With its commitment to building a sustainable and responsible supply chain based on the principle of responsible and transparent procurement, Sinopec has improved the management of suppliers and contractors; strengthened strategic cooperation; and expanded diverse cooperation models.

Bidding and tendering management

In accordance with the Law of the People's Republic of China on Tendering and Bidding, the Regulations on the Implementation of the Law on Tendering and Bidding, and other laws and regulations, Sinopec has improved the "1+6+12" bidding management system; and prohibited the provisions of discriminatory and tendentious clauses for bidding. It has rolled out the Notice on Further Strengthening the Management of the Implementation of Bidding Results, clarifying the management requirements for the awarding; and performance of the bidding results to ensure the implementation of the bidding results. Besides, it has formulated the Notice on Strictly Implement Regulations and Rules on Bid Invitation and Bidding and Regulate the Behaviors of Entities Involved; and further ensured selection of preferred contractors through qualification and performance review of bidders.

Supplier management

To promote market integrity system building in a transparent supply ecosystem, Sinopec has improved its supply resource management system; expanded supplier services; optimized supplier qualification review and dynamic performance evaluation mechanism; and intensified efforts to handle breach of contract.

Implementing qualification reviews

Sinopec has implemented strict review of supplier qualifications in line with the principle of pre- and post-qualification review; conducted onsite reviews of suppliers providing materials for production equipment, and involving production and construction safety. This has been strictly in accordance with the requirements for the "onsite review of factories, equipment, products, management, and performance". The on-site reviews involved 1,437 suppliers through the year.

Advancing quantitative evaluations

Focusing on legal entity credit certification, product quality evaluation, dynamic evaluation of contract performance, and market performance, it has advanced quantitative evaluations of suppliers. By December 2022, a total of 15,116 suppliers had completed the legal entity credit certification; it had released quality assessment methods for 5,894 categories of materials; 14,926 evaluations had been made for relevant products; 46,836 suppliers had given star rating for conducting the dynamic evaluation of contract performance; and 19,107 suppliers had completed market performance ratings.

Boosting warning and punishment

Through the year, Sinopec sent work reminder letters to 16 suppliers, keeping a close eye on suppliers' contract performance of key projects, and gave risk warnings to suppliers with risks of quality and late delivery. Through the release of risk warnings in legal entity credit certification, it released 211 risk warnings this year, bringing 689 items in total, reminding relevant businesses to avoid business risks, in a timely manner. In addition, it intensified punishment of defaulting suppliers, with 289 such suppliers punished in 2022.

Implementing green procurement

Sinopec has selected energy-conserving, clean and green industrial equipment for clean production, and environmentally-friendly products, technologies, equipment and facilities. It has procured green materials that have passed the certification of environmental labeling products, energy- and water-saving products, low-carbon products and green building materials. In order to establish a system for green supply chain procurement, it has intensified its efforts to build a green standards system.

Improving training and guidance

Sinopec has resisted unfair competition and dishonesty in bidding and tendering; strengthened examination and verification of suppliers' HSE management system certification, emission permit, green product certification, low-carbon product certification and other environment-related qualifications; and encouraged suppliers to develop green technologies and products. In 2022, it held six supplier-training sessions, clarifying such requirements for suppliers such as quality management and green production.

Contractor management

To comprehensively regulate the management of contractors, Sinopec has issued the Measures of Sinopec for the Management of the Integrity System of the Construction Engineering Market; the Measures of Sinopec for the Management of the Quantitative Assessment of the Contractors of Construction Projects; and other systems or notices, implementing "red line punishment + scoring quantitative assessment". Contractors who violate the Clean Practice Responsibility Statement and other stipulations, and who use their power for personal gains or commit bribery will be blacklisted. Sinopec has promoted contractors in a comprehensive review and improvement. Besides, it has strictly implemented the management measures for market integrity system, giving such punishments as circulating a notice of criticism to 29 contractors, disqualification, restrictions on bidding, and blacklisting.
In the tendering standard documents, Sinopec clearly requires that contractors to hold quality management, environmental management, and occupational health and safety management system certification. Bidders are rejected in the event that, over the past three years, they have seen major engineering safety accidents; they have caused significant social impact due to environmental violations; or they have been blacklisted by relevant government departments. Bidders with less than 80 points are rejected in terms of HSE special review outlined in the review section. In the contract terms, it is expressly stipulated that the contractor should undertake safety responsibilities, environmental protection responsibilities and corresponding measures.

Boosting industrial chain development

Innovative operation of EPEC.com

EPEC.com, an industrial product e-commerce platform affiliated to Sinopec, aims at "making procurement more professional". Based on the supply chain to business (SC2B) e-commerce model featuring connectivity, the platform targets four major sectors - procurement; sales; bidding; and integrated services, committed to realizing value-added procurement and supply chains. By the end of 2022, EPEC.com registered 250 million yuan in cumulative transactions, involving 114,000 registered enterprises with 7.84 million kinds of online products.
As an e-commerce platform serving BRICS countries, EPEC has focused on global trade integration, enabling domestic enterprises to go global and more international businesses to make their presence felt in China. To date, it has established partnership with 183 suppliers and 162 purchasers in 61 countries involved in the "Belt and Road" initiative.

Strengthening strategic cooperation

Sinopec has deepened the strategy of openness and cooperation, and strengthened cooperation with government agencies, enterprises and universities, expanding cooperation for mutual benefit.

Contributing to China's efforts to become a manufacturing power

Sinopec has been committed to localization of major equipment, consistently making breakthroughs in a range of globally advanced equipment such as electric fracturing equipment, high-end drill bits, large-sized hydrogenation reactors, large-sized ethylene cracking gas compressor units, propylene refrigeration compressor units, large-sized extrusion granulation units, ethylene cold boxes, and large-sized oil refinery distributed control system (DCS). In 2022, 97% of Sinopec's oil and gas exploration and development equipment was domestically manufactured, versus the 94% localization rate for its refinery equipment with an annual capacity of 10 million tons, and 90.9% for ethylene equipment with an annual capacity of one million tons.