Joint liability in the supply chain

Following the provisions of Italian law that focus on guarantees for the employees of contractors, in the past few years Enel, in its capacity as a customer, has joint liability with its contractors. This joint liability addresses the fulfillment of obligations concerning payment of salaries, pension and health-care contributions. These provisions are effective for two starting from the end of the contract and they foresee joint liability of the customer and the contractor or subcontractor.

Concerning policies, practices, and proportions of spending regarding locally-based suppliers, Enel’s procurement procedures comply with current regulations, in accordance with the principles for publication: non-discrimination, transparency, and cost-effectiveness.

All competitors with the general and special requirements prescribed in the related tenders can participate in the offers, regardless of their geographical location. The contract is awarded to the company that makes the best bid, according to the criteria of the lowest price or the most cost-effective offer.

With regard to ethics and sustainability in making investment and procurement decisions, in 2009 Enel Servizi’s Operational Purchasing Department and Personnel Administration Department devised a system for formalizing controls in these areas.

The project focuses on joint liability and creates an additional communication channel between Enel and its suppliers, ensuring that the latter are constant monitored through the creation of a dedicated portal.

In effect, Enel will put a platform at the disposal of its contractors and suppliers to facilitate the computerized collection and management of the documentation regarding the joint liability by dematerializing the documents and their consequent exchange in order to ascertain whether or not the obligatory pension and welfare contributions have been paid. The first companies involved in this project initiated in May 2010, the call-center contractors, must use the portal to periodically furnish the documents to be checked so that respect for workers’ rights can be monitored and prevent negligence that will have to be remedied.

Last update: 19/07/2011