Introduction of the Code of Conduct is an important stage in developing a sustainable supply chain of the Polpharmа Group. Today, acting in an ethical and responsible way is a necessary and integral element of conducting business throughout the world. As a company present in international markets, we would like to actively collaborate with Suppliers to ensure the observance of the highest standards throughout the entire value chain.

The introduction of the Polpharmа Group Supplier Code of Conduct is aimed among other things at:

Harmonising requirements imposed on suppliers of the Polpharmа Group with respect to ethics, employment conditions and occupational safety, product quality, environmental protection, and conducting research.

Encouraging Suppliers to actively prevent irregularities in the above areas of operation.

Supporting Suppliers in improving the way they operate, and thus improving the quality of products and services provided (e.g. by indicating good practices, sharing the experience gained by the Polpharmа Group and other Suppliers).

The Polpharmа Group does not expect its Suppliers to incur specific costs related to the introduction of the Code of Conduct. However, we are aware that organisational changes may be needed to ensure that the suppliers’ operations are in compliance with the Code, including changes that require some financial expenditure. The scope and nature of these changes, and thus possible costs of making corrections, will depend on the extent to which actions of a given Supplier are inconsistent with the requirements.

It is worth remembering that many provisions in the Code of Conduct are identical to the locally applicable law, which means that by failing to comply with these guidelines, a Supplier may be exposed to costs in the form of financial penalties.

Moreover, application of good practices described in the Code of Conduct, such as fair treatment of employees or compliance with OSH standards, should not expose the Supplier to additional costs. Implementation of certain guidelines, in particular from the natural environment sphere, may also bring some benefits to the Supplier — e.g. in the form of cost savings resulting from reduced consumption of electricity or water. Finally, in the context of growing awareness of business with regard to the sustainable supply chain, the introduction of standards to which the Code of Conduct refers helps Suppliers build their competitive advantage.

First of all, you have to complete the questionnaire (link) that will allow you to assess the extent to which your operations comply with the Code of Conduct and demonstrate good practices in implementation of the Code. The result of the questionnaire will indicate which activities should be developed first, which activities should be introduced, and which should be stopped.

While planning the activities aimed at ensuring compliance with the Code of Conduct, it is worth answering several key questions, e.g.:

Do I comply with local law?

Which of the documents, policies or procedures that I have in place refer to particular areas of the Code of Conduct?

Am I sure that all employees are familiar with these procedures? Does following them guarantee compliance with the Code of Conduct, or maybe I should take some additional steps to ensure the effectiveness of my management systems?

Am I aware of risks associated with unethical conduct (including of and towards my own employees)?

Do I monitor compliance with requirements I impose on my suppliers and subcontractors?

Answers to these questions, together with results of the self-assessment questionnaire, will provide the Supplier with an indication of inconsistencies it is the most exposed to and of corrective actions that should be taken as priority. If the Supplier, even at the stage of initial verification, concludes that it is unable to ensure compliance with the Code of Conduct, it should contact the Polpharmа Group at the address etyka@polpharma.com to jointly develop a remedial plan.

Observance of local law is the absolute minimum that must be fulfilled by a Supplier in order to become a partner of the Polpharmа Group. However, eventually, the principles laid down in the Code of Conduct are the ones that will determine the basic criteria for selection
of the Polpharmа Group’s Suppliers, and it is therefore worth applying them as quickly as possible. Implementation of the Code of Conduct is an important step in the implementation of the sustainable supply chain (SSC) strategy of the Polpharmа Group. One of the key targets of the strategy is the mitigation of risk of non-compliance in the area of working and employment conditions, OSH, environmental protection, ethics (including corruption and frauds), as well as quality. Another equally important aspect of the SSC strategy is to build value both for the Polpharmа Group as well as for Suppliers who comply with the Code of Conduct. Observance of the law alone will not provide benefits that can be achieved by Suppliers owing to the Code, which not only specifies the requirements, but also specifies the process of continuous improvement.

All our Suppliers are required to observe the Polpharmа Group Supplier Code of Conduct.
If a Supplier has its own Code in place and cannot sign an additional document due to internal procedures, it is required to submit its Code of Conduct. Our Compliance Department then compares the requirements provided for in both documents. If the requirements provided for in the Supplier’s Code correspond to the Polpharmа Group Supplier Code of Conduct, the Supplier does not sign the Polpharmа Group Supplier Code of Conduct.

Corruption is forbidden by law in many countries, yet it is still common. Even if, as a result of risk assessment conducted by the company, corruption does not seem to pose a direct threat to its operations, it cannot be entirely ruled out that it will appear in the future. That is why we expect our Suppliers to take active measures to prevent corruption, e.g. by implementing their own procedures in this regard.

Yes. Since the firm began, we have made every possible effort to comply with the law, internal procedures and the highest ethical standards in relations with our employees and external partners. The Code of Ethics of the Polpharma Group, adopted in a decision of the Management Board of Polpharmа S.A., is confirmation of these commitments (more: http://www.polpharma.pl/en/responsibility/polpharma-group-code-of-ethics/).

For years, we have been also taking action with regard to sustainable development, including actions minimising our impact on the environment. A detailed description of our efforts is provided on dedicated social responsibility websites and in the Social Report of the Polpharmа Group (more: http://www.polpharma.pl/en/responsibility/).

No. By entering into collaboration with the Polpharmа Group, a Supplier becomes a part of our value chain; therefore, we expect our Suppliers to observe the Code of Conduct also in their dealings with other business partners.

Provision of a certificate issued by an independent certification body may constitute additional evidence of the Supplier’s compliance with criteria outlined in the Code of Conduct. If the Supplier is a holder of such a certificate, it should notify the Polpharmа Group of this fact, preferably using the form for submission of good practices. If a certification process is currently underway in your company, we also ask you to provide the relevant information — it will be a signal that you have made an effort to comply with the standard.

Irrespective of the above, the audit will include a verification of compliance in all areas
of the Code of Conduct — including those covered by the certification. Providing the auditor with documents related to obtaining the certificate will significantly speed up the process, which is another reason why we encourage you to inform us if your plant holds certificates in relevant areas.

To make it easier for Suppliers to assess the extent to which their operations are in compliance with the Code of Conduct, we have developed a self-assessment questionnaire (link). We suggest that you start the process by completing this questionnaire. Each Supplier who completes the questionnaire will receive an interpretation of results, indicating which activities should be developed first, which should be introduced and which should be stopped. The website section specially designed for Suppliers that you are visiting right now also has an educational and informative function. Depending on the needs and requirements of our Suppliers, we will gradually populate it with information on the implementation of the Code of Conduct and sustainable supply chain, and this will include information about good practices submitted by Suppliers as well.

We welcome you to stay in touch with us — send all your comments and questions regarding the Code of Conduct to the address: etyka@polpharma.com.

Yes. One of the requirements specified in the Code is to communicate its principles to one’s own suppliers and subcontractors and promote them throughout the entire supply chain. Of course, the Polpharmа Group Supplier Code of Conduct can be shared with business partners, provided that the document is forwarded in unaltered form, i.e. including all of the provisions in the Code. Regardless of this, we encourage our Suppliers to develop their own rules of conduct applicable in collaboration with their business partners.

Suppliers are the key partners of the Polpharmа Group in the implementation of the sustainable supply chain strategy; therefore we expect them to promote and verify the principles of application of the Code of Conduct by their own business partners. This can be done by visiting their facilities, obtaining relevant documentation, as well conducting a second- or third-party audit.

One of the requirements specified in the Code is to communicate its principles to one’s own suppliers and subcontractors, as well as to verify whether they are observed. Where any of the Supplier’s business partners refuses to adapt its own operations to the Code’s provisions, the Supplier should first determine what areas are affected by the non-compliance. If there is an obvious violation of the law, this should be grounds for termination of collaboration with the supplier or subcontractor. If the non-compliance occurs while orders are being processed in connection with cooperation with the Polpharmа Group, the Supplier should notify the Polpharmа Group of this fact.

First of all, by following the principles set out in the Code of Conduct and requiring the same from one’s own employees, suppliers and subcontractors. We expect the Polpharmа Group’s Suppliers to introduce standards that go beyond the absolute minimum which is the observance of local law. We also encourage you to implement good practices regarding the Code of Conduct (examples of good practices can be found, among others, on the website http://odpowiedzialnybiznes.pl/dobre-praktyki/) and broadly communicate such actions, also by informing the Polpharmа Group about them (link to the online form).

No. The self-assessment questionnaire is a tool designed as an aid for assessment of the extent to which the Supplier’s operations are in compliance with the Code of Conduct and to demonstrate good practices for the application of its provisions. If the answers given are affirmative this indicates desirable operations that will help the Supplier meet the Polpharmа Group’s criteria. If the Supplier has answered NO to most of the questions, this is a signal that some corrective actions should be taken, in particular if the non-compliance concerns critical conditions. The information contained in the questionnaire is confidential, and solely for the attention of the Supplier and the Polpharmа Group and will not be disclosed to third parties.

The self-assessment questionnaire is a tool developed by the Polpharmа Group for Suppliers as an aid for assessment of the extent to which their operations are in compliance with the Code of Conduct and demonstration of good practices for the application of its provisions. It is also a criterion of eligibility of a Supplier for cooperation with the Polpharmа Group in tender processes. Therefore, we encourage you to complete the self-assessment shortly upon receipt of the Code of Conduct. Where the result of the questionnaire indicates a need to take corrective actions, it will make sense to complete the questionnaire again only after the introduction of changes aimed at correcting the non-compliance with the Code of Conduct. The questionnaire can be completed multiple times, but no more than once every three months. The information contained in the questionnaire will remain confidential, and solely for the attention of the Supplier and the Polpharmа Group.

Audits are a part of verification of Suppliers’ compliance with the requirements of the Code of Conduct. The Audit is conducted by a local auditor, a person familiar with local law as well as social and cultural conditions. The ethical audit is usually preceded by completion of the self-assessment questionnaire by the enterprise being monitored. This allows the timeframe for the audit to be adjusted to the size of the enterprise or type of production, and enables preparation for the audit. Every ethical standard according to which an audit is conducted has its own guidelines regarding the duration of and the rules for conducting the audit. A standard ethical audit comprises 6 stages:

1. An opening meeting with the company’s representatives. During this stage, the auditor meets the top management representatives. The meeting is attended by representatives of the HR department, OSH and fire safety specialists, the production manager and employee representatives. The main areas of the enterprise’s operations are discussed and the audit plan is agreed upon and confirmed.

2. Visits to areas related to the conducted activity. The auditor verifies practices with regard to hiring children and juveniles, OSH, use of health protection measures, and fire safety. The auditor can ask employees with whom he/she comes into contact questions. At this stage, the auditor can select employees for individual and group interviews.

3. Review of documentation. The auditor reviews the selected documents concerning work time records, payroll slips, documentation related to OSH and fire safety, and the employees’ compulsory training cards. Employee files are also reviewed to confirm the employees’ age, medical examination certificates, qualifications and authorisations required for the positions held, and type of employee agreements. Files are reviewed subject to the employees’ consent.

4. Interviews with employees. The auditor selects the number of employees specified in the audit procedures and conducts short interviews concerning, among other things: working time, used personal protective equipment, alarm signals agreed upon at the plant, recent accidents at work, relationships with individuals supervising work of these employees, and relationships with the HR department. The interviews are conducted without the superiors being present.

5. The auditor’s own time. The auditor summarises the detected irregularities and the strengths and weaknesses of the audited enterprise in relation to the requirements of the standard applied during the audit. Cards detailing irregularities and recommendations regarding remedial actions are drawn up.

6. Closing meeting. During the meeting, the auditor presents the detected irregularities and emphasises good practices in place at the enterprise. The auditor submits information regarding how to proceed further with the post-audit report and irregularity cards. The auditor holds consultations regarding all of the detected irregularities so that the subsequent report does not come as a surprise for the audited plant.

In order to examine whether rules specified in the Code of Conduct are fulfilled and complied with, internal audits (carried out by qualified employees of the Polpharmа Group) and external audits (so-called second-party audits carried out by external auditors) will be conducted at selected suppliers. The type of the audit and tools used will depend on several factors, including the extent and area in which the irregularity is found. Typically, the cost of an internal audit will be borne by the Polpharmа Group, and the cost of an external audit — by the Supplier.

In order to examine whether rules specified in the Code of Conduct are fulfilled and complied with, internal audits (carried out by qualified employees of the Polpharmа Group) and external audits (so-called second-party audits carried out by external auditors) will be conducted at selected suppliers. The type of the audit and tools used will depend on several factors, including the extent and area in which the irregularity is found. The scope of audits will correspond to areas of the Code of Conduct, and their purpose will be to verify compliance of suppliers’ operations and check, among other things: treatment of employees and recruitment and remuneration practices, the manner in which the Supplier ensures safe and healthy working conditions, measures taken by the Supplier aimed at reducing negative impact on the environment, and organisation management systems. The pilot audit programme is planned for 2017, while the full launch of the audit programme will take place in 2018.