Outokumpu Monitoring Supplier Transparency
Global stainless steel giant Outokumpu is taking actions to further develop the monitoring of its suppliers and to increase the transparency of its sourcing.
Global stainless steel giant Outokumpu is taking actions to further develop the monitoring of its suppliers and to increase the transparency of its sourcing. After the report of the Finnish NGO Finnwatch in February, the company has also decided to audit Vale, one of its ferronickel suppliers. Outokumpu President and CEO Mr Heikki Malinen said "The Finnwatch report was an important reminder of the importance of responsibility throughout Outokumpu’s supply chain. As the leading provider of sustainable stainless steel, we have set high standards for our suppliers. It is essential for Outokumpu, our customers and the overall society that our raw materials are produced and procured in an ethical and responsible manner. We are committed to further review and develop our policies, terms and conditions as well as our actions from the perspective of social responsibility and human rights, including the UN Guiding Principles on Business and Human Rights. To ensure that these requirements are met in practice, we are taking additional measures for monitoring our supply chain. In collaboration with industry sustainability experts representing our stakeholders, we are aiming to further develop the transparency of Outokumpu’s sourcing”, he continues.
After the Finnwatch report, Outokumpu and Vale management representatives have agreed on regular reviews of the situation. Outokumpu has emphasized the importance of complying with the company’s high standards and requirements set for its suppliers. Outokumpu has also decided to conduct an independent audit of Vale’s Onça Puma mine in Brazil as soon as the pandemic regulations allow a visit to the site.
The Brazilian company Vale supplies ferronickel, which is a necessary alloying element for manufacturing certain grades of stainless steel. Ferronickel, that Outokumpu is purchasing externally, makes up a part of nickel in the production of stainless steel. The use of ferronickel is being reduced by increasing the amount of recycled metal, which was 93% in Outokumpu in 2020.
In 2020, Outokumpu had approx. 9,000 suppliers. Top20 suppliers covered 80% of the total direct material spending. All Outokumpu’s suppliers are expected to act according to applicable laws and regulations. They are also expected to comply with the company’s Code of Conduct or similar standards, sign general terms and conditions, and be able to clearly define, document, and share their supply and production control processes including material traceability. Outokumpu monitors its suppliers through self-assessments, screenings, and audits. Results are discussed with suppliers and Outokumpu monitors the implementation of corrective actions. If the situation continues without progress, Outokumpu can discontinue purchasing from the supplier.