Material Topic: Business Partners Social and Environmental Assessment

308-1 & 414–1 New suppliers that were screened using social criteria

Boliden’s significant risks in the supply chain are identified in our raw materials supply. In total, 100% of all new raw materials suppliers and customers managed by Boliden Smelters have been evaluated during 2018.

In the fields of logistics, products and services 25% of new suppliers with a spend over 1 MSEK has been evaluated during 2018.

Boliden management processes for Evaluation of Business Partners

Boliden sources raw materials, energy, services and equipment from various external suppliers around the world. Operating in a global market with varied legislation, ethics, working conditions, and environmental standards requires a comprehensive approach to risk management throughout the value chain. Boliden holds its suppliers and customers to the same high standards as it does its own organization – to mitigate risk throughout its value chain. This involves a systematic and risk-based process for managing suppliers, depending on their estimated level of risk and stra­tegic importance. Boliden’s Business Partner Code of Conduct is based on the ten principles of the UN’s Global Compact, the ILO conventions, the IFC Guidelines, ISO standards, international industry standards, and best practice, and sets out the minimum level of conduct required by all value chain partners – regardless of whether Boliden is the buyer or seller of raw materials, products or services.

Business partner evaluations are an essential part of how Boliden manages risk, as well as of how Boliden lives up to its values of constantly improving and taking responsibility for its entire value chain. The assessment covers financial, environmental, ethical and social performance. Evaluations are performed on both suppliers and customers. The stringent nature of the evaluation means that prospective suppliers might not actually become Boliden business partners. Suppliers may be rejected for various reasons, including issues related to environmental and social impacts, and other supplier risks. Existing suppliers are ­typically evaluated every 3 to 5 years depending on their perceived level of risk.

Self-assessments are used to evaluate all potential business partners and ensure they comply with Boliden’s Business Partner Code of Conduct. Dependent on identified risks, the evaluation of Business Partners is done in escalations using different tools and inputs and following different process paths: Short Supplier ­Assessment Questionnaire (SAQ), Extended SAQ, Site visit, Audit.

Suppliers are evaluated by Boliden specialists in a desktop study based on environmental, social and technical information provided by the supplier themselves and from information in the public domain. If necessary a site visit and a specialist audit team for that particular supplier is assembled. Boliden has extensive in-house competence to draw on for the audit team, depending on the particular supplier being audited. Any specialist competence gaps, particularly within the areas of human rights and ethics, are filled by external consultants or local country experts.

The audit team visits the site to systematically check that ­written documents, instructions and procedures comply with actual conditions on the ground and to get a comprehensive understanding of the company and the site. The final step of the audit involves the team compiling a risk assessment report that includes risks associated with the country, the company and the site. The report has to be approved by the Boliden Business Area Management, and high-risk suppliers might even need approval from Group Management, before the supplier can become a Boliden business partner.

Value chain risk management is also an essential part of Boliden’s license to operate, for example to maintain its inclusion on the London Bullion Market Association (LBMA – Good Delivery List for recommended gold producers. Boliden’s reports to the LBMA are valid for Boliden Rönnskär and are verified by the accounting firm KPMG. They can be viewed at

Working with suppliers to improve Boliden’s value chain

Due to the nature of the metals and mining sector, some long-term strategic business partners are of such great importance that Boliden may choose to work proactively to overcome deficiencies if they are considered to be a key partner. In such circumstances, Boliden works with the business partner to draw up a development plan designed to rectify any deficiencies. If the risk is deemed to be excessively high, or if the business partner is unwilling to make the necessary improvements, Boliden will end the partnership.

Boliden works actively to promote best practices among its suppliers in order to work beyond compliance and further improve its value chain. This typically involves feedback on the audit process where Boliden has identified areas for particular suppliers in which to improve, including promoting the use of best practice and best available technologies. Boliden is also a member of networks to share good practice experience, such as the Swedish Network for Business & Human Rights. Working with suppliers is a reciprocal process where all parties learn from each other and improve over time. Boliden follows up its recommendations for improvements as part of its efforts to take responsibility for its entire value chain. If a business partner does not comply with the corrective action plans and Boliden Business Partner Code of Conduct, the agreement is terminated. Boliden’s Business Partner Code of Conduct is available on Boliden’s website.

Management of Hazardous waste and Conflict Minerals

Boliden complies with all national legislation and international guidelines such as the OECD guidelines for the trade in materials, waste and hazardous waste. Boliden has a long-term policy of only paying for hazardous waste management services once a ­material has been successfully processed. This is verified by conducting site visits and audits, which are approved by the Business Area Director to ensure that the waste has been properly dealt with.

Boliden’s policy is that no concentrates or secondary raw materials shall be acquired from areas with armed conflict. Risk ­management processes promote transparency by ensuring country of origin documents for all raw materials to verify they do not come from conflict regions. Boliden’s Corporate Responsibility Evaluation of Business Partners helps to verify that its secondary and primary raw material suppliers do not source conflict minerals.

Dispute concerning the export of residual product. In 1984 and 1985, Boliden exported a residual product from Rönnskär to Chile. The purpose of the export was to reprocess the material in order to minimize the amount of material for deposits; information regarding this case is presented in the Annual and Sustainability report.