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Our approach
In 2023, Vale did business with approximately 5,000 suppliers. Of these, 28% were classified as ESG-critical, totaling 1,430 suppliers that representing roughly 50% of our supplier spend. These suppliers span across a wide range of segments including oil and fuel, construction, equipment, maintenance, consulting, food, spare parts, and repairs.
Vale promotes human rights compliance at every stage of our relationship with suppliers, from initial selection and onboarding to contract management, supplier development, and training, in line with the United Nations Guiding Principles on Business and Human Rights. Environmental, health, and safety considerations are also addressed in our engagement with suppliers, and we have standards and processes in place for risk monitoring, mitigation, and elimination. These are integrated into our enterprise management system, called the Vale Production System (VPS).
Photographer: Ricardo Teles
Policies and Documents
Responsible Sourcing
In 2022, our Procurement department launched a Responsible Sourcing Program including measures to enhance our environmental, social, and economic performance in supply chain management. Decisions regarding the effective implementation of the program are taken to the Executive Management, which helps us mitigate the risks involved in the chain.
The first step was building an ESG Criticality Matrix for the supply chain. This matrix was developed by segmenting our supplier base in Brazil and analyzing the different procurement categories on environmental, social, and governance risks, in accordance with ISO 20400 – Sustainable Procurement.
The ESG impacts and risks analysis of purchasing categories considers various themes such as risks related to the Greenhouse gas emissions and energy consumption, biodiversity, water consumption and exposure to water risks, integrity, slave labor, child labor, among others.
Photographer: Ricardo Teles
In 2023, all suppliers with active contracts underwent socio-environmental registration due diligence. Of these, 28% were classified in high and very high-risk categories in the ESG Criticality Matrix in Brazil. Additionally, approximately 980 subcontracted suppliers were assessed against Integrity criteria for anti-corruption risk.
Among suppliers considered as critical-ESG, 48% were prioritized for financial, health and safety, human rights analyses, and in addition to labor-related matters, totaling 686 evaluated. Of these assessments, 93% resulted in action plans to adjust our practices.
Additionally, with the aim of engaging our partners on ESG issues, the areas responsible for Human Rights, Climate Change and the Partilhar Program promoted training for 46% of suppliers classified in critical categories in the ESG Brazil matrix.
With the internal public, in 2023, around 280 buyers received capacity on diversity, equity and inclusion in the value chain with a focus on the role of Procurement in developing a more diverse supply chain.
Photographer: Ricardo Teles
Mobilized contractors
In 2022, Vale had approximately 107,000 contractors working in various roles — from mining operations through office facilities to transportation services and IT support. When working on Vale’s premises, these workers are referred to as “mobilized contractors.” They are issued ID badges and are included in a number of our internal processes.
These workers play a crucial role in our success, and we are committed to ensuring their safety, well-being, and benefits are equivalent to those of our own employees.
In Labour Risk Management (GRT) is responsible for monitoring labor relations and the health and safety of these workers. Monthly checks include reviews of social security payments for all workers. Contractors are also entitled to health insurance.
During the course of a contract, we perform due diligence assessments on aspects that include human rights and health and safety in facilities such as accommodations, dorms, changing rooms, cafeterias, transportation, etc., as well as mandatory documentation and training on aspects such as sustainability, human rights, and diversity.
Risk and impact assessment
A responsible business model requires close oversight throughout the supplier journey, from onboarding to the end of the contract and demobilization. Before entering a business relationship with Vale, all our suppliers undergo due diligence based on publicly available information, consistent with their scope of supply. This due diligence is conducted as part of Vale's Ethics & Compliance Program and covers information related to health and safety, the environment, human rights, and supplier integrity. In Brazil, we also monitor the federal slave labor dirty list and legal environmental requirements, and conduct on-site audits in specific cases.
Upon onboarding, suppliers commit, through the Principles of Conduct for Third Parties, to providing dignified working conditions, combating child labor and child sexual exploitation, respecting freedom of association and collective bargaining, as well as anti-corruption and health and safety requirements.
Even when signing the contract, reinforcing our commitment to responsible purchasing practices, our partners are engaged through anti-corruption and health and safety clauses, due to the category's criticality with the management of greenhouse gas emissions, among other issues.
In this way, Vale guarantees the alignment of its purchasing practices with the Principles of Supplier Conduct and compliance with ESG requirements, contributing to the prevention of potential risks. We also encourage suppliers to implement compliance programs and enforce the same guidelines within their own supply chains.
Supplier performance is evaluated throughout the entire contract, and we periodically assess suppliers on social, environmental, humanitarian, performance, and governmental relationship aspects.
To detect, prevent and mitigate risks and resulting impacts, training is carried out, self-diagnosis questionnaires and documentary and field inspections are carried out (including accommodation inspections). When necessary, the supplier is asked to draw up an action plan to address identified weaknesses.
Both risk classification and human rights inspections are carried out by an independent 3rd party assessment, which also verifies and consolidates all training data and completed questionnaires, and also monitors suppliers' action plans. The external consultancy uses standards and methodologies of a recognized industry to carry out verification and monitoring, such as Regulatory Standard No. 4 (NR-4), the Global Estimates of Modern Slavery report, data from the Labor Inspection Secretariat, the Atlas of Children's Rights and Business (Workplace Index), Business for Social Responsibility, Countries Listed as Conflict-Affected and High-Risk Areas, etc.
Supplier monitoring
| Initiative | Description | Frequency |
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Local labor obligations
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Monitor the labor obligations of suppliers with employees mobilized in Brazil (contracts and subcontracts), minimizing exposure to risks in various aspects, such as: safety, exhaustive working hours and labor liabilities.
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Monthly
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Forced labor dirty list
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Cross-checking our vendor list against a public forced labor dirty list published by the Brazilian Ministry of Labor and Employment.
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Quarterly
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Public sanctions list
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Cross-checking Vale’s active vendor list with the public sanctions list from the Brazilian Federal Government’s Transparency Portal.
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Monthly
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Carbon emissions management program
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Monitoring and engaging key suppliers in managing their emissions as part of the CDP Supply Chain program.
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Annual
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Tracking public sanctions (global sanctioned entities and countries policy, POL-0025-G)
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This policy applies to Vale and our wholly-owned subsidiaries and is replicated by our direct and indirect subsidiaries in Brazil and other jurisdictions in accordance with their bylaws and applicable legislation.
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Quarterly
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Supplier Performance Index (IDF)
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An index that tracks our suppliers’ performance in criteria such as technical quality, environmental protection, occupational health and safety, respect for employees, and continuous improvement.
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Six-monthly
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Compliance
Vale operates a Whistleblowing Channel as part of our Ethics & Compliance Program. This channel can be accessed by any person, both within and outside the organization, to report any suspected or confirmed violations of our Code of Conduct. Learn more here.
Vale’s anti-corruption practices include specific policies for our supply chain, such as our Global Anti-Corruption Manual, which translates Vale’s Global Anti-Corruption Policy for suppliers and contractors. For further information about these practices, see our Ethics & Compliance Program.
Photographer: Ricardo Teles
Since 2019, Vale has conducted human rights due diligence throughout the supplier journey, from onboarding to contract management. To enhance due diligence and mitigate risks, we are now internationalizing this process while focusing our efforts on risk and impact mitigation. Some of the critical issues related to our supply chain include:
Degrading working conditions and modern slavery;
Child labor;
Sexual exploitation of children and adolescents;
Workplace and sexual harassment.
When classifying our suppliers on human rights risks, we consider, among other aspects, the supplier’s industry and location. We mitigate these risks through training, self-assessment questionnaires, document inspections, and on-site inspections. When necessary, we request that suppliers develop an action plan to address identified weaknesses.
Between 2019 and 2023, we conducted over 190 human rights inspections of suppliers in Brazil and 20 in Malaysia.
For further information, click here.
As part of our efforts to reduce greenhouse gas emissions (GHG) in alignment with the Paris Agreement, Vale has set a target to reduce its indirect emissions (Scope 3) by 33% — indirect emissions include both upstream emissions from suppliers and downstream emissions from customers. In support of this target, we actively engage our suppliers in managing their emissions and reducing environmental impacts for us to collectively achieve this objective.
Since 2011, Vale has worked to raise supplier awareness about climate change and engage them in improving their emission management. In addition to being a contractual requirement, suppliers are required to complete an annual GHG questionnaire. Emissions-critical suppliers are also invited to participate in the CDP Supply Chain Program, which assesses aspects including health and safety, the environment, human rights, and integrity. Within the CDP platform, management data, governance practices, and key performance indicators are analyzed to identify risks and opportunities for emissions reduction.
Supplier engagement in climate change management is one of the pillars of the Responsible Procurement program, therefore, in 2023 we will only recommend suppliers with the highest criticality to CDP according to our ESG risk matrix. 168 suppliers were selected, and we reached the highest response rate since the beginning of the program, 98%. The result allowed us to act with more focus on evolving the value chain in best practices in climate change area. Of these respondents, 80% participated in the four CDP cycles, which shows us their continued commitment to managing the issue.
To learn more about Vale’s emissions reduction initiatives and targets, visit our Climate Change page.
Responsible sourcing of base metals
Vale Base Metals, a subsidiary established to consolidate our production operations in this segment, is committed to ensuring responsible sourcing and supply of base metals and minerals. It achieves this by applying effective risk management across the value chains for metals such as nickel, copper, cobalt, platinum, palladium, ruthenium, rhodium, iridium, gold, and silver.
Vale Base Metals will not tolerate or profit from human rights violations or support of non-state armed groups and may end relationships with any upstream supplier linked to such activities. The company is committed to managing the risks outlined in the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD Guidance), including financing of conflict, human rights abuses, bribery, and fraudulent misrepresentation of the origin of minerals, money laundering, and public or private security forces.
To ensure compliance with Vale's supplier expectations, additional Due Diligence requirements include:
Conducting third party due diligence on all third parties before entering any business relationship;
Performing annual due diligence on mineral and basic metals suppliers and conducting annual risk assessments in alignment with OECD guidelines;
Third-party audits to assess risk management within the supply chains;
Continued support for the Extractive Industry Transparency Initiative (EITI) through its membership in the International Council of Mining and Metals (ICMM);
Publicly reporting on base metals due diligence activities;
Training of employees and contractors involved in procurement and handling of these materials in our processes to manage risks;
Ensuring that the public and contractors are aware of and understand how to access Vale’s reporting mechanism for raising concerns or complaints.
For further details, see our Responsible Sourcing Policy Statement for Base Metals Minerals and Metals.
Explanatory note
Does not include steel customers and shipping suppliers in the group
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