Relations with suppliers

As stated in its Code of Ethicsi, Terna puts transparency and fairness first in its relations with suppliers. Suppliers that satisfy conditions concerning non-involvement in illegal activities, compliance with safety standards, human rights, and organisational and professional soundness are allowed to compete on equal terms on the basis of quality and price. Procurement is normally based on tender procedures that ensure equal opportunity and the utmost transparency for the participating suppliers. The objective of purchasing at the lowest price for the level of quality and safety required is always accompanied by checks to ensure that suppliers also meet the required ethical, social, and environmental standards.

Procurement contracts generally include clauses regarding the obligation to comply with Terna’s Code of Ethics and its 231 Organisational Model.
Terna also makes sure that suppliers are not involved in the use of child labour, employment of off-the-books workers, exploitation of workers, or discriminatory behaviour towards employees.

Since 2008, Terna has required its suppliers to sign a specific “Integrity Agreement”, in which they undertake to avoid conflicts of interest and practices that could restrict competition.

The most important fields for Terna’s core business are supplies, contract work, and services regarding electric power transmission, telecommunications, and information technology. Only companies considered suitable by the supplier qualification system are included in the supplier register and may participate in tenders announced by Terna for their respective product categories.

In 2009, the percentage of total purchases from suppliers subject to the qualification process (35%) was lower than in 2008 (79%). This was due to the effect of a large order for laying the underwater cables of the SA.PE.I., which was entrusted to a company in a category not subject to qualification, because it consists of only two firms in the whole world.