Procurement Policy - Home | Nutrien Policy 3/25 TABLE OF CONTENTS SECTION I – GENERAL 5 1. Purpose...

Procurement Policy

January 1, 2018, v1

Procurement Policy2/25

Procurement Mission Statement:

Creating and sustaining competitive advantagesthrough innovative supply chain strategies that supportNutrien’s priorities and foster long-term partnerships.


TABLE OF CONTENTS

SECTION I – GENERAL............................................................................................................................................. 5

1. Purpose.............................................................................................................................................................5

2. Introduction......................................................................................................................................................5

3. Definitions ........................................................................................................................................................5

4. Scope ................................................................................................................................................................7

5. Authority and Management .............................................................................................................................7

6. Core Procurement Roles and Responsibilities ..................................................................................................7

7. Associated Policies and Documents .................................................................................................................8

8. Procurement Principles ....................................................................................................................................8

SECTION II – PROCUREMENT GOVERNANCE ........................................................................................................ 11

1. Introduction....................................................................................................................................................11

2. Sourcing and Purchasing ................................................................................................................................11

3. Supplier Qualification .....................................................................................................................................13

4. Supplier Relationship Management (SRM) ....................................................................................................14

5. Agreements and Contracts .............................................................................................................................14

6. Legal and Procurement are responsible for creating and maintaining contract and agreement templates,and related General Terms and Conditions. Contract Management and Administration .............................15

7. Maintenance, Repair, and Operating Inventory Management ......................................................................15

8. Risk Management ...........................................................................................................................................15

9. Procurement Effectiveness.............................................................................................................................16

10. Exceptions ......................................................................................................................................................16

11. Policy Violations and Consequences ..............................................................................................................16

SECTION III – SUPPLIER DIVERSITY AND INCLUSION............................................................................................. 18

1. Diversity and Inclusion at Nutrien ..................................................................................................................18

2. Definitions ......................................................................................................................................................18

3. Supplier Diversity Commitments....................................................................................................................20

4. Responsibility for Implementation .................................................................................................................21

5. Merit-based standard.....................................................................................................................................21

Appendix A: ......................................................................................................................................................... 23

Sourcing Requirements for Legacy PotashCorp Operations and Departments ..................................................... 23

Appendix B: ......................................................................................................................................................... 24

Sourcing Exception Requirements for Legacy PotashCorp Operations and Departments ..................................... 24


Procurement Policy Approval for Release:

This Policy has been approved for release by:

Name:

Title:

Signature:

Date:

Effective on the date signed.

pth1th

Typewritten text

Tim Herrod

pth1th

Typewritten text

VP, Procurement

pth1th

Typewritten text

January 1, 2018


SECTION I – GENERAL

1. Purpose

This Policy is intended to ensure that the procurement of all Goods and Services for Nutrien (the“Company”):

Is conducted in an honest, competitive, fair, sustainable, diverse, and transparent manner;

Is delivered through sound and sustainable business decisions;

Protects the reputation of the Company;

Considers the required specification, quality, service, delivery, reliability, environmental,legal, regulatory and social issues, and the total value of life-cycle costs; and

Is compliant to relevant Company procedures and best practices.

2. Introduction

This Policy, and the associated processes, procedures, tools, training and templates, provide theframework which governs Procurement at Nutrien and form the Procurement Operating Model.In conjunction with the required Enterprise Resource Planning (ERP) systems, processes andprocedures, including risk management, this framework sets the standards as well as defines theroles and responsibilities required to procure goods and services for the Company.

By defining clear expectations and rules, the Company may optimize its business processes,allowing its operations to become more efficient, effective and sustainable.

Diversity and Inclusion are of paramount importance to the Company. The framework to increaseinclusion of diverse Suppliers within Nutrien’s supply chain is presented separately within SectionIII of this Policy.

3. Definitions

The following are considered key concepts and are so defined for use throughout theProcurement Operating Model:

Goods: shall mean any third-party manufactured products or materials that are tangible in naturesuch as: Maintenance, Repair and Operations (MRO) supplies, spare parts, machinery, vehicles,equipment, etc. Goods can be consumed in operations, installed as components of capital assets,or stored for later use.


Services: shall mean any activity provided by third parties that are intangible in nature, i.e. are theproduct of human effort, such as: engineering, repair, maintenance, etc. Services are typicallyused in the engineering, design, licensing, construction, commissioning, installation, productionor maintenance of assets, cannot be stored, and are used immediately.

Contracted Goods and Services: shall mean goods and services available to be purchased underan executed agreement between a Supplier and Nutrien. These may be Site or Project-SpecificContracts, Master Supply / Services Agreements or License / Software Agreements executed atspecific or multi-site levels. These agreements shall detail the required scope of supply, pricing,commercial incentives and terms and conditions, among other key commitments andperformance indicators.

Enterprise Resource Planning (ERP): It is the integrated management of core businessprocesses, supported by such systems as Oracle and SAP.

Licence / Software Agreements: Shall mean all software, hardware, software licences and after-market services procured by Nutrien with any provider of a software product, whether it be an“on premises” solution or software as a service (SaaS) solution. Licence / software Agreementsmay be classified as either a good or a service.

Master Supply /Service Agreement (MSA): Master Supply /Service Agreements are typicallyutilized for longer-term procurement of Goods and Services and set out standard terms andconditions that apply to all transactions entered into between a Supplier and the Company. Eachtime a new transaction is executed, the terms of the MSA apply automatically and do not need tobe renegotiated.

Non-contracted Goods and Services: shall mean Goods and Services purchased throughPurchasing Card (P-Card) or Purchase Order (PO) without a relevant Contracted Goods andServices agreement executed between a Supplier and Nutrien.

Nutrien Business Units: Potash, Nitrogen, Phosphate and Retail business units of Nutrien, inaddition to the Company’s Corporate function, on behalf of which all goods and services areprocured.

Purchase Orders (PO): A commercial document generated by Nutrien which authorizes apurchase transaction. When accepted by the Supplier, it becomes a legally binding contract.

A Purchase Order sets forth the scope of supply, quantities, prices, payment terms, date ofperformance or shipment, Terms and Conditions (whether Purchase Order, MSA or otheragreement) and identifies a specific Supplier.

Purchasing Card (P-Card): A commercial credit card program which allows Nutrien to takeadvantage of existing credit card electronic procure-to-pay transaction infrastructure for avariety of lower risk, lower value and/or higher purchase frequency goods and services.

Site or Project-Specific Contracts: These are formal and legally binding agreements whichincorporate Nutrien Terms and Conditions as approved by Legal, utilized for one-off scopes ofsupply or specific project requirements.

Total Cost of Ownership (TCO): is the total sum of costs and related savings incurred over theuseful life (“life cycle”) of a good or service and includes as relevant: the initial purchase cost, all


direct and indirect operating and maintenance costs and benefits and disposal costs less anyrecovery value.

4. Scope

This Policy encompasses the procurement of all goods and services, and any related businessconduct required by or on behalf of Nutrien whether through purchasing, leasing or other means.

This Policy excludes those individuals engaged in the Retail Business Unit procurement,transportation, distribution, logistics and storage of natural gas and finished products which aregoverned by separate Nutrien policies.

5. Authority and Management

The Vice President, Procurement is the custodian of this Policy. Any changes must be initiated andmade with the approval of the Vice President, Procurement. In the absence of the Vice President,Procurement, responsibility rests with the next senior level of authority or designate.

6. Core Procurement Roles and Responsibilities

Procurement has the following core responsibilities to operate effectively on behalf of theCompany:

Act as a steward of the Company’s resources and reputation by providing clear Procurementleadership and maintaining the highest ethical standards;

Provide professional, qualified, strategic procurement expertise, advice and services;

Partner with the business units and functional teams to support Company business needs andobjectives in an effort to enhance standardization, innovation, risk mitigation and lifecyclecost savings;

Identify supply risks and opportunities by strategically managing and developing Nutrien’sSupplier base and commercial relationships;

Act as the interface and the principal point of contact between the Company and the externalmarketplace on all commercial matters;

Support diversity and inclusion and sustainability, throughout the Procurement processes;and

Manage and audit Procurement processes, contracts, Supplier performance and procurementefficiency.

The above-listed responsibilities are supported and reinforced by Nutrien’s overarching CoreValues & Code of Business Conduct, the Nutrien Supplier Code of Ethics, the Company’s core


business objectives and strategies and applicable corporate processes, procedures, practices andconditions.

7. Associated Policies and Documents

This policy does not supersede existing policies and should be read in conjunction and applied incompliance with all Company governance documents as well as any applicable laws, by-laws, rulesand regulations.

All personnel engaged in procuring goods and services on behalf of the Company must read thecurrent applicable policies and understand the requirements and how to comply with them.

8. Procurement Principles

The fundamental governing principles to which all personnel engaged in Procurement on behalfof the Company must adhere to are:

Transparency and Openness;

Business Integrity;

Efficiency and Sustainability;

Fairness and Non-discrimination;

Competition and Antitrust;

Accountability;

Diversity, Inclusion and Local Procurement Content; and

Labor and Human Rights as generally described within this section.

These principles set the framework for behaviors which manage Nutrien Procurementrequirements, complementing the Company’s Core Values and Code of Conduct and NutrienSupplier Code of Ethics.

8.1 Transparency and Openness

Throughout the Procurement sourcing process, relevant information regarding the process itselfand the Company’s expectations of Suppliers shall be clearly communicated as may bereasonably practicable.

8.2 Business Integrity

Procurement of Goods and Services shall be completed responsibly and with a high degree ofintegrity in compliance with Company policies and applicable laws, rules and regulations.


This includes using Company funds, resources, assets and authority in accordance with theintended official purposes, free from:

Corruption including bribery, “kickbacks” favouritism, nepotism, cronyism, and clientelism;

Fraud and theft of resources;

Conflict of interest, collusion, abuse and manipulation of information;

Discriminatory treatment; and

Waste and abuse of organizational resources.

8.3 Efficiency and Sustainability

Every effort must be made to drive sustainable business decisions through strategic alignmentwith internal and external Stakeholders in order to obtain the best lifecycle value-for-money forthe Company.

8.4 Fairness and Non-discrimination

All Suppliers shall:

Not be discriminated against based on race, religion, color, sex, national origin, age ordisability or by giving preferential treatment to anyone over another;

Be considered on a merit and compliance basis for all offers, bids, quotes and proposals;

Have the same evaluation criteria applied to all prospective Suppliers for a particularProcurement sourcing process; and

Be provided a forum for complaint.

8.5 Competition and Antitrust

To ensure competitive responses, qualified Suppliers shall be invited to participate in thebidding process and will be evaluated against each other on the same criteria.

8.6 Accountability

All personnel engaged in Procurement on behalf of the Company are accountable for theiractions and decisions and are responsible to ensure compliance to this Policy.

8.7 Diversity, Inclusion and Local Procurement Content

We recognize that having a diverse and inclusive workforce and supply chain aligns with ourcore values, makes the Company stronger and is critical to achieving current and future strategicobjectives. We are committed to becoming a company that supports diversity in age, gender,ethnicity, culture, religion, disability and sexual orientation and will seek to realizethis commitment.

All personnel engaged in procurement on behalf of Nutrien will drive supplier diversity andsupply chain accountability by taking measures to ensure the participation and competitiveness


of diverse and local suppliers and by encouraging the same behaviors and commitments amongour suppliers. Section III of this Policy details Nutrien’s Supplier Diversity and Inclusionexpectations for Procurement.

8.8 Labor and Human Rights

The Company acknowledges and respect workers’ rights to enter into collective bargainingrelationships and will not do business with Suppliers that impose excessive working hours orpoor or unsafe working conditions on their employees. Nutrien will not knowingly do orcontinue to do business with Suppliers that violate the United Nations’ Universal Declaration ofHuman Rights or the International Labor Organization’s Fundamental Conventions.


SECTION II – PROCUREMENT GOVERNANCE

1. Introduction

This Section II establishes the governance framework required to support the ProcurementOperating Model which consists of this Policy and associated Procurement processes, procedures,best practices, tools and templates.

This framework is designed to ensure the following Procurement responsibilities are carried outin accordance with Company priorities and strategies:

Consult with internal Stakeholders to understand their needs and requirements for supply ofgoods and services;

Develop strategies to meet short and long-term business needs and strategic objectives ofthe Company and internal Stakeholders, including product standardization, inventorymanagement and demand control;

Identify Suppliers that meet Nutrien’s qualification requirements and engage internalStakeholders in the communication and clarifications process with Suppliers in order toprovide Nutrien with overall best achievable value;

Leverage the Company’s collective purchasing power to improve value from Suppliers,generate savings and improve Total Cost of Ownership;

Engage relevant groups and functions within Nutrien Business Units such as Operations,Capital, Legal, Credit, Risk, and Accounting as required to facilitate successful businessdecisions and outcomes; and

Execute directly or through appropriate delegation to and support of (i.e. tools, templates,training) individuals within Nutrien business units, any or all activities related to procurement,including the bid process, Supplier negotiations and contract development.

2. Sourcing and Purchasing

Sourcing and purchasing are two important functions of procurement which are completedthrough a competitive Request for Information, Quotation or Proposal (RFI, RFP, RFQ / RFx)process as described within this section, also known as “bidding”.

VP Procurement or their designate shall approve all Sourcing processes which result in MasterSupply/Service Agreements.

Unless otherwise approved by the VP Procurement, Business Units operating within Nutrien aslegacy PotashCorp operations or departments shall be governed by the sourcing processrequirements as included within Appendix A of this Policy.


Unless otherwise approved by the VP Procurement, Business Units operating within Nutrien aslegacy Agrium operations or departments, shall be governed by the relevant Best Practices forPurchasing and Sourcing requirements.

Sourcing is the strategic activity of finding, evaluating and engaging Suppliers as required toacquire goods and services for the benefit of the Company. This process typically results in shortor long-term site-specific or multi-site Master Supply/Service Agreements, or specific one-offstandard contracts.

Nutrien will source through site-specific or multi-site Suppliers to meet the Company’s capital andoperational needs, objectives and priorities.

Purchasing is the day-to-day tactical activity of acquiring Goods and Services whether throughutilization of existing contracts or initiation of a strategic sourcing process.

2.1 Purchasing Requirements

The purchasing cycle starts with the RFx or Purchase Requisition and ends with the receipt of andpayment for Goods and Services in accordance with agreed terms and conditions. At Nutrien, thepurchasing process is supported by multiple Enterprise Resource Planning (ERP) systems.

Regardless of the ERP system utilized, the following requirements apply to the purchasing ofGoods and Services for the Company:

Unless an exception is sought and approved, goods and services may either be purchasedunder an existing Purchase Order, Standard Contract, or Master Supply / Service Agreement,or through a competitive bidding (RFx) process;

All commitments to purchase Goods and Services in should be made through Procurement;

All commitments of Company funds must be made in accordance with the Limits ofAuthorities established in Nutrien’s Signing approval authority policy and all other applicableCompany policies;

A Supplier may not under any circumstances be allowed to provide Goods and Services, orotherwise commence work, until the appropriate agreement or Purchase Order is executed;

A purchase requisition approved by the budget owner, and up to the proper approvalauthority level within the relevant ERP, is required prior to Procurement proceeding with anypurchase;

Purchase Orders and purchase requisitions may not be divided into smaller amounts orpackages to bypass Limits of Authority; and

All potential conflicts of interest must be declared before any purchases or initiatives areundertaken.

2.2 Sourcing Methods

The following requirements apply to Contracted Goods and Services:

If agreements are in place to supply Goods and Services to the Company, all applicablepurchases must be made under these agreements, unless an exception is granted; and


There are circumstances where utilization of contracted suppliers requires market testing butcompletion of a full RFx process is not required. Distribution of a scope of work per relevantMSA terms and conditions is sufficient.

The following requirements apply for all Non-contracted Goods and Services:

All scope, schedule and cost estimates provided to Procurement by internal stakeholders asrequired to undertake a sourcing process are to be based on reasonable expectations, derivedfrom previous experience and foreseeable consumption / utilization requirements;

Unless an exception has been granted, all agreements that fall within this category must becompleted on the Company approved templates for Purchase Orders, Contracts, andCompany standard terms and conditions; and

All procurement utilizing a Purchasing Card (P-Card) must comply with the requirements oflegacy PotashCorp and Agrium Procurement Purchasing Guidelines – Procurement Card.

3. Supplier Qualification

It is Procurement’s responsibility to ensure that all new Nutrien Suppliers meet the Company’sminimum qualification requirements prior to being considered to participate in an RFx process.

Pre-qualification is the ongoing process of creating, managing and maintaining a broad base ofSuppliers that meet Nutrien’s Supplier qualification requirements. This allows the RFx process tobe expedited through a short-listing and invitation to participate of pre-qualified Suppliers. Forthe purpose of this Policy, the terms pre-qualified and qualified shall have the same meaning.

The purpose of Supplier qualification is to:

Develop an approved Supplier list;

Maintain an up-to-date database of qualified Suppliers; and

Allow for a shortlist of Suppliers capable to provide goods and services to enable developmentof MSA’s or standard contracts.

The qualification process evaluates the Supplier status, performance and behavior in areas thatinclude but are not limited to:

Safety, Health and Environment (SHE);

Technical capability /expertise;

Financial health;

Ethics and Corporate Social responsibility;

Diversity and Aboriginal Content;

Quality Management;

Legal, confidentiality and Information Security;


Human Resource Management; and

Services and References.

4. Supplier Relationship Management (SRM)

Supplier Relationship Management is a strategic approach to developing and maintaining Supplierpartnerships. The focus of SRM is to develop two-way, mutually beneficial relationships withsupply partners to deliver greater levels of innovation and competitive advantage throughoutNutrien’s supply lifecycle than could be achieved by operating independently or through atraditional, transactional purchasing arrangement.

Through Supplier Relationship Management, Procurement shall:

Identify and collaborate with key strategic Suppliers;

Enhance the relationship through the exchange of information, regular meetings andformalized Supplier Performance management;

Leverage Supplier knowledge, capabilities and qualifications with the objective to deliverlifecycle cost savings; and

Strategically partner to maximize relevant supply chain visibility, improve security of supply,reduce supply risk exposure, ensure sustainable sourcing, promote mutual growth andmaturity and increase the agility of Nutrien’s supply chain by anticipating market dynamics.

4.1 Suppliers Site Visits

Supplier visits to facilities to meet with internal Stakeholders or Procurement personnel areallowed, and must be managed by Procurement personnel as per facilities access policy. At alltimes, care must be taken to ensure confidentiality and Procurement process integrity aremaintained.

4.2 Trials, Tests, and Samples

To remain an industry leader, Nutrien continually looks for ways to improve all aspects of itsoperations. This may require the Company to change Suppliers or access new technologies orproducts.

In cases where a trial order or sample testing is required to judge the work of a Supplier, or asrequested in collaboration with internal Stakeholders, Procurement will ensure clear assessmentcriteria are established and formalized, and an executed agreement is in place prior toundertaking such tests or trials.

5. Agreements and Contracts

All contracts and agreements developed for the acquisition of Goods and Services mustincorporate Nutrien Terms and Conditions appropriate to the supply, be negotiated by


Procurement in collaboration with internal stakeholders and be executed in accordance with theNutrien’s Signing Approval Authority Limits Policy.

Deviation from Nutrien Terms and Conditions must be reviewed and approved by the LegalDepartment prior to execution of the contract.

Any proposed amendment or exception sought to the contracting requirements must bereviewed and approved by the Legal Department as facilitated through Procurement.

6. Legal and Procurement are responsible for creating and maintaining contractand agreement templates, and related General Terms and Conditions. ContractManagement and Administration

In collaboration with relevant stakeholders within Nutrien Business Units, Procurement isresponsible for the commercial relationship with suppliers, while internal stakeholders areresponsible for the technical management of Supplier performance, such as managing productand service specifications, safety, reliability, quality, availability and work execution. Procurementis responsible for managing or otherwise coordinating all commercial matters with Suppliers andinternal stakeholders.

When utilizing an agreement, internal stakeholders are responsible for the day-to-dayperformance and compliance of the Supplier to all relevant Nutrien policies and procedures,including SHE requirements.

Commercial negotiations and commitments with Suppliers shall not be directly undertaken byinternal Stakeholders without prior timely engagement of Procurement personnel.

7. Maintenance, Repair, and Operating Inventory Management

Procurement, working jointly with Nutrien Business Units, is responsible for ensuring thebalancing of Goods’ demand and supply to support safety and reliability objectives of theCompany’s operations, proactively preventing disruptions to the supply chain, effectivelymanaging the forward and reverse flows of materials in the supply chain, and enabling andoptimizing Nutrien warehouse and inventory management processes, techniques, systemsrelative to industry best practices.

8. Risk Management

Procurement must be prepared to address risks that may cause disruptions in the Company’ssupply chain, from sourcing through implementation of Goods and Services in our operations. Keyrisk considerations regarding the safety, reliability, quality, availability, schedule, and cost ofsupply must be examined and mitigated as reasonably practicable through sound Procurementprocesses and resultant contracts. These considerations do not remove any requirement for a risk


assessment or other risk mitigation as may be relevant in compliance with Nutrien RiskManagement Policy.

9. Procurement Effectiveness

Procurement Effectiveness is a measure of benefits derived by Procurement as it sources Goodsand Services for the Company and shall be calculated in accordance with the Nutrien ProcurementEffectiveness Procedure. It quantifies the value generated, but not limited to, the following areas:

Price effectiveness including cost reductions, cost avoidance, volume rebates and discounts,improved payment terms or reduction in total lifecycle cost of ownership;

Supply base leverage and competitive bidding;

Supplier-enabled process and product efficiency improvement, innovation, flexibility andcontinuous improvement;

Supplier improved quality and performance, increased warranties, and after-sales support;and

Improved Terms and Conditions.

Procurement effectiveness claims will be internally audited and shall:

Not be reported unless financial benefit can be reasonably measured or estimated; and

Not be reported unless the benefit realized is the direct result of the Procurement process.

10. Exceptions

An Exception shall mean a deviation from the Procurement Policy and related processes and maybe granted under specific circumstances, as supported by evidence that the requested deviationis valid. These situations should be extraordinary in nature and not considered “business as usual”.

For those Business Units operating within Nutrien as legacy PotashCorp operations ordepartments, the requirements included within Appendix B of this policy shall govern.

For those Business Units operating within Nutrien as legacy Agrium facilities or departments,Single Sole Source Justification Best Practice shall govern.

11. Policy Violations and Consequences

This Policy is intended to maximize the Company’s purchasing power, streamline businesspractices, and reduce potential risks associated with contracting and other procurement-relatedactivities. Violating Company policies may carry disciplinary consequences up to and includingdismissal.


If anyone believes their actions have, or may have, violated this policy or any Company policieswhen engaged in procuring Goods and Services, they are advised to disclose the policy violationto their supervisor at the earliest possible opportunity. The supervisor is then further advised toconsult with the requisite department / management to review and address the issue.

If anyone suspects that a violation of policy has been committed by another person or Supplier,they are advised to promptly and confidentially report the concern to the Nutrien Complianceline. By following this process, confidentiality will be maintained and the matter will beinvestigated promptly and appropriately.


SECTION III – SUPPLIER DIVERSITY AND INCLUSION

1. Diversity and Inclusion at Nutrien

At Nutrien, we believe our business environment should reflect the diversity of our operatingcommunities.

We recognize having a diverse and inclusive workforce and supply chain aligns with our CoreValues, makes the company stronger and is critical to achieving current and future strategicobjectives.

We are committed to becoming a company that supports diversity in age, gender, ethnicity,culture, religion, disability and sexual orientation and seek to realize this commitment:

Through Human Resources where Nutrien works to remove barriers and biases in workforcehiring and employee development processes and to ensure that diverse groups can accesscareer and advancement opportunities at all levels of the company;

Through Community Engagement and Investment where Nutrien strengthens its relationshipswith key Stakeholders and supports research, partnerships, donations and sponsorships thatreflect the Company’s Diversity and Inclusion priorities; and

Through Procurement where Nutrien drives Supplier diversity and supply chain accountabilityby actively seeking out certified diverse Suppliers increasing their inclusion and participationand promoting diversity and inclusion best practices across our impactable supply chain.

These beliefs and commitments guide Nutrien’s approach to Diversity and Inclusion as it pertainsto Procurement, with an overall goal to build value for the Company, its Stakeholders, and thecommunities where it operates.

2. Definitions

The definitions below apply to the Company’s operations in Canada and the United States. Whilethese definitions may not apply to other countries, the spirit of this Policy section – providingequitable opportunities for all Suppliers – applies anywhere the Company does business.

LGBT means a business certified by the Canadian Gay and Lesbian Chamber of Commerce and/orthe National Gay and Lesbian Chamber of Commerce (US).

Certification means a process through which an enterprise is verified to be owned and controlledby an individual or individuals of an identified diversity group, and so eligible to participate inprograms designed to stimulate diversity business development;


Local Supply means all Goods and Services procured from a Supplier (local Supplier) that, inproximity to a Nutrien operating site is:

Within province or county/state or within Trinidad and Tobago as case may be, or withingeographic proximity – 100 km/60 miles; and

Has a physical operating (“bricks and mortar”) presence, has a management and workforcepresence; and is a properly registered operating entity.

Local procurement refers to the purchasing of Goods or Services from a Local Supplier.

Diverse Supplier means a business that is owned and / or operated by any individual or individualswho are recognized members of a group or community deemed by the governments of countrieswhere Nutrien operates to be socially and economically disadvantaged;

Qualified Diversity Supplier means any Supplier that has satisfied Company qualificationrequirements, is placed on the Nutrien Qualified Supplier list, and has also satisfied diversityrequirements as an Aboriginal-, Women-, or Minority-owned business enterprise.

A diverse Supplier business must be owned and /or operated by a person or persons who arecitizens or legal resident aliens of Canada, the United States or Trinidad and who belong to one ormore of the following groups.

2.1 In Canada

Aboriginal, visible minorities and women as recognized by:

Canadian Aboriginal and Minority Supplier Council;

WBE (Women’s Business Enterprises) Canada; or

Canadian Council on Aboriginal Business (pending January 2016).

In this regard, these certifying bodies recognize Canada's Employment Equity Act categories whichwill also be recognized by Nutrien to include:

Aboriginal peoples, persons who are First Nations (Indians), Inuit or Métis;

Visible minorities, persons other than Aboriginal peoples, who are non-Caucasian in race ornon-white in color.

In practice, the Government of Canada includes the following groups: Blacks, Chinese, Filipinos,Japanese, Koreans, Latin Americans, Pacific Islanders, South Asians and West Asians/Arabs;

In Canada, those entities that identify themselves as Aboriginal economic developmentcorporations may be a further category identified in tracing. Similarly, due regard may beprovided to Native American tribal entities.

2.2 In the United States

Minority and women-owned businesses as recognized by:

National Minority Supplier Development Council;


National Women Business Owners Corporation;

Women’s Business Enterprise National Council; or

National Association of Women Business Owners.

Generally, minority definitions associated with these certifications that will also be recognized byNutrien include:

Asian-Indian: any U.S. citizen whose origins are from India, Pakistan and Bangladesh;

Asian-Pacific: any U.S. citizen whose origins are from Japan, China, Indonesia, Malaysia,Taiwan, Korea, Vietnam, Laos, Cambodia, the Philippines, Thailand, Samoa, Guam, the U.S.Trust Territories of the Pacific or the Northern Marianas;

Black: any U.S. citizen who is of African descent;

Hispanic / Hispanic American: any U.S. citizen of true-born Hispanic heritage, from any of theSpanish-speaking areas of the following regions: Mexico, Central America, South America andthe Caribbean Basin only. Brazilians (Afro-Brazilian, indigenous/Indian only) shall be listedunder Hispanic designation for review and certification purposes; and

Native American: any person who is an American Indian, Eskimo, Aleut or Native Hawaiian,and regarded as such by the community of which the person claims to be a part. NativeAmericans must be documented members of a North American tribe, band or otherwiseorganized group of native people who are indigenous to the continental United States andproof can be provided through a Native American Blood Degree Certificate (i.e., tribal registryletter, tribal roll register number).

3. Supplier Diversity Commitments

Nutrien recognizes that the inclusion of diverse Suppliers (Aboriginal, Women, and Minority-owned businesses) creates a sustainable competitive advantage that benefits all companyStakeholders and positively impacts the global community. Supplier Diversity and Inclusionconsiderations are embedded throughout Nutrien’s procurement process.

Nutrien will make positive efforts to use diverse Suppliers (Aboriginal, Women, or Minority-owned businesses enterprises) whenever practical.

The Company will take the following steps to further this goal:

Seek out certified diverse Suppliers that can provide competitive, high-quality goods andservices and whose business model is aligned with Nutrien strategies;

Set global targets for the increased inclusion of diverse Suppliers in the Company’s supplychain, amplify benefit to their communities through strategic procurement, and ensure allNutrien personnel and Suppliers are accountable for Supplier Diversity performance;

Ensure the ongoing competitiveness of qualified diverse Suppliers in Nutrien operatingcommunities and that fair consideration is given to all qualified diverse Suppliers;


Participate in recruitment events and community and business development forums, inpartnership with local academic institutions and representative organizations to identifyqualified and emerging diverse Suppliers;

Maintain a list of qualified diverse Suppliers;

Participate in networking and sponsorship opportunities that benefit diverse Suppliers;

Direct procurement opportunities toward Suppliers that align with desired Nutrien outcomes,including Supplier Diversity and Inclusion mandates;

Work with diverse Suppliers to reduce barriers to participate in Procurement opportunitiesthrough training, scholarships and strategic community, social and business investment;

Promote diverse Supplier entrepreneurship in areas where Nutrien operates;

Enforce diversity protocols in all Supplier solicitations;

Require Nutrien Suppliers to report annually on Supplier Diversity performance;

Regularly set targets for Supplier Diversity increases within the Nutrien supply chain;

Communicate the value of Supplier Diversity to all Stakeholders, and report on progress onSupplier Diversity performance in the Annual Integrated and Sustainability reports to ensureaccountability for the Company.

4. Responsibility for Implementation

Each Nutrien employee with direct or indirect responsibility to procure goods or services for theCompany must take measures to ensure that qualified Aboriginal, Women and Minority-ownedSuppliers are given every reasonable opportunity to participate in the procurement process.

These measures are detailed in company Procurement training materials, backed by theCompany’s Core Values and Code of Business Conduct and subject to the laws of the jurisdictionsin which the Company operates.

Procurement will work further to ensure, through the Nutrien Supplier Diversity Implementationand Aboriginal Supply Chain Development plans, that qualified Aboriginal, Women and Minority-owned Suppliers are used to the fullest extent practical for our operations and that the Companyand its Suppliers are transparent and accountable regarding their Supplier Diversity performance.

5. Merit-based standard

Nutrien takes a merit-based approach to contracting and considers Supplier Diversity to be onecriterion for evaluating Supplier performance. Other areas of evaluation include, but are notlimited to, product and service quality, technical capability, total cost and safety performance.Suppliers deemed to provide the best overall value to Nutrien in these and other areas ofperformance will be awarded contracts for their goods and services.


Supplier Diversity is neither a social program nor a promise that participating companies willsecure business from Nutrien. The Company will under no circumstances compromise on thequality, cost, or service requirements expected of every Supplier.

When qualifying potential Suppliers and when purchasing on behalf of the Company, local,diversity and inclusion content considerations and weighting will be given to those businesses:

With 51% or more ownership, management, and control;

Area duly registered operating entity in the region;

Have physical operating presence in the region;

Have significant management and workforce presence in the region; and

Are Aboriginal / Minority-owned whether they are Aboriginal economic or communitydevelopment companies, First Nation Bands or individual(s).

Other factors in relation with Ownership, management and control will also be considered, suchas:

Whether economic participation is a constraint in the ownership structure initially;

Whether the parties chose a straight investment option only (with little to no managementand control interests); or

Whether the parties chose an incremental ownership structure over a reasonable period oftime.

evidence of planned management and control associated with ownership, which may occurfrom the outset or as capacity is developed, or

labor force development and participation.


Appendix A:

Sourcing Requirements for Legacy PotashCorp Operations and Departments

Table A1: Minimum Sourcing Requirements for Non-Contracted Goods and Services

RFx ProcessTotal

ContractValue

RFx ReponsesRequired

Supply ChainRisk Contract Type

Request for Proposal

$2,000,000 + 3 Any* Contract

$0 -$1,999,999 3 Higher* Contract

$250,001 -$1,999,999 3 Lower Contract

Request for Quotation $50,001 -$250,000 3 Lower Purchase Order

Request for Quotation,or written quote

$25,001 -$50,000 2 Lower Purchase Order

Request for Quotationor written quote $0 - $25,000 1 Lower Purchase Order

P-Card** $0 - $10,000 1 Lower Not Applicable

* Legal and BU Procurement Lead Review and Approval required prior to issuing RFP to ensureapplicable Terms and Conditions are used.** Per P-Card utilization requirements.


Appendix B:

Sourcing Exception Requirements for Legacy PotashCorp Operations andDepartments

To ensure the integrity of the Procurement process, all Exceptions must be approved perrequirements as summarized in Table B1 below, prior to commencing sourcing.

The following are general descriptions of exceptions considered:

Sole sourcing, where only one Supplier is available or approached for a price quote;

Emergency purchasing;

Deviating from standard procurement processes, such as soliciting fewer bidders, notproducing an Authority to Negotiate (ATN), Recommendation to Award (RTA), changingcontract Credit or Financial requirements, or contracting with a Supplier that does not meetcertain Nutrien minimum standards;

Amending or otherwise modifying Nutrien Terms and Conditions, including acceptance ofSupplier Terms and Conditions; and

Any deviation from applicable standard Company policies, procedures and processes.


Table B1: Procurement Policy Exception Approval RequirementsException Type Estimated Total Spend Approver 1 (L1) Approver 2 (L2)Sole Source Within End-user

Approval Limits forOperating and CapitalExpenditures

End-user Not Applicable

Above End-userApproval Limits forOperating and CapitalExpenditures

Next level of Authorityabove End-User, basedon Approval Limits forOperating and CapitalExpenditures

Next level of Authorityabove Approver 1,based on ApprovalLimits for Operating andCapital Expenditures

EmergencyRequirement

Within End-userApproval Limits forOperating and CapitalExpenditures

End-user Not Applicable

Above End-userApproval Limits forOperating and CapitalExpenditures, up to$25,000

Next level of Authorityabove End-User, up toApproval Limits forOperating and CapitalExpenditures

Not Applicable

Greater than $25,000up to $250,000

Site General Managerup to Approval Limitsfor Operating andCapital Expenditures

Not Applicable

Greater than $250,000 Site General Managerup to Approval Limitsfor Operating andCapital Expenditures

Next level of Authorityabove Approver 1,based on ApprovalLimits for Operating andCapital Expenditures

Deviationsfrom theProcurementProcess

Up to $250,000 Site Procurement Lead Nutrient ProcurementManager

Greater than $250,000 Nutrient ProcurementManager

VP, Procurement

Change ofContractingTemplate

Any Legal Department Nutrient ProcurementManager

StrategicSourcing

Procurement Policy - Home | Nutrien Policy 3/25 TABLE OF CONTENTS SECTION I – GENERAL 5 1. Purpose...

Documents

Transcript of Procurement Policy - Home | Nutrien Policy 3/25 TABLE OF CONTENTS SECTION I – GENERAL 5 1. Purpose...