IRPC is committed to a strategic and sustainable supply chain management approach that prioritizes product and service quality. The company has implemented a comprehensive risk management framework addressing environmental, social, and governance (ESG) factors to align management with risk levels. This includes compliance with labor laws, environmental regulations, and quality standards, all aimed at protecting and mitigating risks that could impact product quality, delivery, and stakeholder trust.
To uphold ethical business practices, IRPC has established the Supplier Sustainable Code of Conduct for suppliers and the Purchaser Code of Conduct for employees. Both documents provide clear operational guidelines that comply with relevant laws and regulations, covering key areas such as business ethics, human rights, occupational health and safety, and environmental responsibility. IRPC requires strict adherence to these codes and extends compliance requirements to its suppliers’ suppliers (IRPC’s non-tier one suppliers), promoting sustainable values throughout the supply chain.
IRPC Public Company Limited’s (IRPC) mission is to conduct sustainable business efficiently with sound corporate governance principles for communities, society, and the environment. To effectively achieve this goal, IRPC is committed to prioritizing supply chain management and continuously developing it along with sound corporate governance principles and IRPC’s business code of conduct.
The ‘IRPC Supplier Sustainable Code of Conduct’ (SSCOC) is a crucial document establishing the following provisions as indicated in each subsection, subject to the related rules, regulations, and laws. Therefore, IRPC’s suppliers are obligated to operate in full compliance with business ethics, social responsibility, health, and safety, including sustainable environmental management.”
In instances where suppliers choose not to comply with the manual, IRPC reserves the right to take appropriate action based on the potential impact and damage incurred. IRPC also encourages our suppliers to adopt sustainable procurement policies for their own suppliers, fostering responsible practices throughout the entire supply chain.
IRPC conducts a spend analysis separately for initial feedstock procurement for the petroleum and petrochemical businesses and general procurement for additives and chemicals. Currently, there are two departments responsible for overseeing business spending. The first department is a procurement function responsible for tracking the spending on chemicals, spare parts, and other related components. The second department is a feedstock function responsible for tracking spending on all types of refineries and petrochemical feedstock.
IRPC utilizes spend analysis to scrutinize expenditure data, aiming to reduce procurement costs, enhance efficiency, and monitor compliance. Additionally, IRPC conducts a critical analysis to identify suppliers crucial to our business operations. All suppliers, both Tier-1 and non-Tier 1, are assessed and classified as Significant Suppliers based on specific criteria, including high expenditure, critical parts or components, non-substitutability, and strategic relationships.
Total tier-1 suppliers
1,789
1,844
1,814
1,816
Significant tier 1 suppliers
65
63
57
13
Significant non-tier 1 suppliers
0
0
0
7
Suppliers with SCOC signed
156
156
156
156
Suppliers with ESG training
6
8
15
88
To be included in and remain on IRPC’s Approved Vendor List (AVL) and Approved Contractor List (ACL), all suppliers, both new and existing, must undergo a comprehensive evaluation process. This assessment is guided by fair and transparent standards and incorporates a pre-qualification questionnaire to evaluate suppliers’ readiness, production capacity, logistics, safety, occupational health, and environmental compliance. Furthermore, the evaluation emphasizes Environmental, Social, and Governance (ESG) criteria, which comprise five key objectives:
The ESG criteria account for 25% of the total supplier evaluation score, with suppliers needing to achieve at least 70% of this ESG portion to qualify for inclusion on IRPC’s approved vendor list. Moreover, IRPC establishes conditions in the Terms of Reference (TOR) to ensure that suppliers comply with relevant laws and contractual agreements, promoting accountability and compliance, particularly for tasks associated with risks such as safety, occupational health, and environmental considerations. Additionally, IRPC conducts a Contractor SSHE Management program to assess contractors’ risks and select suitable candidates; those who do not meet the assessment criteria will not be considered for selection.
New suppliers that were screened using Environmental criteria
100
100
100
100
New suppliers that were screened using Social criteria (labor practices, human rights, impacts on society)
100
100
100
100
To mitigate potential adverse impacts from the procurement process and establish a sustainable procurement system, IRPC conducts risk assessments of suppliers/contractors by identifying Economic, and Environmental, Social and Governance (ESG) risks. An ESG Risk Assessment aims to pinpoint sustainability risks in the procurement process, such as child and forced labor, and the purchase of chemicals containing prohibited substances. This assessment evaluates the likelihood and impact of each issue, using both qualitative and quantitative data, to assess its significance to the company and stakeholders.
IRPC has implemented a policy to promote and encourage suppliers to adhere to IRPC’s sustainability development principles, including human rights, occupational health and safety, business ethics, and anti-corruption, to mitigate risks and potential impacts from any misconduct by suppliers toward IRPC’s Supplier Code of Conduct. Therefore, to ensure that suppliers, including contractors, have strictly adhered to such a policy, IRPC has incorporated a supplier assessment as a mandatory measure in the procurement process. This assessment allows suppliers to evaluate their capabilities and respond to a questionnaire related to the aspects mentioned above. The topics of assessment include:
1) Business Ethics
2) Corporate Social Responsibility (CSR)
3) Safety
4) Environmental Management
IRPC identifies suppliers with high sustainability risks based on the detailed criteria outlined below. Suppliers classified as High-Risk Tier 1 must be audited annually, using methods that include on-site visits and employee interviews. These suppliers are required to establish mitigation plans and guidelines to reduce potential impacts, aligning their operations with the IRPC supplier procurement management manual to ensure that risks are managed effectively, without impacting business, society, and the environment. Corrective measures will also be determined and agreed upon by IRPC and those identified with high sustainability risks, with implementation closely monitored to ensure effective risk mitigation.
Following comprehensive assessment, IRPC conducts root cause analyses and prepares Corrective Action Plans for sustainability high-risk suppliers. The Procurement Department closely monitors the implementation of the risk treatment plans to ensure their effectiveness in reducing the likelihood and/or impact to the level of risk appetite, complemented by regular assessments conducted by the Internal Audit Office. The results of monitoring and control plans are reported to the executives on a quarterly basis.
Upon finding non-conformities, IRPC promptly notifies and provides the corrective action plans to prevent recurrence and promote improvement. All suppliers with non-conformities have therefore finalized and agreed upon corrective action plans to resolve issues and improve their ESG performance. Additionally, IRPC offers recommendations to suppliers who passed the assessment to improve their ESG performance.
In 2024, IRPC conducted ESG assessments for XX% of our suppliers. The results revealed that none of the suppliers assessed had substantial actual or potential negative impacts in these areas. Nevertheless, IRPC remains committed to capacity building for our suppliers to further enhance their performance and sustainability practices.
Total tier-1 suppliers undergone preliminary ESG risk assessment
100
100
100
100
Significant non-tier 1 suppliers undergone preliminary ESG risk assessment
100
100
100
100
Supplier audited with corrective action plan
100
100
100
100
Significant suppliers in capacity building programs
100
100
100
100
Supplier Conference 2024 – Let’s Connect Together: Moving Forward Together, Creating Towards Sustainability
In 2024, IRPC held the “Supplier Conference 2024” under the theme “Let’s Connect Together: Moving Forward Together, Creating Towards Sustainability.” The event aimed at strengthening supplier partnerships and promoted sustainable, transparent, and corruption-free business practices.
Key activities included the introduction of IRPC’s Sustainable Procurement Policy, the signing of the Supplier Code of Conduct, and a commitment to anti-corruption. The conference also featured a panel on “ESG: The Key to Business Opportunities and Sustainability” and a keynote on “Decoding Sustainable Business: Achieving Success Through Transparency.”
Training and capacity-building workshop on ESG practices for PTT Group companies.
The program, organized by PTT Group and MASCI (Management System Certification Institute), was held on 3 July 2567 (2024) at ENCO B building, PTT Headquarters.
The objectives were to:
The event included keynote speeches, knowledge-sharing sessions on sustainability excellence, and group workshops, with active participation from employees across the PTT Group.
PTT Group Supplier Development Program for Green Industry Certification
To support and assist suppliers in registering for Green Industry (GI) certification, thereby increasing the number of certified suppliers within the PTT Group’s supply chain.
Activity Summary:
Target
85
90
90
90
Performance
93
94
95
93
