Crestwood’s overall impact encompasses our entire value chain, including contractors and suppliers (“Contractors”). Our Contractors act as an extension of our team and are integral to the way we think of the sustainability of our business. As we continue to enter challenging markets and grow our business, we will pursue sustainable supply chain management as a key element of our sustainability strategy. This will mitigate risks and reduce adverse impacts across the value chain, amplifying the value we bring to our investors and customers.
Strong Contractor relationships are important to our business success. We believe in doing business with Contractors who demonstrate high standards of ethical business conduct and who share our commitment to safety, reliability and quality. Through our pre-qualification and selection processes and performance tracking systems, we ensure that our Contractors possess the attributes that are important to our company – a focus on profitability while upholding high standards of business ethics, safety and environmental performance.
Supply Chain activities are led by our Supply Chain Management (“SCM”) team. The purpose of the SCM team is to focus on leveraging supply markets and to provide efficient services to our internal customers. SCM team key responsibilities include:
- Procure materials and/or services required by internal business units that will result in best overall value;
- Manage Contractor spend to maximize cost savings opportunities across the organization;
- Understand the market and industry to enable better sourcing decisions;
Administer and manage all material and service agreements to mitigate liability;
- Reduce risk by qualifying Contractors and assessing their capabilities to ensure Company standards are met; and
- Ensure compliance with SCM Guidelines
Crestwood’s supply chain includes two distinct inputs – acquiring services and materials. We expect all Contractors to adhere to all applicable child labor, wage, labor, safety, and environmental laws, as well as comply with Crestwood’s Code, which bans discrimination and the use of forced labor, and respects worker’s freedom of association. For our service contractors, we conduct safety screenings and require that they adhere to our safety management programs and Minimum Environmental, Safety, and Regulatory (ESR) performance standards. We are resolutely committed to safety; therefore, we ensure that any Contractor we work with is equally committed. We rate different service contractors and assess performance indicators as we determine which service contractors to engage.
“The mutual success in the relationship between Mandan, Hidatsa and Arikara TERO, Crestwood and Native American business owners is built upon an honest and forthcoming dialogue, mutual support, and respect for TERO rules. We are committed to the goals of TERO and share the genuine desire to support, encourage and create opportunities for enrolled tribal members and their families. We recognize that economic opportunity, whether from employment or the option to start a business, gives people access to the long-term stability, financial independence and sense of pride that come with a meaningful and successful career. With our contractors we strive for responsible construction, reclamation and operation in all aspects of our work while taking a special interest in local communities, their health and well-being, and their culture.”
Construction Manager, Technical Services
We are committed to advancing the development of diverse supplier relationships, including women-, minority-, veteran-, and indigenous-owned businesses across the United States.
In North Dakota, we also encourage our contractors to help us meet our supplier diversity goals by identifying opportunities to subcontract with indigenous communities. We work with many women-owned businesses (WBE) as well as Native American owned businesses through the Tribal Employment Rights Office (TERO). TERO requires that all companies who conduct work on reservations give preference to qualified indigenous-owned businesses. In May 2018, we began developing a baseline for diverse supplier spend data, as outlined in the performance data table.
Native American-owned company,
Gemini Resources is a Native American owned construction, infrastructure and oilfield services company. The founder, Shilo Shumway, is an enrolled member of the Three Affiliated Tribes, comprised of the Mandan, Hidatsa and Arikara Nation on the Fort Berthold Indian Reservation in North Dakota.
Crestwood first engaged Gemini Resources in 2014 to construct the Crestwood CDP office building near Keene, ND. Since then, Gemini Resources has grown alongside Crestwood, and they share our expectations for safety and quality. Crestwood has entrusted Gemini with multiple projects, such as the acquisition of the Arrow asset, working with new construction and project managers. Gemini also expanded their services into well connect pipeline construction in 2015, since then they have completed a number of well connect pipeline construction projects and pad expansions for us. Most recently, Gemini completed the Phase 1A gas pipeline and produced water upgrade as well as the Bear Den Loop project located on the Fort Berthold Indian Reservation.
Gemini Resources currently has 50 employees across four company divisions including pipeline construction, roustabout, release clean up and remediation and right-of-way reclamation.
Our SCM team is working diligently to build out aspects of our supply chain management program that will further strengthen our ability to deliver projects on time and on budget, while addressing important environmental and social impacts. In 2019, the SCM team will continue to monitor both primary Contractor and Subcontractor safety, and they will develop a program to monitor financial risk. In addition, Contractor quarterly performance reviews will be performed for strategically sourced contracts.
Corporate Governance and Business Ethics