DALOs Due Diligence process ensures that we exercise due care in our operations in relation to labor clauses, CSR requirements and international sanctions
In DALO, Due diligence is about identifying CSR risks that may be associated with an acquisition to address possible negative impacts on people and planet in a timely manner.
As part of the Danish Government, we have a duty to safeguard against third-party human rights violations in accordance with the UN's guiding principles on human rights and business. In addition, The Danish Armed Forces contributes in the promotion of peace and security and protects the values on which the Danish society is based. This means that we need to be aware of current risks, but also continuously work to identify the potential risks associated with our procurements. In order for us to fulfill this task, we have integrated due diligence into our procurement process.
DALOs Due Diligence procedure covers four different stages in the procurement process, from the initial market research to ongoing follow-up measures with suppliers:
At the beginning of the tender process, when DALO engages in dialogue with the market, we simultaneously produce a CSR market analysis. The purpose of the analysis is to designate an indicative CSR risk profile for the tender in question. The CSR market analysis is based on the tender's object/service, industry and potential supplier/production countries. Thus, the result of the CSR market analysis is an indicative risk profile that describes which CSR follow-up measure is to be expected and will be available in the tender documents.
It is important to notice, that the result of the CSR market analysis is only indicative and may be changed once the supplier is known.
Supplier Analysis 1:
All potential suppliers are required to hand in a signed CSR self-declaration in order to be considered for an agreement with DALO. In the declaration, the potential suppliers declare to comply with our requirements regarding labor clause, CSR requirements and international sanctions. At this point, we screen the possible suppliers whether they are subject to international sanctions.
In the event that a supplier does not declare that it will comply with our requirements and/or the supplier is subject to international sanctions, we inform the supplier that they are excluded from the procurement process.
Supplier Analysis 2:
When an agreement is entered between a supplier and DALO, we carry out a thorough analysis of the supplier. The analysis includes a more in-depth evaluation based on the supplier, its sub-suppliers and the object/performance of the agreement. The analysis includes conditions in the specific industry and countries of production.
No later than one month after signing the contract, the supplier must complete and submit a self-evaluation.
Supplier analysis 2 is compared with the supplier's self-evaluation, and the result is used as a basis for deciding which CSR follow-up measure will be required. The CSR model's follow-up measures are thus scalable based on the risk analyses carried out by us.
DALO has three different risk profiles; A, B and C – where C is low risk, B is medium risk and A is high risk. This allows us to focus our CSR efforts at procurements deemed to have high levels of CSR related risks.
Based on the supplier's annual self-evaluation, the ongoing communication and any site inspections/audit, DALO continuously assess the risk profile. The risk profile can remain unchanged or scaled up or down.
Regardless of the assigned risk profile, all suppliers must regularly submit a self-assessment. This happens once a year or every two years, depending on the follow-up measure determined by the assigned risk profile. The aim is to ensure, that the supplier continuously upholds CSR requirements. At the same time, it enables DALO to effectively communicate our requirements and expectations in relation to CSR to the suppliers.
DALO may also perform site inspections, and site inspection + CSR audits respectively, in cases where the supplier has been granted a medium or high risk profile (B or A). As before mentioned, this allows us to focus our CSR efforts at procurements deemed to have high levels of CSR related risks.
Based on the supplier's self-evaluation, the ongoing communication and any site inspections/audits, a regularly reassessment of the risk profile is made. The risk profile can thus remain unchanged or be scaled up or down, as deemed appropriate by DALO.