideas were generated. The program will continue to grow to include employees from other suppliers in 2018, in order to capture the greatest possible number of suggestions for optimizing Fibria’s processes through the outside view of third parties involved in it.
  • Approval and Portfolio: assessment criteria for approval by Fibria take into account aspects such as social and environmental risks, labor rights, alignment with our forest management practices, and respect for the environment. In 2017, a total of 440 suppliers were approved in the process, in a supplier base formed by 939 approved suppliers.
  • Services hiring committee: sets out the guidelines and ensures consistency in hiring permanent services deemed critical by Fibria. In 2017, a total of 19 processes were registered by the Committee, representing BRL 279 million in the year.