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Procurement SOP

1. PURPOSE:

The purpose of this Standard Operating Procedure (SOP) is to define a systematic approach for procurement of products, services and equipment while ensuring their compliance with the Environmental, Health and Safety (EHS) standards. This SOP aims to control & mitigate potential EHS hazards, environmental impacts and ensure that all procured equipment, materials, and services are safe for use by employees, contractors, and visitors of the Company. The goal is to ensure that all procured items align with organizational EHS objectives and regulatory compliance.

2. SCOPE:

This SOP applies to all procurements made for internal use, contractor services and outsourced activities. Procurement includes purchase of products (raw materials, packaging materials, consumables, any other material etc.), hazardous substances, equipment, machinery, tools, and services, covering all stages including but not limited to product selection, supplier evaluation, risk assessment, communication of safety requirements.

3. Procedure:

3.1 Control of Hazards and Risk Reduction

Before purchasing products, raw materials, equipment, or services, the following steps must be taken to reduce occupational health and safety risks:

  1. Risk Assessment & Aspect Impact:

    A risk assessment must be performed before the purchase of any new product, equipment, material, or service. The assessment will identify potential hazards related to:

    • Physical Hazards (e.g., machinery, equipment)
    • Chemical Hazards(e.g., hazardous substances)
    • Ergonomic Hazards(e.g., materials that may cause strain)
    • Health Risks(e.g., risks to employee exposure to toxic materials)
    • Biological Hazards(e.g., biological waste)
    • Environmental Impact(e.g., risk to the environment)

    Risk assessments should be conducted jointly by theProcurement, User and EHS departments, in consultation with relevant stakeholders.

  2. Conformance to Safety Standards:

    Ensure that all procured equipment, machinery, or materials conform to applicable safety standards and legal requirements. All equipment, machinery should comply with Atomberg’s Machine Safety Guidelines.For Example:

    • Hazardous substances should be provided with SDS and must comply with REACH (Registration, Evaluation, Authorization, and Restriction of Chemicals) regulations.
    • Raw materials should be free from harmful chemicals (e.g., CMR Cat-1 & Cat 2) or additives that could pose a health risk.

  3. Supplier Evaluation:

    Suppliers must provide detailed information on the safety and compliance of their products. The Procurement department will evaluate suppliers based on their adherence to OHS requirements as per Contractor EHS Manual, including:

    1. Historical performance on safety (e.g., past incidents, recalls)
    2. Compliance with EHS regulations (e.g., Factory Act, ISO certifications)
    3. Safety certifications (e.g., ISO 45001)

3.2 Communication and Consultation

  1. Employee and Worker Involvement:

    Workers and employees must be consulted during the procurement process, particularly when purchasing equipment, machinery, or hazardous substances that could potentially directly affect their work environment. Input from workers helps identify potential safety concerns and ensures that the procured items meet their operational needs.

    1. Consultation Process Involve workers in risk assessments, selecting equipment, and identifying safety precautions
    2. Feedback Mechanism: Implement a formalized feedback loop where employees and contractors can report on the safety of new procured items post implementation.

  2. Clear Communication of Safety Requirements:

    Once new products or services are procured, clear communication of the safety procedures is essential. This includes:

    1. Safety Data Sheets (SDS)for hazardous materials.
    2. Operational Guidelines: Communicate how new equipment should be used safely (e.g., PPE requirements, operating procedures).
    3. Precautionary Measures:Inform workers of any potential hazards associated with new products, such as handling requirements or emergency protocols.

    Ensure that this information is easily accessible to all employees, workers, contractors, and visitors.

3.3 Procurement of Equipment and Installation Services

  1. Testing and Certification:

    All equipment should be tested and verified to ensure it functions as intended before being put into operation. All new equipment/machinery should undergo EHS validation for compliances to Machine Safety Guidelines compliances. Equipment should:

    1. Be fully tested for safety.
    2. Have valid certifications proving compliance with local OHS regulations.

    Ensure that all employees including contract labour receive competency-based safety training, especially for high-risk equipment, machinery, or chemicals. It is essential that employees demonstrate proficiency in safely operating equipment before it is put into use.

  2. Installation and Commissioning:

    Equipment installation should be carried out by qualified professionals to ensure that all safety standards are met. Ensure work is carried out as per permit to work standards. Following installation:

    1. Conduct a final inspection to verify that equipment functions as designed and is compliant with specifications.
    2. Provide training to employees on the safe operation and maintenance of the new equipment.

  3. Ongoing Monitoring and Maintenance:

    Implement a system for regular inspections, maintenance, and testing of equipment. This includes:

    1. Routine Inspectionsto verify that equipment remains safe and operational.
    2. Scheduled Maintenanceto address any wear and tear that could lead to safety hazards.

3.4 Compliance with Legal Requirements

The Procurement department shall ensure to be in compliance with the legal requirements as per the applicable laws and regulations during the procurement process.

4. Procurement Process:

4.1 Supplier Selection and Evaluation

  • Pre-Qualification:Suppliers must submit documentation proving their commitment to EHS standards, including safety certifications, risk assessments, and proof of compliance with regulatory requirements.
  • Risk Assessment Review:Before finalizing any procurement agreement, review the |risk assessment & impact aspect register| conducted for each product, material, or service.
  • EHS Compliance Checks:The procurement department will work with the EHS team to ensure all EHS-related risks are addressed and suppliers meet safety standards.
  • Suppliers should also be evaluated on their commitment to ethical practices, including but not limited to labour rights, sustainability initiatives, and corporate social responsibility (CSR), which are aligned with the organization’s values. specifying that products and services must meet EHS requirements and conform to safety regulations as per Machine Safety Guidelines and Contractor EHS Manual.

4.2 Purchase Orders and Contracts

  • EHS Clauses in Contracts:All procurement contracts must include clauses specifying that products and services must meet EHS requirements and conform to safety regulations as per Machine Safety Guidelines and Contractor EHS Manual. •
  • Technical Specifications:Equipment and materials purchased must be specified with technical and safety specifications as listed in Machine Safety Guidelines.

4.3 Delivery, Receipt, and Installation

  • Delivery Inspection: Upon receipt, the procurement and EHS teams will inspect the products for compliance with safety specifications, and any hazardous materials should be labelled accordingly.
  • Installation Safety Checks:Ensure that equipment installations are properly completed, tested, and comply with safety standards before use.

4.4 Training and Use Instructions

  • Employee Training:Provide necessary training for employees on the safe use and storage of newly procured equipment or hazardous substances.
  • Safety Instructions:Make safety data sheets (SDS), operating manuals, and any other safety instructions readily available to workers.

5. Responsibilites:

  • Sourcing Department: Responsible for ensuring that all procured items meet EHS requirements, conducting risk assessments, and ensuring compliance with legal and safety standards.
  • EHS Department:
    1. Review and validate the risk assessments for each procurement activity.
    2. Monitor post-installation performance to ensure compliance with EHS regulations and operational safety.
  • Procurement Department:
    1. Ensure that EHS requirements are incorporated into procurement contracts and specifications.
    2. Collaborate with EHS in post-purchase risk assessment and product safety evaluations.
  • Suppliers:Must provide safety data sheets (SDS), technical specifications, and compliance documentation.
  • Employees/Workers/User:Must follow the safety instructions and precautions provided for the use of procured products, equipment, and services.
  • Management:Oversees the integration of EHS principles into the procurement process and ensures compliance with EHS requirements.

6. Documentation:

  • Record Keeping: All documentation (e.g., risk assessments, safety audits, supplier evaluations) should be retained in a centralized electronic database.
  • Conduct regular audits to verify that records related to procurement, safety certifications, and EHS compliance are up to date and accessible for future reviews. •
  • Incident ReportingReport any safety-related incidents or concerns associated with procured items, and document actions taken to resolve the issues.

7.Revision History:

Annexure

Annexure 1: Procurement EHS Matrix

Annexure