Supply Chain Management | PETRONAS Chemicals Group Berhad (PCG)

Why It Matters

Adopting sustainable practices in supply chain management is a crucial part of our business as it generates positive impact across the economy, environment and the communities in which we operate.

It also serves as a critical ecosystem that integrates our suppliers, vendors, investors and customers.

Our Approach

We implement high standards of integrity in procurement and activities to ensure good governance within our supply chain management. For this, we refer to the PETRONAS Procurement Standard — which adheres to the PETRONAS Anti-Bribery and Corruption Policy & Guidelines (ABC Manual), as well as the PETRONAS Code of Conduct and Business Ethics (CoBE) regulations — as our guide.
During the licensing, bidding, contracting and execution phases, we require all contractors to comply with safety, technical, environmental and CoBE regulations. We also require suppliers to complete a “Know Your Counterparty” (KYC) questionnaire during assessment to facilitate the due diligence process aimed at minimising third party risk.
We have zero tolerance for non-compliance or malpractices within our supply chain. Failure to comply with social and environmental regulations will result in serious action, including contract termination. We have established a formal grievance system for our stakeholders to safely report any misconduct or malpractice. All grievances are investigated and resolved based on specific site arrangements.
We work closely with our supply chain partners to establish a sustainable chain ecosystem across environmental, social and governance (ESG) dimensions. Where possible, we drive the adoption of sustainability frameworks and best practices within the supply chain and industry through multi-stakeholder efforts and collaborations with industry and trade associations.

How We Provide Value

Corporate Liability

We carry out a “Third Party Risk Assessment” to ensure all contractors, vendors and joint venture partners meet our standards of integrity.

Human Rights

We prioritise ethical and responsible practices throughout our supply chain. During vendor selection and hiring, we rigorously enforce the PETRONAS Contractors Code of Conduct on Human Rights (CoCHR) and HSE requirements, aligning with the eight International Labour Organization (ILO) core conventions.
We conduct regular awareness sessions to ensure contractors fully understand and adhere to our expectations, as outlined in the PETRONAS Human Rights Commitment and CoCHR. To drive continuous improvement, we perform regular CoCHR assessments, identifying and addressing gaps to achieve zero violations.
We are dedicated to ensuring our supply chain, including all vendors, adheres to both regulatory requirements and recognised industry best practices in human rights.

Supporting Malaysian-Based Vendors

We are committed to strengthening local economies by actively enhancing local participation in our procurement services. Through structured programmes, we empower local contractors to thrive in the competitive digital landscape. Furthermore, we continuously cultivate and groom local vendors through the PERONAS Vendor Development Programme (VDP), equipping them with the business skills, technical competence and global perspective needed for sustainable growth and expansion.

Sustainable Supply Chain

Our responsible supply chain is strengthened by integrating environmental and social considerations into supplier selection and conducting regular audits. We demonstrate environmental action by participating in initiatives like Operation Clean Sweep® (OCS), engaging in industry workshops on hazardous waste, and leveraging on EcoVadis for sustainability rating. Furthermore, we ensure contractual compliance by embedding environmental requirements into all our agreements.