Supplier Chain Management

With a purchasing practice that prioritizes the hiring of local and regional suppliers, AMAGGI seeks to contribute to the development of the regions where it operates.

The management of all AMAGGI suppliers is based on internal rules and procedures approved by the Executive Directory. All supply contracts have specific clauses regarding respect for human rights, such as the non-exploitation of child labor, degrading or in a condition analogous to slavery, and a specific anti-corruption clause.

The contracts also include clauses on labor and social security obligations that preserve the health and safety of the professional, such as the use of personal protective equipment (EPI) and training and awareness-raising practices on these issues.

To ensure compliance with these requirements, AMAGGI establishes partnerships only with suppliers that have an agreement or collective work convention. Currently, the greatest risk of occurrences of this nature is in Mato Grosso, where most of the company's units are located.

SUPPLY CHAIN ​​MAPPING G4-12

In their supply chain, rural producers - around 4,000, including purchasers of inputs - are AMAGGI strategic partners, essential to the company's growth plans. Therefore, the company offers several actions to support this public, based on its Environmental Policy and its Global Positioning of Sustainability. These initiatives seek to promote responsible agricultural production, stimulate producers in good agricultural practices, contribute to the socio-environmental development of rural properties and improve the quality of life of the communities where the properties are located.

AMAGGI Responsible Chain Management Program, in addition to the veto criteria, which prevent it from commercialize with the producer, provides two principles that foster sustainability: encouraging sustainable agriculture and combating illegal deforestation. So, projects and partnerships to encourage responsible production by producers are signed annually to promote the Business Principles for Food and Agriculture, of the United Nations Global Compact, as well as the fight against illegal deforestation.

These suppliers are divided into subgroups:

Large properties;

Medium properties;

Small properties;

Producers certified by A.R.S., RTRS and ProTerra.

Divided into product categories and local, regional, national and international locations, in 2016 AMAGGI contracted 5,843 suppliers of inputs, within the following subgroups:

Construction companies: companies contracted mainly for the construction and / or renovation of warehouses, small hydroelectric stations, factories, ports and other industrial facilities;

Shipyards: companies contracted for construction or repair of vessels and barges;

Service providers: companies contracted to provide services in general (transport, customs clearance, maintenance, cleaning, leasing, etc.);

Suppliers of equipment: companies that provide dryers for warehouses, furnaces, silos and materials for vessels (motor, propellant, housing, communications, kitchen) and for small hydroelectric stations (turbines, electric motors, etc.);

Other: suppliers of stationery, hygiene, cleaning and food.

Among the above categories of suppliers, contracts were signed with 1,283 of them, and all contracts contain the standard clauses of the company with socio-environmental requirements.
The main trading partners considered socially and / or environmentally critical by AMAGGI, as detailed in internal procedure, are divided into suppliers of:

Biomass and timber of native or exotic origin;

Seedlings (nurseries);

Grains and livestock;

Products of mineral origin;

Phytosanitary products and fuels;

Construction and contractors companies;

Waste processors;

Environmental laboratory analysis services.

AMAGGI Commodities has approximately 2,900 contracts for the transportation of corn and soybean, with transportation companies of all sizes. The company's relationship with these suppliers is organized from the size of the companies:

Large and medium-sized companies: the relationship is directly with the Transport area of ​​AMAGGI headquarters;

Small and micro-enterprises: they are contracted at transportation stations or offices in Rondonópolis, Lucas do Rio Verde, Confresa, Primavera do Leste, Matupá and Itiquira, in Mato Grosso; Vilhena, in Rondônia; Paranaguá and Maringá, in Paraná; and Passo Fundo, in Rio Grande do Sul.

Suppliers’ evaluation
EN33, HR11, LA15

AMAGGI has a Supplies area, which is responsible for prospecting and requesting the evaluation of the company's suppliers. It is up to the area to research possible suppliers for the type of product and / or service requested by each area, as well as to contact these suppliers and request all relevant documentation. For the contraction of critical suppliers, AMAGGI adopts socio-environmental criteria that are evaluated jointly by the areas of Supply and Sustainability. To know the criteria and description of the required documentation requested for each type of product or service provided, click here. Concerned to grain suppliers, the evaluation criteria for acquisition is available in Promotion of sustainable agriculture.

The company also carries out the socio-environmental evaluation of the suppliers considered critical in its chain, through consultations with Ibama's public lists of embargoes and the slave labor of the Ministry of Labor and Employment, through the InPacto institute, and conference of all documentation proving agreement with the relevant legislation.

In 2016 there was a 17.5% reduction in the number of evaluations of suppliers considered to be critically important from a socio-environmental point of view. Part of this reduction was motivated by the lower need to purchase biomass, since in 2015 a strong work was done in the identification of new biomass suppliers and, in order to minimize costs with this type of input, purchases were made in larger volumes, generating inventories for the 2015/2016 and 2016/2017 harvests.

Last year AMAGGI supply area requested the evaluation of 424 suppliers considered environmentally or socially critical, according to environmental criteria, human rights, labor practices and impact on the community. Among the evaluated, 198 were not qualified, since they did not present all the supporting documentation pertinent to the type of activity developed. Furthermore, the contract was finished with four suppliers, one for missing documents for the contractual renewal; another for its inadequate working conditions during a routine inspection; and two for the absence of a valid operating license for the processing of recyclable waste.

One of the main difficulties in finding suppliers that can be approved in all the requirements demanded by AMAGGI is the suppliers´ non-regularization in the regulatory agencies. They often choose not to do this procedure because of the high cost and bureaucracy to get the license.

In 2016, aiming to engage non-qualified suppliers, AMAGGI, in an integrated work between the Sustainability, Supplies and Legal areas, developed a response letter with guidelines on the necessary procedures to become a qualified supplier of the company. This action is in the final process of validation and will be implemented in 2017, as part of the procedures of Socio-Environmental Evaluation of Critical Suppliers. The expectation is that in this way the company can stimulate its suppliers to comply with good sustainability practices.