G4-12, G4-DMA, G4-EC9, G4-EN32, G4-EN33, G4-DMA, G4-LA14, G4-LA15

Operating one of Turkey's most extensive service networks geographically, Ziraat Bank also has a huge chain of suppliers. The Bank manages procurement processes with its Procurement Management System, in addition to the Board of Directors-approved Procurement Policy and General Responsibility Principles. The Bank develops sustainable business relationships based on mutual trust and collaboration with its current and potential business partners.

Multi-Dimensional Procurement Processes

For the daily operation of its branch and head office units, Ziraat Bank must procure - from an enormous number of companies, organizations, and individuals - an extensive volume of products and services. These range from office supplies to cleaning materials, food and beverage services to employee transportation, and maintenance & repairs to training and advertising.

For the operation of its core banking activities, the Bank must also procure a vast array of critical and essential products and services, ranging from IT services to payment-card printing, premises security to legal and valuation services.

Support for Local Economies

In order to support local economies, the Bank generally procures the needs of its branch network from locally based suppliers. However, Ziraat Bank may at times take a strategic decision and make lump purchases from a single supplier to enjoy price advantages.

In 2015, Ziraat Bank paid out about TL 504 million to suppliers located across the country. During the reporting period, all of Ziraat Bank's direct procurements were made from suppliers based in Turkey.

In the management of its supply chain, Ziraat Bank engages in a statutorily-mandated tendering process that is scrupulous, cost-competitive, and transparent. When selecting suppliers from which to procure goods and services, simultaneous consideration is given to several interacting parameters.

Before purchasing products or services from an existing supplier and in order to identify potential suppliers from which procurements might be made in the future, the Bank focuses on the following issues, the determination of which involves a visit to the supplier's business premises:

• Previous performance if any
• Technological capabilities
• Financial standing (based on turnover, tax-assessment base, and the like)
• Management profile
• Employee qualification and training levels
• Nature/location/area of business
• Reliability
• Market position
• Machinery & equipment park
• Environmental policies and practices
• References
• Delivery capabilities
• Evidence of service quality and/or management competencies (ISO certification, and similar)

G4-DMA, G4-12, G4-EC9, G4-EN32, G4-EN33, G4-DMA, G4-LA14, G4-LA15

Environmental and Social Control in Procurement

Ziraat Bank works to identify any environmental and/or social risks inherent in its goods and services procurements and stipulates these in its technical specifications. Examples of the Bank's adherence to this practice are seen in the following requirements: cleaning service provider staff garments must not contain azo dyes or other carcinogens; thermal paper must be used for printing ATM and POS receipts; and IT equipment must be rated energy-efficient.

The Bank seeks to fully comply with the requirements of applicable laws, rules and regulations in all aspects of its supply chain management. Such compliance is an integral part of all the contracts that the Bank enters into with its suppliers.

Full Compliance with Universal Standards

When selecting suppliers, Ziraat Bank evaluates their compliance with laws, rules and regulations pertaining to human rights and to workplace, employee health and safety standards. The Bank also weighs their attitudes toward the prevention of forced labor and exploitation, child labor, discrimination, and similar abuses. If the Bank uncovers any evidence of any violations of such universally accepted norms, it severs its contractual relationship with the supplier and may even impose sanctions, such as banning the suppliers from bidding in future tenders.

During the reporting period, Ziraat Bank did not knowingly work with any supplier whose activities were subject to investigation for human rights or environmental issues.

In its supplier relations, Ziraat Bank is subject to contractual law in general as well as particular rules set out in the "Regulation Concerning the Outsourcing of Support Services by Banks and the Authorization of Organizations Providing Such Services" published by the Banking Regulation and Supervision Agency (BRSA). Ziraat Bank periodically reviews its suppliers' performance to ensure that they are in compliance with the requirements of this regulation.