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To standardise the contract templates we use in purchasing management to ensure that Cepsa s standard require- ments are uniform across the Company s geographies and businesses, in 2017 we reviewed and standardised new contract templates for supplies and services.

All contracts include an ethics clause on the Company s requirements as to sup- pliers ethics and conduct, so as to hold suppliers to the standards of Corporate Responsibility. Standardisation enables us to supervise suppliers compliance with contractual obligations to uniform standards known to all parties, thus en- hancing our transparency. by applying the standards uniformly across the organisa- tion we extend the same supplier engage- ment system under common generally applicable criteria, and so securing our suppliers acceptance of and compliance with our Code of Ethics and Conduct.

The Code of Ethics for Suppliers sets out our commitment to the principles of the United Nations global Compact, and is applicable to all operations in every country in which we operate. To ensure compliance with the Code of Ethics for Suppliers, we have in place a channel for reporting incidents and irregularities that may be accessed from the supplier por- tal on our website, where our suppliers may report any behaviour that violates the Code of Ethics during the commercial relationship.

One of our steps in 2017 in managing our supply chain was the launch of the 2017

Purchasing Innovation Plan. A highlight initiative under this scheme was the creation of the Innovation Observatory with Suppliers, #CepsaObservaInnova. The new Plan is designed to support the emergence of a culture of innovation in the Purchasing area so that we can po- sition ourselves at the forefront of the creation of Industry 4.0: extending our strategic reach to blockchain, virtual and augmented reality, and additive manufac- turing in the form of 3D printing, among other domains.

We also implemented improvements to our supply chain management internally: for instance, we set in motion our market Intelligence Project. The project aims to improve internal communications by pro- viding the entire Purchasing team with an environment allowing for prompt and centralised access to detailed informa- tion and tools about markets, suppliers, indices and geographical information. Internal information about our business units is also available to bolster and en- hance our strategic vision and know-how both externally and internally.

These steps, coupled with the experience that comes with our leading position in the industry, will help us remain at the forefront of value chain management through a process of ongoing improve- ment that we sustain every day at Cepsa to adapt to and anticipate new scenarios that will emerge in the future.

ETHICS CODE FOR SUPPLIERS

FOR FURTHER INFORmATION AbOUT THE CODE OF ETHICS FOR SUPPLIERS, CLICk HERE

FOR FURTHER INFORmATION ON CONTRACT TERmS, CLICk HERE

2017 ANNUAL AND CORPORATE RESPONSIbILITy REPORT