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+ Corporate responsibility
strategic alliance building, internationalisation,
strong product development, global
customer support and continuous improvement
programmes.”
Some 84% of KONGSBERG’s revenues
come from international markets, giving
the company confidence in international
expansion. The Group has a strong foothold
in the Far East, having long-standing
relationships with several leading shipowners
and shipyards in Singapore, South
Korea and China.
ETHICAL SUPPLY CHAIN MANAGEMENT
As part of its efforts to enhance its competitiveness
and value creation, KONGSBERG
has developed an ethical supply chain
management programme. Nils Molin,
KONGSBERG’s Corporate Social
Responsibility (CSR) Manager, explains,
“Our growing international initiatives and
growth expose us to new, more obvious
challenges related to human rights, labour
rights, corruption and environmental and
climate issues, either directly through our
own operations or indirectly through our
value chain. This means that we continuously
strive to ensure that we comply with
international guidelines and our own
guidelines in these areas. This programme
runs in a parallel with our anti-corruption
programme managed by our Compliance
Department. Together, these two programmes
have been given top priority.
“We are affiliated with the UN Global
Compact initiative and have decided to
use the intentions embodied in the ILO
conventions, the OECD’s Guidelines for
Multinational Enterprises and the UN’s
Universal Declaration of Human Rights
as the basis for our CSR work.
SIGNIFICANT RISK
“Inadequate compliance with the said
principles in the supplier chain, whether
in the first link or further down the chain,
may translate into significant risk for
KONGSBERG in terms of the quality of
deliveries and the Group’s reputation,”
emphasises Mr Molin. “In addition, it is
our genuine conviction that good working
conditions and environmental practices
are positive in the long term for our business
as well as for our business associates.”
KONGSBERG hired DNV to assist in the
development of its ethical supply chain
management programme. Its cooperation
with DNV goes back many years and mainly
involves work relating to the maritime
segment. DNV has also assisted the Group
with environmental reporting and, more
recently, its climate strategy.
“We know the people at DNV and we
know that they stand for quality. That’s
why we chose them for the project involving
CSR in the supplier chain,” says Mr
Molin. “We know that DNV has good experience
and expertise in this field, given the
work they have done for other companies.”
The project will develop a strategy to systematically
identify and manage corporate
responsibility risks in the Group’s supply
chain. This includes establishing supplier,
monitoring and auditing performance,
engaging high-risk suppliers to improve
practices, and setting up an internal organisational
structure to manage the Group’s
supply chain activities.
SUPPLIER CONDUCT PRINCIPLES
“To clarify the Group’s sustainability
expectations vis-à-vis suppliers, we have
developed Supplier Conduct Principles.
These principles cover a wide range of
issues such as human rights, labour standards,
the environment and anti-corruption,
and are based on international standards
in the area,” explains Mr Molin.
The project is one of the Group’s official
CSR targets and has been reviewed and
approved by the Board of Directors. The
project is also firmly anchored in the corporate
executive management and in the
various management groups in the business
areas.
NEW FIELD…NEW EXPERTISE
“The importance of providing information
and anchoring the processes at the
management level and with all those
involved on the operational level cannot
be overestimated,” says CEO Mr Qvam,
who adds: “This is a new field and it calls
for new expertise and new routines, meaning
that the process may engender some
uncertainty in the organisation. It can
also be a challenge when results are not
directly reflected in improved earnings but
rather in reduced risk and better quality
deliveries, both of which are more difficult
to measure. By the same token, it is important
that this work is implemented in existing
processes and that we set goals, review
reports and ensure follow-up at management
level. Full management support is
crucial to success.”
According to Mr Molin, one of the
main points relative to the Group’s work
on CSR challenges in the supplier chain
is the individual supplier’s willingness to
make improvements. “We don’t expect all
suppliers to comply with every single one
of our supplier conduct principles from
day one, but we do expect each supplier
to demonstrate a willingness to redress any
non-conformity found and to participate
in systematic improvement work. It is still
early days for this programme. During the
first year, we plan to take many small but
important steps and then re-evaluate the
entire process as we go forward.”
“Our business backbone is first and
foremost a high market standing. We are
operating with credibility and we work
with credible suppliers. This has and will
support our comprehensive portfolio of
products and strategic business alliances,”
concludes Walter Qvam.
40 – no 01 2012