Supporting change

Global procurement and marketing strategies make a multinational company's supply chain extremely complex. Apart from the associated legal and financial risks, global procurement entails substantial risks for the company's reputation. Novartis takes an active interest in the social, environmental and ethical conditions prevailing in the supply chain to keep our own risk exposure to a minimum and to enhance the company's attractiveness for ambitious associates, ethically aware customers and - increasingly - financial markets.

Novartis business partners throughout the world operate in different legal and cultural environments. In many countries, our corporate citizenship standards may stretch beyond the requirements of local legislation. We expect suppliers and service providers to comply as a minimum with all national and other applicable laws and regulations governing environmental protection, occupational health and safety and employment practices. If, however, for acceptable reasons, conformity with our corporate citizenship standards cannot yet be achieved, Novartis will work collaboratively with third parties on a long term and sustainable basis to achieve compliance.

In India, for example, we collaborated with biotech firm Emcure Pharmaceuticals Ltd, which manufactures medicines (dosage forms) for Novartis, to improve quality assurance, environmental impacts and working conditions. We supported Emcure's planning processes for a new production plant in line with international requirements and advised the company on the design and layout of the new plant and equipment.

As a result of this collaboration, Emcure now benefits from a state-of-the-art facility which operates in accordance with current Good Manufacturing Practice (GMP) and has been certified by international regulatory authorities (US FDA, UK MHRA, WHO and South African MCC). Its compliance with global standards makes it an attractive supplier for international customers. Skills and technical expertise at the company were enhanced, working conditions were improved, prosperity has been boosted at the regional level - and the efficiency and transparency of the Novartis supply chain have been increased.

In partnership with our suppliers, we seek to ensure that applicable laws are complied with and working conditions and environmental protection measures are improved. Novartis realizes that implementing ethical norms and standards in a binding manner within the supply chain will be a long-term process involving continual refinements. To this end, since mid-2007, Novartis has been involved in a process of dialogue between suppliers and local purchasing and corporate citizenship managers, which may in future be extended to involve local NGOs. In doing so, we are not only reducing our own risk exposure but nurturing relations with our suppliers. At the same time, we are promoting better living conditions worldwide for the benefit of society.