Our Supply Chain Policy plays an integral role in Dril-Quip's success.
We view our suppliers, vendors and contractors as valued partners who play an integral role in the company’s success. Through our Supplier Code of Conduct, we aim to demonstrate our vision for ensuring long-term value creation across our partner ecosystem. We look to develop strategic partnerships that are mutually beneficial to both parties for the long-term. Dril-Quip’s commitment to sustainable and ethical behavior is a core part of the business, and we expect our partners to also act in accordance with our policy.
Our goal is to minimize supply chain risks while also ensuring that our entire business operation aligns with our core legal, environmental and social values. We have developed an enhanced and consolidated approved vendor list (AVL) which is based on a comprehensive screening process that addresses the following areas: a) the business case for onboarding a given supplier; b) health and safety metrics at the suppliers' facilities; and c) financial risks, including their cash flow position and leverage profile. These factors are thoroughly reviewed by Dril-Quip in the initial screening process to identify suppliers that are qualified for the AVL. For those companies listed on the AVL, an automated scorecard is updated regularly to provide statistics around on-time delivery performance and workplace health and safety, as well as other financial key performance indicators.
Laws and Regulations
Compliance with all applicable laws and regulations includes adherence to all applicable environmental laws and regulations regarding operations or services provided. Furthermore, we expect our business partners to comply with international laws, including those related to international trade, antitrust, and competition. Dril-Quip does not tolerate the use of child labor or forced labor and works to eliminate workplace discrimination. It is expected that our business and all affiliated partners also commit to conducting operations and business practices in a manner consistent with international law, including the elimination of child labor, forced labor and workplace discrimination.
Suppliers must comply with their contractual obligations and perform their activities while respecting social development and environmental protection. Our Supplier Code of Conduct is meant to act as a basic framework for our suppliers to follow and we are committed to maintaining an open dialogue with our business partners to continuously improve their operations. To that extent, Dril-Quip will rigorously monitor compliance to our basic standards laid out in our Code of Conduct.
Conflicts and Corruption
Our employees and suppliers must make sound and impartial business decisions to avoid all business dealings that may result in a conflict of interest. We expect our partners to avoid any conflict of interest or corrupt practices, including, but not limited to, bribery, money laundering, and the hiding of illegal funds. If any conflict of interest occurs, Dril-Quip will take appropriate action. Furthermore, we encourage our business partners to promote transparency and accountability with the aim to prevent the occurrence of such acts throughout their own businesses.
Environmental, Health, and Safety
We promote and provide a safe, secure and healthy workplace for all employees and contractors. Our ultimate goal is to give our employees and all associated businesses a healthy and accident-free workplace. To mitigate work-related risks, we ask that our partners comply with relevant occupational health and safety rules and regulations and establish company policies that seek to further reduce the occurrence of accidents. We also expect our suppliers to empower their employees with the responsibility to express any health or safety concerns they may have regarding their work environment without retaliation. Dril-Quip employees are encouraged to take part in our Safety Observation Suggestions (SOS) reporting system. We request that our business partners also implement similar systems throughout their own supply chains and ensure that reporters will not face any form of retaliation or consequences as a result of reporting in good faith. To further promote this goal, we ask that our partners apply continuous efforts to improve safety, security, health, and environmental performance.