ENAV and the Group have pursued a procurement policy based on maximum openness to the market, both national and international, also opening up to competition sectors with very high technological specificity.
In order to fully understand and characterize the concept of “supply chain” in the ENAV Group it is necessary to emphasise that ENAV and Techno Sky’s procedures for awarding contracts are subject to the regulatory requirements set forth in Legislative Decree 50/2016 (the “Public Contracts Code”). Failure to comply with these mandatory regulations may in fact lead to serious penalties, ranging from fines to criminal charges.
Compliance with the provisions of the Code therefore significantly limits the Group’s ability to voluntarily include binding criteria in supplier selection and qualification processes. This is because, according to the law, these processes must fully comply with the principles of competitiveness and openness to the market, as well as guarantee access even to micro-enterprises. In this sense, procurement activities must primarily focus more on the objective elements of the competitors’ bids rather than on subjective requirements for them that could be considered as limit on participation.
In other words, in order to pursue green procurement policies, the reference context requires action that focuses more on the services to be tendered than on the requirements imposed on participants and the “supply chain” must interpret itself not so much and not only as certifications held by possible suppliers but rather with reference to the environmental characteristics of the services and products.
Furthermore, it should be pointed out that the ENAV Group is composed of companies that provide highly specialised services that are of strategic importance for the country, in an area subject to a series of mandatory regulations in the ATM sector and therefore it should be kept in mind that there is a need for operational specificity of products subject to specific international reference regulations
Taking into account the binding constraints that mainly consist of compliance with the EU rules incorporated into the Public Contracts Code, ENAV and the Group have pursued a procurement policy based on maximum openness to the market, both national and international, also opening up to competition sectors with very high technological specificity. The advantages of this are considerable both in terms of technical solutions with high design value, and in terms of financial savings.
It should be noted that the suppliers have responded extremely positively, rewarding processes based on a reciprocal knowledge that leads to effective collaboration based on fairness both in the pre-contract and contract stages. This is also demonstrated by the number of requests for remedies in 2018, for which there was only one appeal to the bodies empowered to deliver administrative law decisions in 2018.
The ENAV Group undertakes to purchase goods and services that during their life cycle:
- promote the use of renewable energy sources;
- reduce greenhouse gas emissions;
- reduce the consumption of natural resources;
- reduce the production of waste;
- contribute to the spread of responsible production and consumption model.
Over the last few years more and more attention has been paid to the environmental sustainability of provisioning through the implementation of a green procurement practice. This choice was made based on the desire of ENAV to reduce the environmental impact of the goods and services that its purchases and of the works that are carried out in accordance with Article 34 of Legislative Decree 50/2016, as amended by Legislative Decree 56/2017.
The ENAV Group has also undertaken action to make its green procurement practice fully visible to enable its suppliers of reference to adapt to the requirements of a more sustainable demand and to any new interlocutors to respond proactively, proposing innovative solutions that meet the renewed needs.
The green procurement practice represents, in fact, a substantial change, that is developing in a gradual and continuous way through a series of key actions:
- the selection of priority goods and services to develop environmental criteria for inclusion in the purchasing procedures;<
- the definition of a communication programme aimed at current and potential suppliers;
- the implementation of an internal awareness and training plan.
Aware of the impact that the introduction of the new internal practices would have on a whole series of business processes, ENAV performed a risk-benefit analysis related to the introduction of environmental criteria, relating to ENAV’s purchase of goods and services and works.
Based on the results of this analysis, numerous activities were carried out during the year to strengthen and enhance green procurement actions. In particular, ENAV has promoted the introduction of specific environmental requirements, whenever possible, in tenders in order to identify and encourage sustainable purchases. In this context, ENAV has, in collaboration with the various company departments, defined the technical characteristics and environmental criteria that the products, services and works purchased
must satisfy in order to be considered “green”.
Techno Sky as well, in selecting its suppliers, pays close attention to their sustainability records, considering such factors as:
- the purchase of products and services that have a lower impact on the environment based on the method of realisation (e.g., stationery, PPE, furnishings);
- CE certified products;
- verification of suppliers’ records in terms of human rights and workplace health and safety.
ENAV defined the “sustainable construction sites” objective to make the critical activities of construction and maintenance of ENAV’s infrastructure increasingly incorporate the ideas of environmental protection, the rational use of resources, attention to the use of materials, the health and wellbeing of the workers employed and, not least, the ENAV personnel who use the facilities and the end users of the services provided by ENAV.
In 2018, without prejudice to the regulatory constraints mentioned above, a process was launched to “evaluate” certain categories of provisioning based in part on environmental criteria. More specifically, as regards the civil works sector, ENAV defined the “sustainable construction sites” objective to make the critical activities of construction and maintenance of ENAV’s infrastructure increasingly incorporate the ideas of environmental protection, the rational use of resources, attention to the use of materials,
the health and wellbeing of the workers employed and, not least, the ENAV personnel who use the facilities and the end users of the services provided by ENAV.
The Group places emphasis on environmental requirements with regard to suppliers in drawing up the list of providers of civil works and of services and goods. Owing to this, in 2018 the Group submitted to 176 companies included in these categories a special questionnaire that enable it to get a better understanding of the suppliers’ commitment to environmental issues and to evaluate whether ISO 14001 environmental certifications they hold.
The survey, to which 128 suppliers responded, found that 21% of the companies included in the pool of qualified suppliers are in possession of an environmental certification.
In drawing up the list, ENAV identified these categories as the best in terms of creating and maintaining qualifications systems, based on its n-depth regulatory and management analysis1
If we consider the total value of the contracts awarded in 2018, excluding intercompany awards, amounted to €91,842,875.85, the value of the contracts awarded in the aforementioned categories through qualification systems came to €5,968,240.72. Therefore, it amounts to 6.5% of the total value of new contracts in 2018.
Finally, during the year, new clauses were inserted in the procurement contracts to encourage suppliers to comply with ENAV’s sustainability criteria. Specifically, in the contracts the company requires its suppliers to consent to be audited in part to verify, where necessary, compliance with environmental and social requirements connected with the specific performance obligations in each contract. In 2018, it was not felt necessary to perform audits involving these issues.
The ENAV Group also pays attention to identifying the main risks associated with failure to comply with regulations concerning social aspects by suppliers and sub-suppliers. In order to mitigate potential problems in this area, ENAV has included warrant clauses, countersigned by the supplier, in its contracts.
Therefore, in all the contracts signed, the supplier declares that it is aware of, accepts and complies with the Compliance Model provided for by Legislative Decree 231/2001 as well as the ENAV Code of Ethics. Furthermore, in 2018, additional contractual clauses relating to combating all forms of irregular work were introduced, including the use of child labour and the use of forced labour. In the event of failure to comply, the contract can be terminated for cause.
With regard to the assessment of supplier performance, in 2018 ENAV and Techno Sky implemented a comprehensive supplier performance assessment system, making it possible to analyse and assess, for each individual contract, the quality of the service performed and compliance with the contractual requirements.
The results of these assessments, carried out in a structured and formalised manner, entail the possible suspension of the supplier and/ or withdrawal/termination of existing contracts in the event of noncompliance.
During the year, Techno Sky’s Purchasing Department modified its standard contracts, adding specific clauses relating to the carrying out of audits, while contracts are being performed, to verify that suppliers meet environmental requirements (e.g. ISO 14001) and those for respect for human rights. For example, in verifying respect for human rights, Techno Sky requires certified proof of compliance with the right of disabled people to work (Law 68/99) and where necessary it carried out controls on compliance with international environmental standards (e.g. ISO 14001 requirements). In 2018, it was not felt necessary to perform audits involving these issues.
ENAV Asia Pacific requires its suppliers to comply with the Group’s Code of Ethics, particularly in terms of sustainability and respect for human rights. The company has also planned to adopt in 2019 a supplier verification system, using the World Check One platform, regarding issues related to human rights and forced and child labour.
On the payment of suppliers, the objective that the ENAV Group has established consists in meeting the contractually defined deadlines, subject to the verification of the regularity of all legally required documentation and in application of Legislative Decree 231/2002, which implements in Italy the Directive 2000/35/EC on the fight against late payments in commercial transactions. The Group companies pay special attention to the observance of payment terms, aware of the difficulties that delays can generate, financially, for their suppliers.
In order to meet the needs of the suppliers, the Group has concluded a factoring agreement with a financial institution which allows suppliers to submit issued invoices with recourse; in addition, payment advances may be made if properly justified.
In terms of management, approved payment orders are processed by the Treasury sector and are authorised based on the current delegation system. The accounting system adopted by the Parent Company and by the subsidiary Techno Sky to handle payment orders is the PITECO system, which is perfectly integrated with the ERP accounting system, SAP.
DAYS AVERAGE LENGTH OF TIME
FOR SUPPLIER PAYMENT
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OF TIME FOR SUPPLIER PAYMENT
ENAV ASIA PACIFIC
DAYS AVERAGE LENGTH OF TIME FOR SUPPLIER PAYMENT
1 The creation and maintenance of qualification systems seems reasonable for procurements that are repeated over time, in cost/ benefit terms it would not be worthwhile to use such instruments for purchases that must, by law, be put to tender and are made with contracts of at least three-years duration. For example, it would make no sense to have a qualification system for contracts for technological devices (radar, flight services, etc.) for which open tender procedures must be carried out every four years or more.