Bureau Veritas Helps Foreign Direct Investment Move Forward With

Bureau Veritas Helps Foreign Direct Investment Move Forward With Confidence in China

December 2013 Issue 18

12 / DecathlonWe Need Bureau Veritas in Our Critical Period of Accelerating Growth

15 / Stora EnsoGoing Forward Hand in Hand with Bureau Veritas on the Road to Sustainable Development

18 / CodelcoBureau Veritas is Our Indispensable Global Sourcing Partner

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WITH BUREAU VERITAS BESIDE YOU,NOTHING IS LEFT TO CHANCE

After overcoming US’s Foreign Direct Investment (FDI) last year, China’s FDI has set a new record at the end of June 2013

with a growth rate of almost 5% year on year, accounting for more than 3% of the domestic Growth Domestic Product (GDP).

China’s economy’ attractiveness for foreign investors still results from the solid anticipated GDP’s growth rate, but also from

the fast evolving domestic demand in even more sophisticated, safer and environmentally respectful products and services.

In other words, a vast demand geared towards more quality while quantity still remains a driver. Indeed, some uncertainties

are overcasting this landscape but compared to other part of the world, the comparative advantages are so numerous that

investing in China remains a no brainer for many international investors.

Bureau Veritas has also followed this trend. China is today Bureau Veritas First home. With an headcount over 10,000 people

in China, Bureau Veritas aims at serving the Chinese economy. Not only do we ensure the conformity assessment of products

or services geared towards export markets and, even more today, geared towards the domestic market, but also we do assist

foreign investors in their projects wherever they intend to operate in China. Our mission encompasses assistance throughout

the life cycle of the assets or products. From feasibility study, to commissioning, from design review to site acceptance,

Bureau Veritas will provide a tailored service according to your sectorial business needs, offering innovative solutions for

reducing risks, improving performance and promoting sustainable development. Your diversity, the location of your projects,

your requirements and constraints are our engine to keep on improving our quality of service. Our teams in China are

looking forward to meeting you, discussing about your strategic projects and define the best ways to integrate the Quality,

Environment, and Safety priorities and objectives in order to ensure your overall satisfaction. BV

BUREAU VERITAS HELPS FOREIGN DIRECT INVESTMENT MOVE FORWARD WITH CONFIDENCE IN CHINA

BUREAU VERITAS - 2013 BV EXPRESS 03

Mr. Romain PETITExecutive Vice President, ASIA ZONE

Bureau Veritas·Industry & Facilities Division

Our te ams in China are lo ok ing for ward to

meeting you, discussing about your strategic projects

and define the best ways to integ rate the Quality,

Environment, and Safety priorit ies and object ives

in order to ensure your overall sat isfaction.

2-5F, No.1288, Waima Road, Huangpu District, Shanghai 200011

TEL ＋ 86(21)2319 0001FAX ＋ 86(21)6886 1421

F22, Tower B, Global Teade Center36 North Third Ring Road East,Dongcheng District, Beijing

TEL ＋ 86(10)5968 3888FAX ＋ 86(10)5968 3666

Room 1906, Hong Lin International Building, No. 266, Sanduan of Furong Zhong Road, Changsha

TEL ＋ 86(731)8577 7303FAX ＋ 86(731)8577 7302

Room 1501, A block, Hailrun Complex,No.216 Down East Street, Jinjiang District, Chengdu

TEL ＋ 86(28)8667 8838FAX ＋ 86(28)8667 7863

15-2, Building 2, One Central Midtown No.18 Jinshan RoadTEL ＋ 86(23)6789 6861FAX ＋ 86(23)6789 6862

RM 1905B, 19F Senmao Building No.147 Zhongshan Road Dalian

TEL ＋ 86(411)8360 4677/4450FAX ＋ 86(411)8360 7302

RM 620, No.132 Wu Yi Zhong Road, FuzhouTEL ＋ 86(591)8385 3966FAX ＋ 86(591)8385 3966

Rm.1602-1604 on 16th floor, Heye Plaza,No.486, Kangwang Zhong Road,Liwan District, Guangzhou 510140, P.R.C

TEL ＋ 86(20)8130 0800FAX ＋ 86(20)8130 0803

Rm.603, Building C,Huaxing Times Plaza,No.478 Wensan Road, Hangzhou

TEL ＋ 86(571)9715 3780FAX ＋ 86(571)8715 3979

Room 512, Baoli Technological Building,No.93 Zhongshan Rd, Xiangfang District,Ha'erbin

TEL ＋ 86(451)8239 3091 / 92FAX ＋ 86(451)8239 3097

Room 23-25, 10/F, Pacific TradeCentre, 2 Kai Hing Road, Kowloon Bay,Kowloon, HongKong

TEL ＋ 86(852)2815 2092FAX ＋ 86(852)2545 3287

Room 2605, No.116 Lanshi BusinessBuilding, Dunhuang Road, Lanzhou City,Gansu Province

TEL ＋ 86(931)2342 377FAX ＋ 86(931)2342 377

3F Luoyang Peony Hotel, No.15West Zhongzhou Road, Luoyang City,Henan Province

TEL ＋ 86(379)6468 0089FAX ＋ 86(379)6468 0113

Room 1408, Jiangxin international plaza,No.88, west Beijing Road, NanchangTEL ＋ 86(791)8630 4797FAX ＋ 86(791)8630 4797

Guangzhou

Nanchang

Luoyang

Lanzhou

Hong Kong

Harbin

Hangzhou

Rm.18D1 Kings Tower No.1156 Binhe Road,New and Hi-tech Development District, Suzhou

TEL ＋ 86(512)6831 2912FAX ＋ 86(512)6807 8583

33F,Tianjin City Tower,No,35 Youyi Road,HexiDistrict,Tianjin,P.R.C.

TEL ＋ 86(22)8835 1018FAX ＋ 86(22)8835 1019

Rm 608 block B, No.36 Oak block Fenghui Road(S),High tech district, Xian

TEL ＋ 86(29)8720 9927FAX ＋ 86(29)8720 9753

Rm C6,12F,Shangmao CenturyPlaza,No.49 South zhongshan Road,Baixia District,Nanjing

TEL ＋ 86(25)8689 3166FAX ＋ 86(25)8689 3166-208

TEL ＋ 86(574)2768 0810FAX ＋ 86(574)2768 0881

33F,Tianjin City Tower,No,35 Youyi Road,HexiDistrict,Tianjin,P.R.C.

TEL ＋ 86(22)8835 1016FAX ＋ 86(22)8835 1023

Rm2301,A3 Building,LingjiaohuWanda Plaza,No.5,TangjiadunRoad,Jianghan District,Wuhan

TEL ＋ 86(27)8808 9336FAX ＋ 86(27)5922 4771


03 Bureau Veritas Helps Foreign Direct Investment MoveForward With Confidence in China

07 Bureau Veritas Relocates China Headquarter - ResourceIntegration Shall Boost Global Localization

07 CSEI and Bureau Veritas will Set Up a Joint Venture07 Bureau Veritas Joins the 10th China International Exhibition

on Nuclear Power Industry, to Ensure Nuclear Safety and Quality

08 Customer-oriented Services of Bureau Veritas Win Praisefrom Manoir

08 Exam Pass Rate of First Bureau Veritas CWI Training Hits 68%

08 Bureau Veritas and CIMC Negotiate to Cooperate in Logisticsand Marine Areas

08 Bureau Veritas Secured a Major Contract with TIL at TOCEurope in Rotterdam

09 Bureau Veritas Helps Aeromat Successfully Develop NewCorrosion Resistant Composite Pipe

09 Bureau Veritas VAMA Team Safeguards the Smooth Erectionof Two 120T Mill Housings

09 Bureau Veritas Assist Faurecia Shanghai New TechCenter intoOperation

09 Bureau Veritas Successfully Held the 2013 Asia CommercialReal Estate Summit & Safety Risk Management Forum

10 Bureau Veritas Helps Zhejiang Yinlun EstablishesISO50001 : 2011

10 The Mira Hong Kong Receives HACCP Accreditation

10 Bureau Veritas Assists Chinese Enterprises in Preparing forEnergy Management System

12 Decathlon: We Need Bureau Veritas in Our Critical Period ofAccelerating Growth

15 Stora Enso: Going Forward Hand in Hand with Bureau Veritason the Road to Sustainable Development

18 Codelco: Bureau Veritas is Our Indispensable Global Sourcing Partner

22 Going Side by Side: Luxury Hotels and Fire Safety

28 Bureau Veritas Supervision, Provide High-end Quality ControlServices for Construction Project

31 Multinationals’ Sourcing Strategies in China

34 Supplier Technical Assessment: Help Sourcing Managementto Move Forward With Confidence

36 How to Make Your Quality Management More Outstanding?

CONTENTS

CHIEF EDITOR WenJiang LI, Jonas ZHANG

EXECUTIVE EDITOR Jessie WAN

ART EDITOR Polly TENG, Roy YE

For free subscriptions to this magazine, Please contact us: [email protected] +86(21)23190042

©2013 Bureau Veritas - All rights reserved

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CONTACT

- Website: www.en.bureauveritas.cn

- Mail: [email protected]

- Shanghai Tel: +86 (21) 2319 0000 Fax: +86 (21) 6886 1418

Beijing Tel: +86 (10) 5968 3888 Fax: +86 (10) 5968 3666

Guangzhou Tel: +86 (20) 8130 0800 Fax: +86 (20) 8130 0803

Hong kong Tel: 852-2815 2092 Fax: 852-2545 3287

Bureau Veritas Certification as worldwide leadership owns 5,700 auditors in 140 countries and 36

accreditations, provides more than 80,000 clients with certification service.

BUREAU VERITAS CERTIFICATION PROVIDES QUALITY, ENVIRONMENT AND OCCUPATIONAL HEALTH & SAFETY SYSTEM CERTIFICATION

September 23, 2013, China headquarter of Bureau Veritas has been officially moved to Huangpu District, Shanghai, in order to celebrate the company’s 20th anniversary of entering to Chinese market. Industry and Facilities Division, Marine, and Government Services & International Trade Division moved to the new building, the integration of internal resources will provide a more professional one-stop solution for Chinese market.

September 23, Bureau Veritas held the inauguration in Shanghai new office, Governor of Huangpu District, Chairman of Huangpu District Trade Union, leader of Entry-Exit Inspection and Quarantine Bureau and more than 100 of clients attended the inauguration. September 24, Bureau Veritas Shanghai Inspectorate Metals & Minerals Technical Center officially established at the same time. With 1,500 m2 of laboratory space and the latest equipment and analytical techniques, the Shanghai Technical Center will become Bureau Veritas’ second Global Technical center for metals and minerals.


INDUSTRY & FACILITIES DIVISION

CSEI and Bureau Veritas will Set Up a Joint Venture

INDUSTRY

Recently, Bureau Veritas participated the 10th China International Exhibition Nuclear Power Industry (CIENPI) at Shanghai World Expo Exhibition & Convention Center. With a number of successful cases in the field of nuclear power, especially the AP1000 project, Bureau Veritas attracted many industry peers to visit.

CIENPI is a prestigious biennial e v e n t f o r t h e e x c h a n g e s a n d communications of the nuclear power industry around the world. The 10th CIENPI is organized by the China Nuclear Energy Association (CNEA). More than 170 nuclear power industry enterprises and scientific research and design institutes from 17 countries (regions) participated in this exhibition. France, Russia, Spain and the United Kingdom even participated in the exhibition in the form of national pavilions.

Recently, China Special Equipment Inspection and Research Institute (CSEI) and Bureau Veritas have successfully entered into a letter of intent for a joint venture. The parties reached an agreement to set up a joint venture company which provides inspection and testing services for specific fields. Mr. Lin Shuqing, President of CSEI, and Dr. Xing Jishun, Senior Vice President of Bureau Veritas and General Manager of Industry and Facilities Division Greater China, attended the signing ceremony. As China's first company jointly established by a foreign inspection institution and a national inspection institution of China, the joint venture is expected to be completed within 2013.

Bureau Veritas Relocates China Headquarter - Resource Integration Shall Boost Global Localization

Bureau Veritas Joins the 10th

China International Exhibition on Nuclear Power Industry, to Ensure Nuclear Safety and Quality

The establishment of the joint venture is the association of two authoritative inspection institutions both at home and abroad, and is also a major breakthrough of the development of the special equipment inspection industry of China. After established, the joint venture will start from the industries such as petroleum, petrochemical, power, amusement parks, mining, cement manufacturing and ports to prov ide advanced inspection and technical advisory services based on sophisticated inspection technologies.

08 2013 BV EXPRESS - BUREAU VERITAS

Recently, Bureau Veritas has received a w ar m co mm e n d a t o r y le t t e r from Yantai Manoir Heat Resistant Al loys Co., L td. , which greatly recognizes the customized GOST service provided by the Inspection Department of Bureau Veritas for it, and appreciates the professional attitude and excellent quality of our two engineers, Jiang Da’an and Liu Qi. This creates another excellent example for the implementation of the “customer-oriented” service concept of Bureau Veritas.

During the communications with Manoir, Bureau Veritas allocated the resources according to actual situations from the customer's perspective, to provide more value-added services: customize the GOST training according to the customer’s demand, one-on-one Q&A for its project team, provide a variety of services for reference, optimize the service program, and integrate and update the decentralized inspection services to save costs for the customer.

Few days ago, the exam scores of

Exam Pass Rate of First Bureau Veritas CWI Training Hits 68%

Bureau Veritas and CIMC Negotiate to Cooperate in Logistics and Marine Areas

Recently, Bureau Veritas and China

Bureau Veritas Secured a Major Contract with TIL at TOC Europe in Rotterdam

Recently, Bureau Veritas secured an

important contract with the well-known

terminal operator, Terminal Investment

Limited (TIL), during TOC Europe 2013

in Rotterdam. This agreement covers

Third Party Inspection services on the

9 Ship to Shore (STS) Cranes for TIL

container Terminal in Asyaport, Turkey.

The equipment will be manufactured by

the first batch of the Bureau Veritas Certified Welding Inspector (CWI) trainees were released. Among the first batch of 19 trainees, 13 ones passed the exam and got the CWI certificates, and 5 ones got the Certified Associate Welding Inspector (CAWI) certificates. The 68% pass rate is on the top list in the world (the current global average pass rate is about 30%).

The 5-day intensive training provided by Bureau Veritas before the CWI exam is of great benefit for the participants. They pointed out that all Bureau Veritas trainers had participated in the specialist training of AWS and held the CWI certificates, so their professionalism is beyond doubt. Furthermore, during the training process, the training program is well-arranged and the presentations of the trainers are highly specific, which has a significant effect on the exam pass rate.

International Marine Containers (Group) Co., Ltd. (CIMC) organized a technical seminar in the CIMC Offshore Engineering Institute at Yantai to discuss the possibilities to cooperate with each other in the areas of logistics, marine engineering and shipping. The two parties initially confirmed some projects to be implemented jointly and established the promotion mechanism for the following projects.

During this Seminar, led by Mr. James Huang, General Manager of the Transportation and Logistics Department of Bureau Veritas, and Ms. Tao Tingting, Manager of the Technology Management Department of CIMC, the participants conducted in-depth exchanges, and f inally reached a number of agreements on logistics and marine engineering.

Customer-oriented Services of Bureau Veritas Win Praise from Manoir


Bureau Veritas Helps Aeromat Successfully Develop New Corrosion Resistant Composite Pipe

Recently, the Appraisal Meeting on Nickel/Ni-Fe Liner/Clad CRA Pipeline of Xi'an Sunward Aerospace Material Co., Ltd. (Aeromat) was successfully held in the ancient city, Xi'an. A field appraisal was conducted on the newly developed corrosion resistant pipe – Nickel/Ni-Fe Liner/Clad CRA Pipeline – in high sulfur environment. Bureau Veritas provided third-party inspection services for the composite pipe.

Nickel/Ni-Fe Liner/Clad CRA Pipeline is a new type of corrosion resistant

Bureau Veritas Assist Faurecia Shanghai New TechCenter into Operation

OIL & GASRecently, Faurecia New TechCenter in Shanghai, supported by Bureau Veritas for project management consulting services, has brought into operation on time. The total investment of the project reaches up to 180 million RMB and the building area is about 32 thousand sqm including one R&D center (main building) and one training center (annex building).

Bureau Veritas has provided the services for many Faurecia projects of new plants and offices. With rich experience and technical expertise, we guarantee the rapid development of Faurecia in China safe and steady. For this project, Bureau Veritas was entrusted to provide the project consulting service, including technical design review, design management, tender management, construction management and so on. After the successful completion of the project, Bureau Veritas has received the invitation to attend the opening ceremony. During the ceremony, Faurecia expresses their appreciation for our indispensable contribution and praises our project team for their high quality services.

Recently, The smooth erection of two 120T Mill housings marks that another grand milestone has been successfully accomplished in Valin-ArcelorMittal Automotive project (VAMA) in Loudi, Hunan province, with the witnesses from VAMA, Bureau Veritas, Jianli, Siemens, and the Contractor.

MHI in India in 2 facilities, fabrication

& sub-assembly in one unit and

assembly & erection in another unit.

To ensure that the installation and

works comply with approved design

code, Bureau Veritas China with the

support of Bureau Veritas India will

provide continuous monitoring of the

production in MHI facilities in India.

The Assistance in acceptance testing

and Handover will be performed by

Bureau Veritas China inspector at the

end user terminal in Turkey.

CONSTRUCTION

Bureau Veritas VAMA Team Safeguards the Smooth Erection of Two 120T Mill Housings

pipe in high sulfur environment successfully developed by Aeromat. As the inspection service provider for the composite pipe, Bureau Veritas effectively ensured that the product fully complies with the requirements of API Spec 5LC and 5LD standards.

Valin-ArcelorMittal Automotive project, known as VAMA, the biggest investment in Hunan province is a joint venture of Valin Steel and ArclorMittal Steel, the World No.1 in steel industry. Bureau Veritas VAMA team have been providing project management assistance services to VAMA, which includes, in particular, fully responsible for HSE management. VAMA anticipates first

coil roll - out by June 6, 2014, or even earlier.

Recently, Bureau Veritas held a seminar on Energy Management S y s t e m ( E n M S ) i n S h a n g h a i successfully, providing delegates from various renowned enterprises, such as Baosteel Special Material, General Motor, Auchan and L’Oreal, with an in - depth analysis of both ISO50001:2011 - an international standard and GB / T23331-2012 - a national standard.

Zhou Xiangmei, one of the drafters of GB / T23331, one of the participants of ISO50001 and a senior assessor of Bureau Veritas on Energy Management System, was introduced to the seminar as the keynote speaker. The seminar has achieved a great success. The participants highly praised Bureau Veritas' efforts and many of them commented, "The seminar convinced us of Bureau Veritas’ strengths in energy management system service and helped us to get a further understanding on how to increase the energy efficiency at a low cost or zero cost.” BV

Recently, joining a handful of Hong Kong hotels complying with highest international industry standards, The Mira Hong Kong, an ISO 14001 certified member of Design Hotels™, passed the final audits by Bureau Veritas after successful implementation of stringent food safety system HACCP.

At the certificate presentation ceremony, Executive Assistant Manager of the Mira Hong Kong, Guillaume Gallas,

The Mira Hong Kong Receives HACCP Accreditation

Co-organized by China Commercial Real Estate Association (CCREA), Shenzhen ZhongRH Management Consulting Co., Ltd. and Bureau Veritas, the 2013 Asia Commercial Real Estate Summit & Safety Risk Management Forum was grandly held at the Seaview O’City Hotel Shenzhen few days ago.

As an internationally recognized independent QHSE (Quality, Health, Safety and Environment) certification agency and a global leader in quality and safety management for construction engineering, Bureau Veritas was commissioned by the organizing committee to host the Safety Risk Management Forum on the summit. The forum included keynote speeches, experience sharing, panel discussion, free exchange to present a banquet of vision and thoughts on building’s total life cycle safety risk management.

CERTIFICATION

Bureau Veritas Helps Zhejiang Yinlun Establishes ISO50001:2011

Recently, the energy management

system ISO50001:2011 project kickoff meeting of Zhejiang Yinlun Machinery Co., Ltd. (hereinafter referred to as Zhejiang Yinlun) was successfully held in Zhejiang province. Mr. Wei Daohe, the General Manager of Zhejiang Yinlun, and Mr. Fabien Joly de Bresillon, the Certification Director at Bureau Veritas Greater China which is the project undertaker, attended and addressed the meeting.

This project which began with production energy consumption system will span several months to go through 8 stages which include energy audit, energy conservation target planning, documentation creation, etc. It will seek the root cause for unreasonable use of energy, explore energy sav ing potential and ultimately reach the energy saving target. Mr. Fabien Joly de Bresillon said: “We promise that building energy management system is bound to enable Zhejiang Yinlun to use energy in a scientific way and achieve the sustainable emission reduction target.”

received the coveted accreditation from the hands of China Director of Bureau Veritas, Fabien Joly De Bresillon who congratulated on the team effort. Hazard Analysis and Critical Control Point (HACCP), being a detailed system of food safety analysis and monitoring, it is being broken down in various parts to make it reliable from the moment food arrives hotel premises, until it is being served as a ready to consume product. It involves various departments, including procurement, receiving, kitchen, F&B service.

Bureau Veritas Assists Chinese Enterprises in Preparing for Energy Management System


Bureau Veritas Successfully Held the 2013 Asia Commercial Real Estate Summit & Safety Risk Management Forum

BUREAU VERITAS GLOBAL SOURCING SERVICES

Statutory Requirements and Local Regulations Consulting Services

Sourcing Searching and Identification of Potential Suppliers

Supplier Assessment of Capabilities

Workshop Inspection During Fabrication

Expediting

Pre - shipment Inspection

Supplier Development

Maintenance of Supplier Qualification and Periodicaudit

CONTACT

Mail: [email protected] / Tel: +86 (21) 2319 0104

跨国GLOBAL SOURCING SERVICE

1 站式服务

采购


DECATHLON: WE NEED BUREAU VERITAS IN OUR CRITICAL PERIOD OF ACCELERATING GROWTH

Interview with Greater China President of Decathlon, Pannya KHAMPHOMMALA

Pannya KHAMPHOMMALA: Decathlon has been in China

for 20 years now. However, it only produced goods in the

first 10 years and we opened retail stores in the last 10

years. From 2003 to 2011, Decathlon only has 39 stores

in China. Our most urgent task is therefore to speed up

expansion and bring our rankings from 8th to 3rd among

sports brands in China. To achieve this goal, we plan to

reach 82 stores at the end of 2013. This will be twice as

many stores as we built in the first 8 years. We therefore

need to both keep up our expansion speed and avoid

construction risks. This is absolutely a challenge for us.

[BV EXPRESS]: Could you please briefly introduce

Decathlon’s development in China?

[BV EXPRESS]: Compared with other sports brands,

what are Decathlon’s competitive advantages?

Pannya KHAMPHOMMALA: Compared with sports

brands like Nike, Adidas and Lining, Decathlon has

a unique marketing model. These brands focus on

sport clothes and sport shoes and their stores usually

only have a floor space of approximately 100m2. But

we are different. Our stores are starting from 2,000m2

to 8,000m2. We sell equipment used in more than 60

sports. We are therefore more technically specialized. In

addition, all the products created, designed, produced,

and supplied by our internal teams. Therefore we have

the best value price in the market.

Only 39 stores at the end of 2011, after 8

years of retailing in China. This is not a

healthy-looking figure for a foreign retail

invest ment comp any. But De cathlon

is not wor ried about it at all, be cause

it is a sports goods supermarket which

is unique in the world. In an interview

with BV Express, a confident Mr. Pannya

K H AMPH O MMALA, Gr e a t e r Ch i na

President of Decathlon said, “From 2012,

we speeded up our development in

China and will reach 82 stores at the

end of 2013, 150 stores at the end of

2015, bringing our ranking from 8th to

3rd among sports brands.”


Pannya KHAMPHOMMALA: For Decathlon, the biggest

challenge is to meet our own requirements and Local

rules in China. Big stores are often built in suburbs.

But in china there are so many people and the cities

are so daze, so we need to build some stores inside

commercial centers, this will bring us two challenges.

On the one hand, these stores are built and managed

by landlord. However, many landlords cannot meet all

our quality and safety requirements. For example, our

Nanjing store which wasn’t built by Decathlon suffered

from cracks as the construction company cut corners

and leaving hidden safety defects behind. We were

lucky that Bureau Veritas assisted us in successfully

solve this problem. On the other hand, we also need to

adapt to China’s local rules. However, the local rules are

different in each place. Therefore, concurrently meeting

our own requirements and Local rules in China is the

biggest challenge to us.

In addition, Decathlon also faces challenges of growing

fast. When we used to build first store we could take the

time to make more control but when you spent 30 shops

in the same year, we see big challenge, for example

training our team.

[BV EXPRESS]: As a foreign enterprise, what

challenges has Decathlon met in China?

Pannya KHAMPHOMMALA: To ensure operational

safety, on the one hand, we invite Bureau Veritas to

provide fighting inspection and electricity inspection to

our stores and test our ability to assist in rescue action

plans. We also invite Bureau Veritas to offer safety

training to the key persons in our team so that they can

improve their safety management awareness. On the

other hand, we have established our internal audit team

[BV EXPRESS]: As a sports supermarket, how does

Decathlon ensure operational safety?

BV


[BV EXPRESS]: In your stage of accelerating

growth, what support does Decathlon want Bureau

Veritas to do?

ABOUT DECATHLONDecathlon, a French company, is the largest sports goods retailer in the world. Founded by Mr. Michel

Leclercq in 1976, it is affiliated to the Oxylane Group, an all-encompassing sports chain group which

operates in two major fields. The Group is both a sports goods designer and a brand creator. Meanwhile, it

is also a retailer of sports goods. It is an all-encompassing sports chain group which encompasses R&D,

design, branding, production, logistics and sales into one body. Decathlon has expanded its production

networks to 21 countries around the world. Ninety percent of the goods sold in its 600-plus sports goods

chain stores worldwide are Decathlon’s own brand products (there are about 20 different brand names).

For both beginners and professional sports enthusiasts, Decathlon can offer top of the range sports

apparel, equipment, and all kinds of creative sports products.

Pannya KHAMPHOMMALA: As mentioned above,

Decathlon will reach 82 stores in China at the end of

2013, 150 stores at the end of 2015. We will have 6,000

staff workers responsible for operating these new

to regularly conduct safety checks in all our stores. In

addition, we are in a stage of accelerating growth and

thus attach great importance to the safety of our goods.

Through all this, we can ensure operational safety.

stores. Our stores will expand from 33 cities at present

to 60 in the future.

We hope that Bureau Veritas’ offices across China

can promptly provide our store with services. We also

hope that Bureau Veritas can actively communicate

and coordinate with the local functional departments

across the country to ensure the smooth construction

and operation of our stores as we develop really fast in

China. Finally, we attach great importance to the energy

efficiency. We hope that with Bureau Veritas’ assistance

we can reach the European standard for buildings.

Thank you very much for the support of Bureau Veritas

and let’s go on a good partner.


STORA ENSO: GOING FORWARD HAND IN HAND WITH BUREAU VERITAS ON THE ROAD TO SUSTAINABLE DEVELOPMENT

Interview with the President of Stora Enso China Region, Wangqiu SONG

Wangqiu SONG: As early as 1985, Stora Enso entered

the Chinese market. Now we have Suzhou plant,

Dawang plant and Stora Enso Inpac Co., Ltd. in China.

In addition, Corenso has paper core production bases

in Hangzhou and Foshan and operates an integrated

forest-pulp-paper project in Guangxi. All these projects

are high added-value projects.

[BV EXPRESS]: Could you please briefly introduce the current status of Stora Enso’s development in China?

[BV EXPRESS]: How do you see Stora Enso’s development in China?

Wangqiu SONG: In the new conditions of the paper

industry environment, enterprises need to make

adaptive changes in their culture and values. For this

reason, in the spring of 2011, Stora Enso launched

“Rethink”, a cultural change initiative. This is an

endeavor for us to re-examine our business model

and workflows and think deeply about the industry.

We have put forward the new proposition that “the

world needs solutions arrived at through the use of

renewable materials”. Of all the emerging economies,

China has the fastest urbanization process. By 2020,

the number of urban residents in China is expected to

reach 800 million. This also implies the expansion of

consumption, and a large amount of waste resulting

As a leader in the global biomass,

paper, packaging and wooden product

industr ies , Stora Enso has long se en

sustainable development as the foundation

and mainstay of its long-term corporate

development, taking this characteristic

as its corporate mission . In 2002, Stora

Enso started to build Eucalyptus plantations

in southe r n Guangxi Prov inc e in China,

with a focus on communit y development

and par t icipat ion, supply chain building,

b i o d i v e r s i t y c o n s e r v a t i o n a n d o t h e r

sustainable development work.


Wangqiu SONG: In 2002, Stora Enso started to build

Eucalyptus plantations in China’s southern Guangxi

Province. According to UNDP’s environmental and social

impact assessment (ESIA), our sustainable development

work in Guangxi mainly includes: participating in

community development, building supply chains, and

taking part in the formulation of FSC national initiatives,

national forest management certification standards,

providing suppliers with training in the areas of technical

Wangqiu SONG: Promoting forest certification has

strengthened the breadth and depth of our sustainable

forest operations. It is also one of our efforts to

implement and respond to our core philosophy of

sustainable development. Stora Enso attaches great

importance to forest certification work and has regularly

checked the gap between our operations and the FSC

standards and made timely improvements. In addition,

based on our woodland use plan (LUP) and UNDP’s

ESIA Report, we have formulated a forest operation plan

and held open and sincere communication with various

stakeholders (forest farms, local communities, villagers,

contractors and so on) to improve their acceptance of

[BV EXPRESS]: Could you take your Guangxi project as an example and tell us about those measures Stora Enso has taken to ensure sustainable development?

[BV EXPRESS]: Could you please share with us your company’s valuable experience and the major benefits of promoting FM’s national forest certification? What assistance has Bureau Veritas provided in this process?

from it. For Stora Enso, our focus is on what business

opportunities are hidden in the changes brought about

by urbanization. One business field we are optimistic

about at present is renewable packaging, while the

other is the building industry. Paper enterprises need

not only to transform and innovate their development

model, way of thinking and business philosophy but

must also carefully look at the market and strive to

find new opportunities and demands.

capacity, business management and the environment,

health and security management, and participating in

biodiversity conservation work, like conducting survey

on the flora and fauna in the coastal areas of Guangxi.

BV


ABOUT STORA ENSO GROUP

Stora Enso is the global rethinker of the paper, biomaterials, wood products and packaging industry.

They always rethink the old and expand to the new to offer their customers innovative solutions

based on renewable materials. Stora Enso employs about 28,000 people worldwide, and their sales

in 2012 amounted to EUR 10.8 billion. Stora Enso shares are listed on NASDAQ OMX Helsinki (STEAV,

STERV) and Stockholm (STEA, STER). In addition, the shares are traded in the USA as ADRs (SEOAY)

in the International OTCQX over-the-counter market.

Wangqiu SONG: We believe that the forest-paper

industry is a low-carbon industry and an industry of

circular economy. Fiber packaging can reduce the

carbon footprint by 33% compared to that of plastic

packaging. Each year, Stora Enso produces 47 billion

1 liter liquid packaging boxes, which can reduce 2.6

million tons of carbon emissions compared to plastic

[BV EXPRESS]: What is Stora Enso’ future corporate

development strategy? What support do you wish to

receive from Bureau Veritas?

the sustainable forest management concept. Since its

founding, the company has always managed its forests

in a sustainable manner. We have established a good

foundation. All this, together with the determined efforts

of all our employees and the support we’ve received

from Bureau Veritas’ professional team, ensured our

success in obtaining an FM certification in the FSC-FM’s

audit in 2012.

packaging boxes. We believe that the future demand

for packaging products made from renewable raw

materials will grow bigger and bigger. Stora Enso hopes

that the Rethink Initiative will enable it to successfully

transform from a big forest-pulp-paper conglomerate

into a supplier of renewable materials.

In FSC-FM’s audit in 2012, Bureau Veritas’ audit team

made a deep impression with their professionalism.

I believe that Bureau Veritas will show the same

professionalism in its subsequent supervision and audit

work. At the next stage, Stora Enso Guangxi will apply

for FSC-CoC certification for its woodland and future

pulp mills. We hope that we can cooperate with Bureau

Veritas again and work with Bureau Veritas to make a

contribution to the development of China’s national FSC

standard. In addition, we know that Bureau Veritas has

many customers with outstanding performance in terms

of sustainable development, and we look forward to

exchanging ideas with and learning from them through

Bureau Veritas’ platform.

CODELCO: BUREAU VERITAS IS OUR INDISPENSABLE GLOBAL SOURCING PARTNER

Interview with the Director Procurement and New Markets of Codelco Shanghai Co., Ltd., Cristhian ALLENDE

[BV EXPRESS]: What is Codelco’s current situation

with regard to the competition?

[BV EXPRESS]: Could you introduce us the latest

progress in Codelco’s search for suppliers in Asia

Pacific?


Cristhian ALLENDE: Codelco’s seven main copper

production sites have ensured that we keep our position

as No.1 in the world. This is our biggest competitive

advantage. However, these sites have been in operation

for decades, with the oldest having been in production

for more than 100 years. To maintain Codelco’s huge

production scale and keep our position as the biggest

copper supplier in the world, we must increase

investment in our copper production sites.

Cristhian ALLENDE: After setting up the new supply

office in Shanghai in 2012, our primary task is to look for

world-class suppliers in China, Australia, India, South

Korea and other countries in the Asia Pacific Region.

In 2012, we visited 150 suppliers. However, our team

responsible for locating a supplier has a total of just

seven members. As a result, the team faced various

challenges. These included lack of sufficient specialized

technical talent in various fields, and the lack of a

capacity to evaluate a large number of suppliers. It

Codelco is the national copper company

of Chile. It is also the first and largest copper

company in the world, with seven big copper

production sites in Chile plus a smelter and

refinery complex. Over ten years ago, Codelco

entered the Chinese market with the intention of

selling copper to China. However, with increases

in local constr uct ion costs, energ y costs and

various other expenses in Chile, Codelco had to

look for ways to reduce costs in China and other

countries in the Asia Pacific Region. In 2012, Codelco

restructured his office in Shanghai and established a

special sourcing team to look for suppliers in China,

India, Australia and other Asian Pacific countries.


[BV EXPRESS]: One year on, what aspects do you

think need particular attention when looking for

suppliers in China?

was obvious that we couldn’t complete all the sourcing

work on our own. We therefore definitely needed a

professional third party institution like Bureau Veritas

to provide us with sourcing support services, including

sourcing searching, supplier assessment of capabilities,

workshop inspection and expediting.

Codelco eventually chose Bureau Veritas as our

sourcing partner, because Bureau Veritas is a large,

trustworthy and international company whose staff are

not only knowledgeable about international standards,

but can also help us to compare the standards of

various countries. The company can also draw on

specialized technical personnel in various fields. For

Codelco, all these above factors are very helpful. Since

the beginning of our cooperation in 2012, Bureau Veritas

has helped us to successfully evaluate around 80

suppliers. Currently, we are assessing 30 - 40 suppliers

more. At the end of this year, we expect to complete the

evaluation of a total of 120 suppliers.

Cristhian ALLENDE: To my way of thinking, particular

attention should be paid quality control in the whole

process of sourcing in China. We have found in our quest

to find suppliers that many Chinese suppliers don’t pay

much attention to whole-process quality control. They

often claim to have sound quality control workflows, but

they cannot present any standardized documents to us.

In addition, many suppliers pay a great deal of attention

to quality control when they first start production.

However, several months, or a year later, their quality

control slowly wanes. To avoid this, Codelco’s practice is to

invite third party institutions to provide regular inspections.

suppliers’ weaknesses. Therefore, we will continue to

sourcing in Southeast Asia and Australia. As well as that,

we will also enter the markets in India.

Bureau Veritas is an internationalized company. We hope

that its global network can provide us with equally effective

supplier evaluation and other sourcing services to help us

to smoothly implement our global sourcing plan.

ABOUT CODELCO

Codelco is the main copper producer in the world. The Corporation also controls around 10% of the world reserves of this metal. Codelco has more than US$ 20.835 billion in assets, and in 2011, its equity totalled US$ 6.065 billion. In 2011, Codelco produced 1.79 million metric tons of refined copper (including its interest in El Abra mine). This figure is equivalent to 10 % of the world copper production. Its key commercial product is Grade A copper cathodes.

The Company develops its operations through six mining divisions plus the Ventanas Smelter and Refinery, owned by Codelco since May 2005. Its corporate strategy is coordinated from its Head Office in Santiago, Chile. The Company also has ownership interest in several important mining companies, such as in Minera Gaby S.A., where it holds 100%, and El Abra, with a 49% stake; and other mining partnerships in geological operations both in Chile and abroad.

BV

[BV EXPRESS]: What is Codelco’s sourcing plan for the next few years? What support do you want to receive from Bureau Veritas?

Cristhian ALLENDE: During 2012 and 2013 our first look

has been look for suitable suppliers in China first. This

is the basis of and the key to our sourcing in the Asia

Pacific Region. However, we are very clear about Chinese


Design consultancy and drawing review on architectural fire safety

Design consultancy and drawing review on fire fighting system

Consultancy based on international codes (NFPA, FM, IBC, BS…)

Assisting implements of fire safety of international enterprises(hotels, malls, factories…)

Construction inspection and commissioning on fire fighting system

Testing on firefighting system for new buildings

Periodic testing on firefighting system for existing buildings

Fire risk assessment

Firefighting system purchase and bidding management

Construction management on fire fighting system

BUREAU VERITAS FIRE & LIFE SAFETY

Comprehensive Fire Safety Consultancies

Target: Safety, Feasibility, Saving

Action: Providing solution, Optimizing design, Reviewing drawings

Target: Quality ensure

Action: Installation, Inspection

Target: Function ensure

Action: Installation, Inspection

Target: Risk control

Action: Periodic testing

Design

Construction

Verification

Operation

Constantly Fire Risk Controls Through all Life Cycle of Buildings

Bureau Veritas China – Industry & Facilities DivisionTel: + 86 21 2319 0204Mail: [email protected]

In-Services Inspection & Verification Division of Bureau Veritas, Nikon KANG

I. Development status of luxury hotels in China

There is no doubt that the flourishing development of residential real estate in China over the past decade or so has given rise to a large number of property developers. Meanwhile, China’s fast economic growth has also created a group of successful investors. The inborn human nature of pursuit of profit, the inherent human urge for wealth generat ion and the sweeping social trends all helped to expedite capital’s entry into the commercial property. As the golden days of residential real estate gradually fade away, commercial real estate has emerged fast and made great strides in the past few years. Hotels are now becoming an indispensible element of commercial real estate,


with luxury hotels as the crowning touch to enhance property class.

Currently, there are an astonishing number of luxury hotels operating in China. InterContinental, Starwood, Accor, Marriott, Hilton and Shangri-L a a lon e n ow r u n 57 4 lu xu r y hotels in the country. (Data next page about the hotels operated by internationally well-known hotel management companies in China are sourced from their official booking websites. All data were as of the end of August 2013.) Together with a fairly large number of hotels operated by domestic hotel management companies (such as Jinjiang and Kaiyuan) and investors (such as Wanda and Greenland), the total number of luxury hotels in China is even bigger.

In addition, there are now more than

600 planned or ongoing four-star or above hotel projects in mainland China. In the next five years, these hotels will be successively open to business. At present, the number of hotels managed by Hilton in China is far less than those managed by InterContinental. However, Hilton’s great ambition is spreading in the industry: it will run more hotels than InterContinental in the Chinese mainland market. Currently, luxury hotels are fully expanding to third & fourth tier cities, which mainly include some prefecture-level cities and economically-developed counties and cities.

The greatest driving force for the flourishing development of luxury h o te l s co m e s f ro m f i n a n c i n g associated with capital operations and the impulse to use financial

GOING SIDE BY SIDE: LUXURY HOTELS AND FIRE SAFETY

Statistics on Luxury Hotels Operated by Internationally Hotel Management Companies in China1

161

114

99

75

52

39

34


Note：1. In this article, “luxury hotels” generally refer to hotels with four-star or above ratings.

InterContinental Hotels

161

114

99

75

52

39

34

28

19

20

10

01

32

53

64

61

19

07

05

02

46

05

08

13

18

17

64

05

22

17

16

21

01

InterContinental Crowne Plaza Indigo Holiday Inn

Starwood Hotels Westin Sheraton St. Regis Four Points Amy

Wyndham Worldwide Howard Johnson Ramada

Accor

Marriott

Hilton

Shangri - La

Sofitel Pullman Mercure M. Gallery Novotel

The Ritz-Carlton JW Marriott Renaissance Marriott

Waldorf Conrad Hilton Doubletree

Shangri-La Kerry Hotel

leverage. Unbr id led f inanc ia l leverage is a bubble itself. This has almost become a consensus view in the hotel development industry. Currently, the industry is mulling to return the hotel development model to the original one of making returns from investment. For example, the InterContinental Hotels Group’s Holiday Inn Express strikes a good balance between investment , comfort and returns and is widely applicable to all kinds of cities and tourist resorts. Therefore, it is bound to achieve fast development in the next 5-10 years. In addition, luxury hotels will develop in a more

sensible way, with constraints on and trade-offs between banquet, Chinese catering, meeting and other functionalities rather than blindly pursuing a big and all-inclusive hotel.

II. High fire risks with luxury hotels

O n o n e h a n d , f i re s i n l u x u r y hotels are usually accompanied with such serious consequences as heavy casualties, expensive compensations, high restoration expenses, business interruptions of different lengths and negative publicity. For example, the fire which broke out at MGM Grand

Hotel in Las Vegas on November 21, 1980 resulted in 85 deaths, 500 injuries and $50 million in restoration expenses. On February 9, 2009, a big fire at a well-known five-star hotel which was about to open to business caused the death of one fireman and the burning of almost the entire building surface. It took nearly one year to work out a restoration plan, and the fire incident also exposed corruptions among the officials involved in the hotel project.

On the other hand, luxury hotels’ luxurious interior decorations may


Schematic Diagram of Timelines for Emergency Evacuation from a Fire Site

Available safe escape time - ASET

Margin of safety

Travel timeRecognition time

Alarm time

lgnition Detection Alarm Evacuation complete

Tenabilitylimit

Detection time

Response time

Evacuation time

ΔtREST

Δtevac

Δtpre

Δttrav

Δtta

Δtdet

Pre-movement time

Required safe escape time - RSET

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lead to high fire loads. The table below shows that the average fire load density of hotel bedrooms can reach 310MJ/m2, equivalent to the placement of 15.5kg of wood per square meters. Approximately 5% of the hotel bedrooms have a fire load density of 510 MJ/m2, equivalent to the placement of 25.5kg of wood per square meters. Moreover, in order to create a luxurious and comfortable interior effect, hotels have introduced large amounts of inflammable materials on the floors, walls and sprung roof. Despite their fire-resistance treatment, these materials are still inflammable.

Numerous fire incidents have shown that once catching fire, these fire-resistant materials which are of thin films can extremely easily cause fire to spread fast.

Bes ides , ho te ls are dense ly-populated venues. Hotel fires often break out when guests are in sleep and most of them are not familiar with the hotels where they stay, making escape difficult. According to BS79742, statistics from hotels with good fire facilities and fire safety management show that it takes 15 minutes for 99% of the personnel to start evacuation from a fire.

III. Fire safety risks in the luxury hotel construction process

In every stage of hotel construction, there is a possibility of accumulation of fire safety risks. This is particular the case of the design stage, the procurement stage, the construction stage, and the verification stage.

1. The design stage

As different design institutions and their designers have different qual i f icat ions and sk i l ls , f i re safety designs even based on the international standard may still have safety, economy or feasibility problems of one kind or another.

Fire safety consists of two parts: st ructure f i re sa fe ty and f i re protection system safety. As for structure f ire safety, the main risks are reflected in the division of fire compartment and evacuation safety. As for fire compartment, many architects tend to set up fire resisting shutters at each floor of the hotel atrium. However, this often increases the cost of investment a n d s a c r i f i c e s b e a u t y, w h i le requiring strict fire compartment. Accord ing to the f loor space, the State nevertheless permits making the atrium into a separate fire compartment, as long as the following designs are ensured:

Room doors and windows that are connected with the atrium corridor should be equipped with self-closing Class B fire doors and windows;

Halls and passageways that are connected with the atrium should

Note：2. BS7974: Application of fire safety engineering principles to the design of building.

Type of BuildingFire Load Density (MJ/m2)

MeanFractile

90%80% 95%

Dwelling 780 870 920 970

Table of Fire Load Densities in Common Venues

420 570 670 760

600 900 1100 1300

Hospital

310 400 460 510Hotel Bedroom

Office

Shop

Note: 1 kg of wood has a heat of combustion of ≈20MJ

230 350 440 520

be separated by Class B fire doors or fire resisting shutters with duration of fire resistance >3.00h;

The corridor on each atrium floor should have an automatic sprinkler system;

The corridor on each atrium floor should have an automatic fire alarm system;

The atrium should have a smoke evacuation system.

This can ensure the safety of the hotel atrium, maintain its beauty and save investment cost. One example is the Poly Crowne Plaza Hailing Island which opened to business recently. Bureau Veritas as the fire safety consultant to the Hotel carried out the above fire safety optimization for the hotel atrium, creating a value of several millions of RMB for the Hotel.

As for evacuation safety, natural lighting and ventilation must be adopted for enclosed staircases, smoke proof staircases and vestibule, which are close to outer walls and have no positive pressure ventilation. In many situations, however, hotels’ outer walls are integral curtain walls. Their open windows or window positions are too high to be reached or operate. This poses a great evacuation safety threat.

As for fire protection system safety, the main risk is related to the irrational selection of fire control system models. For various reasons, for example, design academies often design automatic fire water monitor for hotel lobbies, banquet halls and other similar tall spaces. In addition to their high cost, automatic fire


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monitor are after all an open system. To prevent their misoperation from causing property loss or business interruptions, their plumbing pipes are mostly intentionally closed during hotel operations, making them exist in name only. In fact, the State stipulates that sprinkler protection can be set up for non-warehouse spaces of no more than 12m in height. Shanghai’s local fire safety specification provides that sprinkler protection can be set up for non-warehouse spaces of no more than 18m in height. This is in line with the practice in North America, which features a high level of recognition of automatic sprinkler systems’ economy, safety and reliability.

More importantly, many design academies fail to consider the characteristics of hotels in their design work. These include: add a buzzer base to bedroom smoke sensors to ensure hotel guests can sleep soundly, set up sprinkler protection in linen chutes, erect dry sprinkler head in refrigeration houses which humans can enter, and design DN50 emergency release valves and drainage standpipes behind spray water indicators.

2. The procurement stage

Fire safety risks in this stage are mainly reflected in two aspects: improper goods and irrational trade-offs.

I n s o m e p ro j e c t s , t o o m u c h emphasis is placed on investment saving, resulting in the procurement of sprinkler systems manufactured by small factories in Fujian and Zhejiang provinces. The durability and reliability of these products are

a cause for grave concern. After a long time of use, the mixed liquid in the glass balls of the nozzle will evaporate, making it impossible for the sprinkler head to break and spray water to extinguish fire. In some cases, pressure resistance damage to p ipe networks and serious rusting can lead to water inf i ltration and leaks, causing serious damage to hotels with luxurious decorations. Another manifestation of improper goods is that poor goods are often pretended to be quality products. In breach of contractual provisions, suppliers may provide low-end or false products. If not promptly spotted, such practices may cause grave harms.

Irrational trade-offs are reflected in lack of comprehensive attention in the procurement of fire protection systems, especially key equipment. For example, when hotel personnel purchase a fire alarm system, they often pay little attention to the fire broadcasting system, neglecting its brand and quality. In fact, the fire broadcasting system is also an importance facility for personnel to escape sa fe ly and prevent injury in the event of a fire. Poor fire broadcasting systems suffer extremely poor reliability and are prone to fail. Their horn sound is also seriously distorted. Another example is the extended coverage sidewall sprinkler. This is a hi-tech product. Only those from internationally-known suppliers have received authoritative FM or UL certification. But in real projects, ordinary side wall sprinklers with a big flow rate (K=115) are also purchased. This technically defies the original designed conditions, requiring the

3


addition of side wall sprinklers or a change to a pending sprinkler layout. This is bound to damage the aesthetic view of hotel rooms.

3. The construction stage

The biggest problem in the construction stage is poor sprinkler pipe network construction quality, which leads to inadequate pipe pressures. To prevent water infiltration, the action pressure of the safety relief valve is set to a fairly low level (apparently lower than the spray pump’s head) after the system commissioning and acceptance is completed. The result will be that in the event of a fire, the water of the fire pump will flow into the fire pool rather than the water pipe, making it absolutely impossible to reach the designed flow and causing poor extinguishing effect.

Another major problem in the construction stage is related to the fire proof clogging of hidden works. Five-star hotels are required to make proper clogging when their pipe lines run across firewalls which have a fire resistance class of 2h or higher before the ceiling board is sealed. This is both a fire safety requirement and a sound muffling necessity. In addition, shutters’ fire safety structure inside the ceiling is also an important aspect for consideration. Otherwise, the integrity of fire safety zones cannot be guaranteed. Because these works are hidden ones, their blocking often does not receive enough attention from both the constructor and the property owner. Fire blocking problems are also reflected in incorrect blocking materials or processes,

abuse of cement mortar for blocking purpose, failure to make sufficient co n s i d e r a t i o n o f t h e t y p e o r d imension of p ipel ines under blocking, incorrect use of support reinforced concrete, fire clay, fire-proof bag, fire-proof collar or other blocking materials.

Other problems in the construction stage include lack of sufficient c o n s i d e r a t i o n t o o p e r a t i n g convenience of valve position, such as overhaul valve position or emergency relief valve height, and so on.

4. The verification stage

Problems of this stage are mainly reflected in “valuing commissioning & acceptance procedures but overlooking functional commissioning itself”, a rather common practice in

V. Conclusion

With reference to practices in developed countries in Europe and America, universities in China now offer bachelor degrees in fire safety engineering. Many of the master degree programs on safety engineering are also focused on fire safety engineering. From 2014, China will implement a system of registered fire engineers. This is no doubt an indication that the currently emerging role of fire safety advisors will be fully promoted in the future.

Letting specialists provide specialized fire safety-related technical services can fundamentally enhance the safety of fire safety design, fire protection facilities procurement, fire safety construction, and fire safety verification work. BV

IV. Fire safety risk control over the entire construction lifecycle

For every 300 events that happened, there are definitely 30 accidents. And, one of these 30 accidents must be one with serious consequences (fatal or causing heavy losses). This


Target: Safety, Feasibility & Economy

Target: Quality Ensure

Target: Function Ensure

Target: Risk Control

Action: Providing SolutionOptimizing DesignReviewing Drawing

Action: InstallationInspection

Action: Commissioning and Testing

Action: Periodic Testing

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fire safety infrastructure construction in China. Facing the pressure to open to business as early as possible, hotels often make hasty commissioning after construction work is over. This is mainly reflected in:

Inaccurate description of terminal fire equipment positions;

Not all detectors, manual alarm, fire hydrant remote start pump button remote and other terminal equipment have undergone functional test;

Fail to meet hotel management company’s requirement for fire confirmation three minutes after detection by smoke sensor;

Smoke exhaust control system not adjusted to the sufficient air volume and smoke exhaust rate, and some high fire value cannot be reset;

Gas leak detection alarm and shutdown system not fully adjusted or turned on;

Many sprinkler system signal valves in a constantly closed mode, resulting in pipe network blocking;

Partial failure of dual power

changeover or master/standby pump changeover functions;

Not all fire pump startup functions are in place, especially spray pump startup by the wet alarm valve pressure switch, and fire hydrant pump startup by the remote start button;

Chaotic fire linkage relationships and failed automatic linkage with fire safety facilities.

In this stage, the property owner and the fire engineering constructor put more of their time and energy to the test procedures by the third party company and the acceptance procedures by the fire protection authorities to ensure that they can obtain the relevant legal documents before opening to business. The risks resulting from the regulations are inestimable.

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is the well-known law of accident in safety engineering. It shows that risks are an objective existence and when quantitative change reaches a certain degree, it is abound to cause qualitative change, with accidents and even disastrous consequences inevitably emerging. The fundamental way to avoid accidents is to control the risks in the various stages of the building lifecycle, interrupt the event chain and reduce the number of events.

FIRE

FIRE SAFETYARCHITECTURE

ELECTRICALPLUMBING

HVAC

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Design Construction Verification Operation

project managing tool in the state-owned investment environment. The superv is ing company has been defined as one of the four responsible bodies, along with the Client, Design Institute and Construction Contractor. Therefore, t h e s u p e r v i s i n g c o m p a n y i s also a tool of the government’s c o n s t r u c t i o n m a n a g e m e n t department, and has the following positive impacts on the improvement of construction management and investment returns:

Downsized / To downsize Client’s construction teams and reduced /


Bureau Veritas Construction Business Line, Qicai WU

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The system of supervision over construction projects was estab-lished according to the concept of international engineering consulting in 1993, and was signed into the Construction Law enacted in 1997, the Regulation on the Quality Man-

agement of Construction Projects, the Administrative Regulation on the

Work Safety of Construction Pro-

ject, No. 86 Decree of the Ministry of

Construction and other supportive documents. These laws and regula-tions established the legal status of China’s supervision system and are enforced by legal and adminis-trative power.

T h e “ m a n d a t o r i n e s s ” o f t h e mandatory supervision system is not only reflected in the provision t h a t c o n s t r u c t i o n p r o j e c t s conforming to specific conditions must be entrusted for supervision according to the corresponding legal procedures, but also in many other aspects. These include the responsibilities of supervisors, the contents and scope of services, work standards and procedures, market entry and qualification management.

The mandatory supervision system is the product of the planned economy and the construction

BUREAU VERITAS SUPERVISION, PROVIDE HIGH - END QUALITY CONTROL SERVICES FOR CONSTRUCTION PROJECT

construction market

Rich quality control experience and network support worldwide

Complete professional support and excellent technical capabilities of Bureau Veritas’s engineer team

Good communication skills of Bureau Veritas’s engineers in Chinese and English, guaranteeing smooth communication with foreign partners

With these advantages, Bureau Veritas has developed the strategy to provide high-end services for the quality control of construction pro jects in China. Under th is strategy, Bureau Veritas officially carried out close cooperation with Beijing Huaxia Supervision Co., Ltd. in 2012, and obtained China’s license for legal supervision businesses, which enables Bureau Veritas to provide supervision services for all foreign investment projects on the Chinese mainland.

Now, Bureau Veritas has undertaken the supervision responsibility of L'Oreal R&I Center expansion project, BLOGIS Wuhan project, BLOGIS Nantong Pro jec t and Marykay Hangzhou project. During the implementation of supervision services, Bureau Veritas adheres to the pr inciples of specialty, fairness, independence and service, and provides clients with high-end construct ion superv is ion services. Bureau Veritas’s work is well received by the construction management department, as well as Clients and contractors, revealing the vigorous vitality of its high-end supervision business.

Serious brain drain in the super-vision industry and low quality of basic-level staff

The problems in China’s supervision industry create big obstacles for for-eign investors to develop construc-tion projects in China. These mainly include:

Few options of an excellent supervising company for Clients

A large amount of labor and financial resources spent for supervision filing

Poor construction management capacity of the supervising company selected by tendering, causing difficulties in construction quality control

Difficult communication with supervising companies

Considering the above current status of the supervision industry, the construction industry is beginning to explore an effective solution and call for an organization which can provide real quality control services. As a leader in the global quality control business, Bureau Veritas entered China’s construction project consulting market in 1993. After 20-years development, Bureau Veritas has become the reliable partner of foreign owners investing in construction projects on the Chinese mainland. Bureau Veritas has the following advantages:

Rich experience in international construction consulting and a good reputation in many multinational enterprises

Familiar with China’s laws, the regulations of construction project management and the environment of China’s

to reduce their burdens

Reduced the construction cycle

Controlled the project investment and increased the investment returns

Improved construction quality

Facilitated the coordination of all parties

However, since the implementation of the supervision system, China’s economy and market environment h a s u n d e r g o n e t r e m e n d o u s changes. In the field of fixed-asset investment, private investment, foreign capital investment and private enterprise investment have exceeded government investment, and the market economy mode has gradually become the mainstream. U n d e r t h e s e c i rc u m s t a n c e s , the contradictions between the construction supervision system a n d t h e m a r ke t e co n o m y a re increasingly prominent, which are mainly reflected in the following aspects:

The deviation of the positioning of supervision system from the original intention

The vicious cycle of the supervisi-on system

Flaws in the laws and regulations related to construction supervision

Regional barriers and local protection of the supervision market

Diversified demands of supervisi-on investors

High probability of economic corruption in the supervision system BV

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THE WORLD’S LEADING PROFESSIONAL PROJECT MANAGEMENT ASSISTANCE & SUPERVISION SERVICES PROVIDER FOR

CONSTRUCTION INDUSTRY

CONTACT-Web: www.en.bureauveritas.cn-Mail:[email protected] [email protected]: +86 (21) 23190229, 23190240 Fax: +86 (21) 68757502

Permitting Application Assistance

Tender Management

Design Management

Schedule, Quantity & Cost Monitoring / Management

Quality Assurance / Quality Control (QA / QC)

Construction Site Environmental, Health & Safety Management

Testing & Commissioning Supervision

Grade A for municipal works

Grade A for building

Grade A for petrochemical

Grade A for power utility installation

Grade A for equipment supervision

Grade B for mechanical & electrical installation

Project Management Assistance Services Construction Supervision Licenses

Bureau Veritas Global Sourcing Service Department, Ruilin FAN

I. Multinationals’ Sourcing Strategies in China

Among all the low-cost countries, China may be the only one which can produce all categories of goods, and no multinational company can ignore sourc ing from the

Global sourcing refers to looking for suppliers around the world through the sophisticated and globalized information and logistics networks, in order to purchase reasonably priced products or raw materials that meet the quality requirements and thus reduce costs and enhance the core competitiveness of the company. Today, in the middle of the 2010s, more and more companies have found that global sourcing can bring great advantages, and it is important to use the distributed resources around the world to build up a global supply chain network and obtain a unique competitive edge.

In the midst of this trend, China is undoubtedly the biggest beneficiary. With the successful transit ion

to a market-oriented economy over the past 30 years, abundant a n d c h e a p l a b o r re s o u rc e s , and a manufacturing base with comparative advantages, China has become the first choice for global sourcing of companies in various industries. More and more companies have established their cross-border sourcing centers in China to serve their global supply chains.


Chinese market. However, different companies have quite different attitudes and strategies towards sourcing from China. Based on our previous experience, the sourcing strategies of multinationals in China can be broadly divided into the following three levels:

1. Trial

Many companies have realized the importance of the Chinese market, but for various reasons, they only try to buy some basic commodities from China, such as consumables. Bureau Veritas has provided some basic services related to quality control for a large number of such customers, including pre-shipment inspection and shipping control. This

MULTINATIONALS’ SOURCING STRATEGIES IN CHINA


II. Models of Multinationals’ Sourcing in China

Under normal circumstances, the procurement activities of multinational companies in China are conducted in the following three models:

1. Trading Agency

Trading Agency is the most simple and direct sourcing model, which can help companies look for suppliers, select products, negotiate the prices and follow up the order fulfillment and logistics. However, it is difficult for companies to establish deeper and stabler cooperation relationships with the suppliers through it.

2. International Sourcing Office

T h e m u l t i n a t i o n a l co m p a n i e s

level of sourcing is not integrated into the major supply chains of such companies. And it is just a trial, which can help multinationals to get a general understanding of the operational processes to source from China, but it is very difficult to gain a competitive advantage or a substantial reduction of their costs through this.

2. Component / Raw Material Sourcing

Many multinational companies choose to source components/raw materials from China, with a view to purchasing certified products with the lowest possible costs. With this level of sourcing, companies and their suppliers will generally form some kind of cooperation relationship, and the companies can get some cost advantages relative to their competitors which input fewer efforts into cross-border sourcing. At this level, the companies will not only care about the products themselves, but will also take the qualification and the supply capacities of the suppliers into account. Bureau Veritas has provided supplier screening, audit and other related services for customers from various industries including petroleum, chemical, pharmaceutical and FMCG, such as GEA and L'Oreal, to help them to select the right suppliers to establish cooperation with.

3. Comprehensive Sourcing

Some large companies expand their sourcing scope from components/raw materials to product design, R&D, engineering and other services and human resources. At this level,

the companies have established in-depth relationships with their suppliers and can provide all kinds of support to help the suppliers enhance their abilities to produce higher value-added products, and thereby reducing the dependence on the high-cost (high-tech) countries. As a strong partnership has been established with the suppliers, the comprehensive sourcing can help companies build unique competitive advantages and barriers. The best example for this level is Apple. With decades of accumulation in the industrial field, Bureau Veritas has provided supplier capacity development services for many industr ial companies, such as Nanjing Zhongjian and Anson, to help them improve the management level and technical ability to meet the strict requirements of multinationals.

establish local sourcing offices and employ dedicated sourcing teams to screen, select, assess and develop suppliers, which are responsible for all the matters from logistics to order execution. Through their own teams, the companies may have a better understanding of their suppliers, and are able to conduct a tighter control on the production processes and products. Similarly, through the sourcing offices, the companies may also establish a direct and long-term cooperation with the suppliers.

3. Subsidiary

The mult inat ional companies establish the local subsidiaries (for production, marketing, operation, etc.) with their own capital, and operate their sourcing projects in China through these subsidiaries. This model requires more capital investment and efforts, and can play a same role as the sourcing office in terms of sourcing.

For multinational companies with long-term and stable sourcing requirements, and large sourcing v o l u m e s , t h e y o f t e n u s e t h e second model, i.e. establishing international sourcing offices. It can reduce the sourcing costs and optimize the sourcing cycles, and can also promote the sufficient transfer and sharing of the sourcing requirements and information within the company. So far, Bureau Veritas China has established strategic cooperation relationships with the Chinese sourcing centers of dozens of multinational companies, such as Alstom, Walmart, Codelco, Anglo American and Eramet, to provide various types of sourcing-related support services.

consider how to control the quality and delivery of the products, and maintain its supply capacity in a long time, which is an important issue for sourcing management. Comparing with local buyers, the foreign buyers might need to spend more resources and efforts monitoring the delivery processes of their suppliers. And because of the absence of a mature local technology team, it is difficult for the buyer to achieve a good mon-itoring effect by only relying on its own strengths.

For those multinationals sourcing in China, there is no universal general rule. The companies need to keep learning in practice, adjust their strategies and sometimes even rely on external forces to achieve the sourcing objectives. Since entering China more than 20 years ago, Bu-reau Veritas has been committed to providing multinational companies with support for their sourcing in China and helping these companies cope with various challenges of glob-al sourcing. The way ahead is long and hard. Faced with the increas-ingly complex trading environment, Bureau Veritas will continue its efforts to provide more comprehen-sive services to help multinational companies achieve their sourcing strategies in China.


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III. Challenges for Cross - border Sourcing

2. Screening and assessment of suppliers

In the supplier screening and as-sessment process, due to language barriers, different levels of under-standing of the rules and other reasons, Chinese suppliers are gen-erally not quite mature. It is very dif-ficult for foreign buyers to integrate all aspects of information to assess the ability of suppliers.

3. Negotiation with suppliers

During the negotiation with suppli-ers, we must take the local business cultures into full account. In China, "guanxi" are very important for business negotiations. Without good "guanxi", the customers are difficult to obtain preferential treatments in terms of quality, price or delivery time. For the multinational compa-nies as newcomers, they are often at a disadvantageous position in the business negotiation due to the lack of local connections.

4. Monitoring suppliers

After choosing a supplier and es-tablishing a contractual relation-ship with it, the company needs to

As a developing country, China is quite different from the developed countries in terms of the trade policy, market environment and other aspects. At the same time, there are also huge cultural dif-ferences between the East and the West and between different countries. Like other business ac-tivities, the sourcing activities of multinational companies in China are also faced with a considerable number of risks and challenges. Based on the previous cases, we believe that the mult inational companies might encounter the following challenges during their sourcing process in China:

1. Looking for suppliers

In developed countries, the informa-

tion about suppliers are often more

sufficient and complete. With the

proper information platforms, buy-

ers are able to get access to the in-

formation on the potential suppliers

at a very low cost and lay a founda-

tion for the subsequent screening

process. But in China, the suppliers’

information is often trivial and frag-

mented, and the credibility of most

is doubtful. It is difficult for buyers

to obtain complete and reliable in-

formation to compare suppliers.


Bureau Veritas Industry & Facilities Division, Chen MA

When talking about the sourcing of

industrial products, we are familiar

with the following scenarios: qual-

ity defects are found during a key

process at a later stage of a project,

leading to massive rework and delay

of product delivery; due to incon-

sistency of technical standards of a

project, the owner requests an extra

inspection process; a factory is too

overloaded to deliver the products

on time and has to subcontract

some workload, and the client has to

pay more money... in order to solve

these problems, a lot of sourcing

services are made available, such

as typical third-party inspection ser-

vices, project management services

and trade agency services.

Supplier Technical Assessment

(STA) is a successful practice to

resolve conflicts and optimize solu-

tions. Most of the work of STA is

done at the early stage of sourcing,

but its outcome is applied in the

management of the entire sourcing

process, and can complement other

management measures effectively.

SUPPLIER TECHNICAL ASSESSMENT: HELP SOURCING MANAGEMENT TO MOVE FORWARD WITH CONFIDENCE

Based on the supplier audit project

conducted by Bureau Veritas for an

international oil giant during the pe-

riod from 2010 to 2012, this article

provides a summary from the three

aspects on how the STA services

help clients achieve better sourcing

management process. This project

includes the capacity assessment

for more than 200 suppliers of 15

categories of products around the

world for the client, and facilitates

the implementation of its global

sourcing strategy through develop-

ing improvement and control plans.


I. Understand requirements: suit-

able weighs more than good

The requirements of customers

sound very simple and it seems

that Bureau Veritas just needs to

follow the assessment outline of

the customers and rate the sup-

pliers. However, it is a primary

challenge to clearly understand

and define the customer needs.

For example, during the prepara-

tion process of steel products, we

found that most of the operation

of the customer is conducted in

the high-latitude waters, the win-

ter is as long as 4-5 months, and

the low-temperature is as low as

-40oC, which requires supplier to

II. Customize questionnaire: magic

book for assessment

"One minute on the stage requires

ten years of hardworking." This say-

ing is totally true for the supplier as-

sessment. We only have at most 2-3

days to conduct assessment at the

factory, during which we also need

to visit to various departments, so

the time is very limited. In order to

achieve optimal assessment results

within the limited time, a well-pre-

pared assessment questionnaire is

essential.

be capable and experienced in the

manufacture of steel structure

components for low-temperature,

involving business quality, person-

nel qualifications, supply of raw

materials, welding equipment,

welding technology support, NDT

techniques, laboratory tests and

other requirements.

There are many other s imilar

requirements. If we just assess

in general whether the capacity,

performance, facilities and other

indicators of the steel supplier

are good or not, we cannot make

a judgment based on such special

needs of the customer. From this

point, to understand what the cus-

tomer wants is the prerequisite to

know what is right, and this is

the most important goal for the

services.


How to customize the assessment

questionnaire based on the under-

standing of customer needs? This

process can be described as a full

integration of knowledge and ex-

perience. In respect of knowledge,

we shall fully understand the pro-

duction process, and also know the

technical indicators of customer

needs; in respect of experience, we

shall be familiar with the production

control processes and methods of

the factory, and can grasp the key

nodes and links therein.

Based on these two respects, we

can design the assessment ques-

tionnaire in a selective way to guide

the on-site assessment and grasp

the key points.

For example, when we assessed the

welding process of a pressure ves-

sel factory, the customer's project

team highlighted that the welding

quality records and documentation

was an important part for the quality

inspection of the project. Therefore,

besides the existing five aspects in-

cluding human, machine, material,

method and process, our team also

focused on the welding self-exam-

ining process, personnel and design

of records and documents, and also

observe the actual work and collect

the relevant documents and records

during the on-site assessment.

After careful analysis, we found the

welding operation of the factory was

conducted by several experienced

welders, who can ensure effective

self-examination for those prod-

ucts which they were familiar with,

but the new technologies and new

products were not well documented,

and there were no corresponding

records. After we pointed out this

problem, the customer and the fac-

tory made positive improvements,

which laid a solid foundation for the

subsequent success of the project.

and its quality management and

control system are not very effec-

tive, then the customer will engage

a third party inspection company to

arrange engineers to conduct on-

site supervision when placing an or-

der; Factory C has rich experience in

international projects and its coating

production lines and NDT depart-

ment are not in the same area, then

the customer can arrange a project

coordinator active communication

to facilitate the cooperation between

various departments and ensure the

efficiency of the production.

When giving an assessment sum-

mary, we shall bear in mind that

each factory has its own capability

characteristics, we cannot simply

say it is good or bad, and the most

important thing is whether it fits the

customer’s needs. Only when we

have identified the gaps therein, we

can select appropriate supplemen-

tary services in a more definite

and effective way to meet the ex-

pectations of the sourcing project

of the customer.

In a word, Supplier Technical As-

sessment (STA) is an important part

of the sourcing services of Bureau

Veritas, which can help the customer

to identify the needs and priorities of

the sourcing project management in

a better way at the early stage of the

sourcing and enable the customer

to be well prepared and control the

situation effectively.


BV

III. Summarize findings: customer

needs oriented

After the on-site assessment pro-

cess, we shall compare the suppli-

er's capacity in all aspects with the

customer's needs, and then identify

the current situation and the gaps.

If the customer decides to source

from this factory, we can work out

an appropriate control program by

taking such information into account

to implement the initial plan of the

sourcing in a much more efficient

way. Of course, these control pro-

grams are not static and they are

subject to adjustments according to

the changes of the cycle, workload,

technical standards, lead time and

other factors of the purchase order.

For example, steel piles are of the

greatest demand in the oil industry.

Bureau Veritas is engaged by the

customer to assess different suppli-

ers which have different advantages

and characteristics. Different prob-

lems require different project man-

agement solutions. For example,

Factory A is specialized in American

Standard products, but its capacity is

difficult to meet the requirement for

large quantities, then the customer

will tend to place small orders for

American Standard products; Facto-

ry B is a well-equipped new factory


HOW TO MAKE YOUR QUALITY MANAGEMENT MORE OUTSTANDING?

Bureau Veritas Certification Department, Fanny ZOU

In the past decade or so, enterprises’

quality management has undergone

tremendous changes. ISO9000 1987

has progressed to ISO9000 2008.

Starting from the 2000 edition, the

standard has expanded from being

only applicable to the manufacturing

industry to including the service in-

dustry as well. The number of certif-

icates issued by ISO increased from

over 40,000 in 1993 to more than

1.1 million at the end of 2011. Such

changes show that quality manage-

ment is more and more important

to the development of enterprises.

Then, how to make your quality man-

agement more outstanding? This is a

problem that every enterprise needs

to consider and a challenge that fac-

es all enterprises.

Everybody knows that promoting and

establishing a quality management

system is mainly to put forward a vi-

sion for employees, formulate stand-

ards for employees, establish incen-

tive mechanisms in companies, set

goals and help companies to change

and build a better future. Many en-

terprises have been building quality

management systems for many years

and making continuous improvement

through PDCA cycles. However,

we still find problems of one sort

or another in enterprises’ opera-

tion processes. This is related to

the initial intention of our quality

management. Statistics show

that 85% of enterprises build

quality management systems

only to get a certification, while

10% do so in an active effort to

meet the requirements of the

international standard. But, only

5% outstanding enterprises are

for the purpose of performing

outstanding management and

achieving sustainable corporate

which one company undertakes

of another company. It is also

known as supplier audit. Auditors

of second party audit usually come

from one side (the demanding

party) which carries out audit. The

demanding party may also invite

external personnel to carry out

second party audit or entrust one

audit body to do it. Different from

enterprises’ self-audit (first party

audit) and management system

certification (third party audit) in

the usual sense, second party au-

dit involves no issue of certificate.

Rather, an audit report is submit-

ted to the customer. Second party

audit is a process in which third

party companies use various man-

agement system standards as the

basis and add customers’ special

requirements, based on their full

understanding of customers’ prod-

uct management requirements.

Audit services may also be cus-

tomized based on various factors,

including buyer’s business model,

industry specifications, regulato-

ry requirements, budget, depth

of technical knowledge required,

supplier’s service level and risk se-

verity. Outsourcing monitoring and

audit tasks to professional audit

companies has gradually become a

trend of partnership models in sup-

ply chain management. The supply

chain will eventually benefit from

the impact of synergetic actions.

The only way for us to make our

quality management more out-

standing and build lasting com-

panies is to achieve sustainable

development with our suppliers!BV

development. Many enterprises accept

the standard without fully understand-

ing it. Getting a certificate is their most

urgent need. However, they ignore to

slowly integrate the standard into their

management and make it an indispen-

sable management tool.

Based on their understanding of

certification over the past ten years,

many enterprises have started to think

about many questions: why to under-

take certification? Can management

systems standard as a summary the

best practices of the world’s signpost

enterprises bring about values other

than a certificate? How to make enter-

prises’ quality management more out-

standing? Many enterprises have also

started to adopt world-leading man-

agement models, such as the Deming

Award, the Malcolm Baldrige Award,

the EFQM Model and Award, the Na-

tional Business Excellence Models and

Awards, the Balanced Score Card, etc.

Whatever the model, the ultimate goal

of outstanding quality management is

to help enterprises to achieve sustain-

able development.

What is sustainable development? Sus-

tainable development is development

that meets the needs of the present

without compromising the ability of

future generations to meet their own

needs (the definition given by the 1987

World Environment and Development

Committee). In other words, it requires

enterprises to take a long-term view

and pursue long-term interests and

make them healthy in the long term,

rather than merely focusing short-

term benefits.

The way to make them healthy and

lasting is to have a healthily run-

ning system which can ensure a

balance between economic, envi-

ronmental and social responsibili-

ties. This system includes supplier

management. Our tradit ional

requirements for suppliers are

that they should keep prices low,

provide high-quality products and

services, ship products fast, meet

personalized needs and reduce

cost for customers. As far as the

current competitive environment is

concerned, we need to pay atten-

tion not only to these but also to

whether suppliers are in a healthy

state, including their environmen-

tal, ethical and social performance.

Many multinational companies in

the world have made many efforts

in this regard. In most cases, these

companies entrust third party

bodies to audit suppliers in ac-

cordance with some international

environmental, ethical and social

standards and the some special

requirements of industries. That

is what we call second party audit.

For example, the Phillips Group has

entrusted Bureau Veritas to audit

their suppliers in accordance with

the code of conduct in the electric

appliance industry, including qual-

ity, environmental, health, safety

and social responsibility require-

ments. So far, many enterprises

have entrusted Bureau Veritas to

undertake second party audit of

their suppliers worldwide. These

entrusting companies include LV,

the GUCCI Group, Kerry Company,

Accor Hotel, Starbucks, Nestle,

Dairy Farm and so on.

Second party audit is the audit


Documents

Bureau Veritas Helps Foreign Direct Investment Move Forward With