Baker Hughes is part of a broad global supply chain, and we source materials from many countries around the world. In addition to managing our own corporate responsibility performance, we also have a desire to ensure that the suppliers we work with adhere to high standards. As a major equipment manufacturer and service provider, we have some influence, along with our peer companies, to help raise the standards of our industry. Our Supplier Integrity Guide governs all aspects of our relationships with suppliers, contractors, consortium partners, and consultants. Our Supplier Social Responsibility Program (SSRP) is intended to set standards for and monitor compliance of HSE performance, ethics, compliance, and respect for human rights. Suppliers that are flagged as high risk in regards to social responsibility would be audited on the standards listed above.
Our sustainable supply-chain framework consists of four core pillars, outlined below. As a part of the SSRP, all new direct material suppliers are screened and assessed for social risks. We believe that integrity and compliance are a foundational element of our culture. Our direct suppliers are required to hold their own suppliers to equivalent standards. Our enterprise-wide global ethics and compliance program is designed to prevent, detect, and appropriately respond to any potential violations of the law or company policies, and this program applies to our direct material suppliers. We plan to continue to enhance our supplier social responsibility frameworks in the future, through the addition of new programs addressing supply chain labor and emissions reporting.
Supplier Integrity Management
We review our direct material suppliers to determine our SSRP applicability through our common supplier onboarding process.
Assessment: We take a risk-based approach to our supply chain auditing program to identify higher risk suppliers based on country risks, the supplier's past performance, and other factors. We look to continuously improve our risk profiling by further identifying additional risk factors, such as process risks, to include in our reviews. Additionally, pre-engagements and on-site periodic assessments are the responsibility of every sourcing professional as they visit suppliers.
Verification: If suppliers are identified as having the potential for engaging in high-risk activities, then they are subject to audit by our trained auditors. These auditors conduct on-site audits on a one- to five-year basis, using a global questionnaire and risk-weighting metrics. In 2021, we used desktop audits in regions that did not allow travel or that had COVID-related health and safety risks for our sourcing auditors. In some areas, we did resume on-site supplier audits and plan to continue in 2022.
Requirements: Our Supplier Integrity Guide prohibits activities associated with human trafficking, such as withholding passports, charging recruitment fees, and misleading recruitment. Our guide also imposes certain affirmative obligations on suppliers, such as a requirement to reimburse workers for transportation costs and to provide workers with written contracts in a language they understand. The guide encourages open and direct reporting.
Accountability: All assessment findings from on-site audits are recorded in our automated assessment tracking tool. This tool monitors each assessment finding of concern until it is closed, which occurs only after the supplier provides evidence that all noted findings of concern have been corrected.