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JOINT DEVELOPMENT AND WORK

We carry out a major part of our acti- vity in Spain and therefore 54% of our suppliers, representing 49% of the ex- penditure managed by the Purchasing department, are Spanish. In the areas where our activities are located (Gi- braltar San Roque Refinery, La Rábida Refinery and Tenerife Refinery) we have strengthened relations with lo- cal suppliers in order to contribute to the development of the areas in which we operate, who represent the 53% of contracted services.

We have extended this commitment to all countries where we operate, with the challenge of developing specific

plans to encourage contracting with local suppliers in each geographical area.

Colombia has led this commitment, launching a specific programme for strengthening local suppliers. To date, a survey of companies in the area has been conducted to determine their degree of maturity and capacity to su- pply goods and services. Supply lines and services that could be contracted locally have been identified and the methodology for extending this pro- cess to other locations as from 2016 has been established.

During 2015 we have identified, deve- loped and formalised strategic allian- ces with suppliers to add value to our Company through agreements that improve our capacity for innovation and contribute to achieving greater e- fficiency in the supply of goods and/or

services, by encouraging leveraging of cross-business opportunities.

We are also working on developing strategic relationships with other IPIC companies in order to identify syner- gies and carry out joint initiatives.

DEVELOPMENT OF STRATEGIC ALLIANCES

Suppliers % Suppliers % Expense SEG. I 62 1.03% 59.42%

SEG. II 238 3.94% 23.51%

SEG. III 351 5.81% 8.85%

SEG.IV 5,393 89.23% 8.22%

92% EXPENSE

During 2015 we have conducted 860 performance evaluations on 441 su- ppliers in all areas of specialisation, of which 63% belong to suppliers in the principal segments (I, II and III),

emphasising questions of quality and implementation, safety, environmental performance, innovative capacity and ethical behaviour.

ANNUAL AND CORPORATE RESPONSIBILITY REPORT 2015