Procurement Procedure:

Diversity & Inclusion

January 1, 2018, v1

Procurement Procedure: Diversity & Inclusion

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TABLE OF CONTENTS

Section I - Overview ...........................................................................................................................4

1. Purpose ............................................................................................................................................. 4

2. Introduction ...................................................................................................................................... 4

3. Scope ................................................................................................................................................. 5

4. Roles and Responsibilities ................................................................................................................. 5

5. Key Definitions .................................................................................................................................. 6

Section II - Procedure .........................................................................................................................7

1. General .............................................................................................................................................. 7

2. Supplier Qualification ........................................................................................................................ 7

3. Request For Proposal (RFP) ............................................................................................................... 7

4. Local Aboriginal Content Plan ........................................................................................................... 9

5. Evaluation ....................................................................................................................................... 10

6. Contract Management .................................................................................................................... 11

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Procedure Title: Diversity & Inclusion Procurement Procedure

NAME TITLE SIGNATURE DATE

Reviewer Josh Dodd Manager, Strategic Sourcing - Potash

Authorizer Tim Herrod VP, Procurement

Effective Date: January 1, 2018

Section I - Overview

1. Purpose

The purpose of the Diversity & Inclusion (D&I) Procurement Procedure is to:

• Establish a framework within the Procurement Process for the fair consideration and inclusion of Aboriginal peoples, communities, and businesses affected by Nutrien operations;

• Guide the evaluation and management of Supplier Diversity & Inclusion commitments during the Procurement Process;

• Set a foundation for future versions of this procedure to include other D&I constituencies and jurisdictions, such as women, veteran, and minority-owned businesses;

2. Introduction

Canada’s Aboriginal people represent the youngest and fastest growing demographic in Canada. The median age of Aboriginal people in Canada is 28 years, 13 years younger than the median of 41 years of non-Aboriginal Canadians. The First People of Canada represent a young and up-and-coming workforce for Canadian companies in the public and private sector.

In the province of Saskatchewan, the population of Aboriginal, Inuit, and Métis people represents the fastest growing demographic in the province and is expected to comprise more than 30% of Saskatchewan’s population by 2045. First Nations and Métis people represent an important component of Nutrien’s workforce.

Nutrien is committed to the inclusion and investment in the potential of Aboriginal people and businesses today to support the growth of a better workforce, more vibrant communities and stronger Suppliers tomorrow.

With this vision in mind we seek to partner with Suppliers that will not only deliver exceptional value through their products and services, but will also drive positive impact through Aboriginal communities.

In summary, Nutrien strives to promote Aboriginal participation business by:

• Partnering with Suppliers whose values align with Nutrien’s;

• Increasing opportunities for Aboriginal Suppliers in the Nutrien supply chain and

amplifying benefit to their communities through the Procurement Process;

• Enhancing the ability of Aboriginal Suppliers to compete for work;

• Ensuring that fair consideration is given to all qualified Suppliers as the company

procures Goods and Services; and

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• Ensuring that all relevant Nutrien personnel and committed Suppliers are

accountable for performance relative to their Local Aboriginal Content Plan.

3. Scope

This procedure applies to the procurement of Goods and Services carried out in the province of

Saskatchewan, Canada, by Potash and Corporate Business Units on behalf of Nutrien. At this time,

it does not apply to other Business Units (BUs), sites, or jurisdictions.

Anyone involved in the procurement of Goods and Services for Potash and Corporate Business

Units in Saskatchewan are expected to follow this procedure.

4. Roles and Responsibilities

Vice President, Procurement

The Vice President, Procurement, is the custodian of this procedure and any changes must be made with their approval. In the absence of the Vice President, this responsibility rests with the next senior level of Authority, or his or her designate.

Category Manager / Initiative Owner

The Category Manager or Initiative Owner is responsible for:

• Establishing LAC requirements and expectations in the RFP process;

• Coordinating with the Coordinator, Supply Chain Diversity & Inclusion, the evaluation

of Supplier’s proposed Local Aboriginal Content plan;

• Monitoring and tracking the LAC plan once contractually committed, with the

Supplier providing supporting documentation required to verify their commitments;

and

• Reporting the contractual commitments and related values in the Procurement

Project Management (PPM) system.

Coordinator, Supply Chain Diversity & Inclusion

The Coordinator, Supply Chain Diversity & Inclusion is a liaison between internal stakeholders (i.e.: Category Manager, Initiative Owner, Site end-users, and Diversity & Inclusion department) and external stakeholders (such as Suppliers and Aboriginal organizations) for general inquiries, issues, assistance, and guidance related to Diversity & Inclusion within in the Procurement Process.

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5. Key Definitions

Aboriginal Content Index: This is a composite index that measures the inclusion of Aboriginal

businesses in the Procurement Process. It incorporates Location, Aboriginal Employment,

Aboriginal ownership, Aboriginal business and entrepreneurship, Aboriginal community

investment and Aboriginal subcontracting. It is normalized on a 0 to 100 scale, with an index of

100 being the highest achievable Aboriginal content and 0 being the lowest.

Aboriginal Community Investment: Measures the level of investment in supporting Aboriginal

communities, expressed as a percentage of Supplier’s total revenue, on a 0% to 100% scale, with

100% meaning all revenue is invested in the community and 0% meaning no community

investment.

Aboriginal Ownership: measures the level of Aboriginal business ownership with 100% being full

ownership and 0% being no Aboriginal ownership.

Aboriginal Owned: means that at least 51% of the Supplier’s legal entity is owned and controlled

by Aboriginal people.

Aboriginal Subcontractor: means an Aboriginal sub-Supplier or Subcontractor, who has vested

interest, owns and controls at minimum 51% of the business or a minimum of 51% of a joint

venture.

Direct Aboriginal Employment: is a measure of the percentage of Aboriginal hires, expressed as a ratio of Supplier’s Aboriginal payroll to its overall payroll (in Canadian Dollars) on a 0% to 100% scale. 100% meaning all employees are Aboriginals and 0% being no Aboriginal employees.

Local Aboriginal Content (LAC): within the local business or supply chain of a Supplier, a measure of Direct Aboriginal Employment, spend on Aboriginal Subcontractors, Aboriginal-targeted Community Investment, and participation or investment in New Aboriginal Business and Entrepreneurship.

Local Aboriginal Content Plan: A written document that articulates a Supplier’s plan to amplify Aboriginal Content as part of a contractual commitment to Nutrien.

Local Aboriginal Supplier: means an Aboriginal Supplier that is a Local Supplier, residing and

operating in the province of Saskatchewan (local assets and employees, holds residency, pays

taxes, holds valid provincial driver’s license, etc.).

Local Goods and Services: means all goods and/or services procured from a Supplier located

within 100 km of any Nutrien site that has a physical operating (“bricks and mortar”) presence

within Canada. Such a Supplier is referred to as a Local Supplier.

Support of New Aboriginal Business and Entrepreneurship: measures the amount Supplier

invested in support of Aboriginal businesses with respect to its total revenue. It is a reflection of

the level of commitment in supporting Aboriginal business development.

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Section II - Procedure

1. General

This procedure provides the framework to define the tasks, evaluation method, tools, reporting and contract management on Diversity & Inclusion throughout the Procurement Process. The key categories considered for Local Aboriginal Content are:

• Aboriginal Business Ownership

• Direct Aboriginal Employment

• Aboriginal Subcontracting

• Support of New Aboriginal Business and Entrepreneurship

• Aboriginal Community Investment

• Business Location

2. Supplier Qualification

Information regarding Local Aboriginal Content is required to be submitted and evaluated as a

part of the Supplier qualification and sourcing processes. Analysis of the responses provided in

each category, together with Supplier interviews to clarify responses, form the basis of the inputs

to the Aboriginal Content Index, which is then utilized in the RFP evaluation matrix.

The inputs to this index are reviewed with the Supplier on a regular basis as part of the Supplier

performance management process.

3. Request For Proposal (RFP)

As dictated by the scope of this procedure, the Category Manager or Initiative Owner responsible

for the Procurement Process is expected to include LAC requirements within the RFP package,

and evaluate accordingly.

Bid evaluations must include a minimum of 10% of the total score for Local Aboriginal Content, if

the contract is relevant for Saskatchewan. In collaboration with internal stakeholders, where

opportunity for significantly improved LAC content may be realized through the Procurement

Process, a higher threshold may be utilized.

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Corporate Social Responsibility (CSR) weighs heavily in all Nutrien strategic procurement

discussions and, in most cases CSR is considered to address Diversity & Inclusion. Engaging low-

cost Suppliers is important in a competitive marketplace, however, neglecting any segment in the

analysis of total lifecycle cost could potentially be a disadvantage to a Supplier’s competitive

position when evaluated.

Key aspects considered for evaluation of total lifecycle costs:

• Price

• Term

• Rebates

• Margin

• Price Cap

• QA/QC

• Freight

• Legal/Risk

• Innovation

• CSR

• Guaranteed Savings

• Service

Suppliers with little or no Aboriginal content should be encouraged to provide a Local Aboriginal

Content Plan in the RFP response phase. Nutrien recognizes that some Suppliers may require time

to develop and implement their own Local Aboriginal content plans.

The Procurement Process allows Suppliers appropriate time to develop a Local Aboriginal Content

Plan and set measurable goals within to meet over the life of the contract.

Nutrien’s Aboriginal Content Playbook is available to help guide Suppliers through the

development of their Local Aboriginal Content Plan. If a Supplier has any questions about this

component of the bidding process they shall reach out to the initiative lead who is responsible for

the RFP who may then direct them to the Coordinator, Supply Chain Diversity & Inclusion to have

a more in-depth discussion and/or guidance.

Among all other elements assessed by the evaluation committee is the Aboriginal content plan

submitted by the Supplier. Nutrien’s Coordinator, Supply Chain Diversity & Inclusion will work

closely with, and support, those Suppliers which are new to Nutrien’s approach to Aboriginal

engagement.

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4. Local Aboriginal Content Plan

When a Supplier chooses to include Local Aboriginal Content there is a four-step process, as

outlined below, which begins with the RFP and ends with fulfilling commitments at the end of the

contract period. It is important to note that the Aboriginal plan is an integral part of the Supplier’s

contractual obligations and failure to meet these may result in a breach of contract.

1. Express intent and present ideas for Aboriginal content

• A Suppliers RFP submission are evaluated on the Supplier’s willingness to develop a

local Aboriginal content plan as a Nutrien Supplier and the quality, depth, and

feasibility of a Supplier’s local Aboriginal content ideas as discussed during the RFP

selection process.

2. Choose opportunity areas for LAC focus and development

• The Aboriginal Content Playbook presents opportunities in different areas that a

Supplier may choose. If a Supplier does not find any area or organization in the

Playbook which suits their business model, they can consult with the Diversity &

Inclusion team to develop with alternative solutions.

3. Articulate goals, deliverables, and Key Performance Indicators (KPI)

• If awarded a contract, the Supplier will be asked to formalize their Aboriginal content

plan.

• Their plan should be articulated in a one-to two-page Aboriginal Content Plan

summary within which they formalize their LAC priorities and identify which

organization(s) they will be working with. This summary should include their plan’s

goals and measures of success, and resources needed to execute the plan.

• Supplier must ensure that the goals, deliverables and KPI’s are all achievable. We do

not want Suppliers committing to items that are not attainable.

4. Measure progress against Aboriginal Content Plan goals

• Suppliers will be regularly requested to report on Local Aboriginal Content KPI. These

should coincide with regular business reviews between the Category Manager or

Initiative owner and the Supplier.

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5. Evaluation

Aboriginal Content Evaluation Matrix

The Aboriginal Content Evaluation Matrix is a tool which allows a consistent and fair approach

when evaluating a Supplier’s Aboriginal content.

During the Procurement Process, Suppliers will be provided a Supplier Information Request for

Aboriginal Content form, which requests the following be provided:

1. General Company Information

2. Contact Information

3. Type of business and Aboriginal ownership

4. Company financial information

5. Workforce information (including permanent, temporary, and contract employees)

6. Subcontracting information

7. Support of Aboriginal businesses and entrepreneurship

8. Support of Aboriginal communities and education

The content of the form then is entered into the evaluation matrix, which is made up of the

following categories:

• Ownership – 20% weighting to overall Aboriginal Content Evaluation – Level of

Aboriginal ownership structure (majority, minority, none)

• Direct Aboriginal Hires – 20% weighting to overall Aboriginal Content Evaluation –

percentage of company compensation apportioned to Aboriginal employees

• Community Investment – 20% weighting to overall Aboriginal Content Evaluation –

percentage of total revenue invested to support Aboriginal community

• Aboriginal Subcontracting – 20% weighting to overall Aboriginal Content Evaluation

– percentage of subcontracts awarded to Aboriginal business

• New Aboriginal Business & Entrepreneurship – 10% weighting to overall Aboriginal

Content Evaluation – percentage of revenue directed to promoting Aboriginal

business and entrepreneurship

• Business Location – 10% weighting to overall Aboriginal Content Evaluation –

location of business “bricks and mortar” in relation to Saskatchewan to account for

those Suppliers within 100 km or less of any Nutrien operating site in Saskatchewan

The value obtained is further modified by the introduction of a factor to account for Aboriginal

Content from the province of Saskatchewan. The resulting final score is converted to an index

between 0 and 100 and assigned to the Supplier.

This index is then used in the calculation of the minimum 10% score for the Diversity & Inclusion

component of the overall RFP evaluation.

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6. Contract Management

A Category Manager or Initiative Owner who executes a contract containing an Aboriginal Content

Plan is responsible to schedule regular spot checks and business reviews with the Supplier to

ensure the plan is being implemented as agreed and that the Aboriginal content commitments

stated in the contract are being fulfilled.

Aboriginal content plans are new to some Suppliers and their priorities may change from year to

year. It is the responsibility of the initiative lead to document and record any new or altered goals

and/or KPI’s and amend the Aboriginal content plan with any changes to ensure the revised

commitments are being fulfilled in the years following the changes.