Itaipu’s chain of suppliers consists of companies of all sizes, being approximately 32% material suppliers and 72% service providers concurrently. Of the total, 14% of suppliers of both materials and service providers. In 2015 there were 1,141 registered suppliers, of which 599 are considered local suppliers by the company, as they are located in the State of Paraná.

Because of the binationality, the purchases are made through its own rules – the [+] General Tender Regulations (NGL) . The location of the supplier may not always be required as a condition for participation in tenders, which does not prevent that in some cases local suppliers to be selected in the quote process (small value purchases, for example). To give preference to contracts with micro and small enterprises, totaling 865 registered suppliers, throughout the year it was bionationally discussed the implementation of the Procedure Instruction 21 (IP 21), to be approved in 2016.

Itaipu assessed the risks to the sustainability of 100 supplier groups, 50 of which supply goods and the others providing services. The mapping identified 5 critical objects in providing services, 10 in providing materials and 434 suppliers as critical, and 200 as micro and small enterprises. The risk is calculated based on the Sustainable Procurement Policy that considers impacts on society in the selection of 100% of suppliers of priority objects, such as the reduction of waste generated, reducing the emission of greenhouse gases, energy and water consumption, reducing the use of toxic products (mitigating harmful spills to the environment), the promotion of gender equality, inclusion of micro and small enterprises, the efficiency of the supply logistics process (transport included) and the option for regional supply promotion.

Through the Sustainable Procurement Program, which has as one of its objectives the inclusion of sustainability criteria in procurement of goods and services, Itaipu acquired and monitored the supply of 33 objects, 14 materials and 19 services. For the year, contracting with sustainability criteria amounted to 6.71% (78 suppliers from a total of 1,162 who contracted with Itaipu) and 4.59% of total purchases (of 6,531 items purchased, 300 obeyed environmental requirements).

There are 93 processes qualified as “sustainable purchasing” category representing 11% of the entity’s acquisitions portfolio. Since December 2014, over US$ 27 million were purchased in a sustainable way.

For engagement of suppliers, Itaipu launched in 2015 the Involvement Project, whose goal is to help suppliers to assess the impact of their business and enable them to be able to meet the sustainability criteria by the binational, as well as understand the reason and the importance of these new clauses in the contracts.

All suppliers are subjected to impact assessments on human rights, through the Supplier Evaluation System, which analyzes the contract based on the ISO 14000 and 26000 standards, OHSAS 18001, SA 8000 and Women Empowerment Principles (WEPs). In 2015, 1,162 suppliers were evaluated and no real significant risk or potential violation of rights has been identified. Another way to identify possible risks is through life cycle or sustainability risk analysis, made through Sustainable Procurement Program for each product or service and contract terms are drafted to mitigate them.

Although Itaipu does not act directly in monitoring possible human rights violations in the supply chain, contract managers monitor compliance with the clauses for the provision of the service or supply, and contractors need to submit salary payment vouchers and other charges. Failure cases may be reported to the Ombudsman and if proven, administrative procedures are implemented to contract termination, suspension of the right to contract with Itaipu for 12 months, and application of appropriate measures in the labor courts and the Ministry of Labor.

100%
of suppliers are selected based on criteria that ensure human and labor rights.