LOCAL PROCUREMENT AT
ANGLO AMERICAN
Our vision is sustainable, responsible local
procurement that positively contributes to a
resilient supply chain and the economic and
social development of the communities in which
we operate.
“A responsible supply chain and a commitment
to development are areas in which the business
community has the power to make a real difference
in eliminating poverty.”
Cynthia Carroll
Chief Executive of Anglo American Plc,
Sept 21 2010.
Introduction
Over the past few years, Anglo
American has changed the way that
we do business. We have looked hard
at what we stand for and we have
articulated the core values of our
company. Linked to our core values
is a commitment to building durable
relationships with the communities
where we operate, and enhancing
the opportunities available to, and
capacities of, those communities.
As a global leading mining company,
Anglo American is very mindful that
our business has the potential for
significant positive and negative
impacts on the lives of those living
near our operations - and we have a
commitment and a responsibility to
ensure that the impact is a positive
one.
Definitions
Local procurement refers to the purchasing of goods or services from a
local supplier. Local includes host communities, indigenous and previously
disadvantaged communities, as well as at provincial, national and regional levels
where appropriate.
Amazonas
Pará
Maranhão
Piaui
Bahia
Mato Grosso
Goiás
x
Minas Gerais
Mato Grosso
du Sol
São Paulo
Paraná
Ceará
NATIONAL SUPPLIER
Anglo American operations utilise
goods/services from a supplier
registered or based within the same
country as the operation.
PROVINCIAL SUPPLIER
Anglo American operations utilise
goods/services from a supplier
registered or based within the
same province/region/ state/
territory area as the operation.
LOCALISED SUPPLIER
Anglo American operations utilise
goods/services from a supplier
registered or based within the same
immediate area as the operation.
Why a Focus on Local
Procurement?
Local procurement has the capacity for
positive impact through job creation,
skills development, investment in
local infrastructure, and the overall
establishment of thriving and healthy
host communities.
Local procurement is not only the
‘right thing to do’; it is of significant
strategic importance to the business.
Establishing and maintaining enduring
partnerships with local suppliers can
build supply chain value and strengthen
our social licence to operate. This
benefits Anglo American and our supply
chain partners.
Developing and supporting suppliers
located close to our mines, and bringing
existing suppliers closer to our sites
can also lead to cost efficiencies:
reduced delivery times and logistics
costs, localised warehousing for just in
time procurement. Through training and
supporting our local small and medium
suppliers, we can also ensure enhanced
service, quality control, and an operating
ethos that is aligned with our own.
Ultimately, a prosperous community
is positive for everyone. If Anglo
American is to be truly sustainable, local
procurement must form a cornerstone
of our supply chain strategy.
Our Approach
While the importance of local
procurement is increasingly being
recognised by global mining companies,
the practice of actually doing it can be
challenging. We are developing practical
ways to overcome these barriers.
We are ensuring that a commitment
to optimising local procurement is
integrated throughout supply chain
decision making across Anglo
American. Underpinning our approach
to local procurement are four
fundamental principles: Multi-faceted;
Inclusive; Sound Governance; and
Working in Partnership.
Multi-faceted: Our entire supply chain
offers potential opportunities for local
procurement: from the exploration
stage through to post-closure;
www.angloamerican.com
operational and capital expenditure;
goods and services; small, medium,
large and multinational suppliers and
contractors; and in all our areas of
operation.
Inclusive: We pursue development
outcomes through local procurement
at multiple levels, including host
communities, indigenous and
previously disadvantaged communities,
as well as at provincial, national and
regional levels.
Sound Governance: Sound business
principles and good governance will
underlie all transactions. There will be
no compromise on quality, delivery,
service, safety, health and environment,
or any other technical requirements.
The relevant Anglo American policies
and procedures will apply.
Working in Partnership: Creating
an enabling environment for local
procurement requires collaborative
ways of working; across functions
within Anglo American, with our major
suppliers, and with communities,
governments and development
institutions.
Our policy and related strategies
for local procurement represent
significant steps in our journey
towards consistent local procurement
practices globally. We require that the
way we contract for business does
not disadvantage the entrepreneurs
and local businesses that we want
to support. For example, we are
examining the unbundling of work
packages, our payment terms and
other administrative issues to see
if any of our standard procurement
processes inadvertently make it harder
for local businesses to trade with
us. Where this is the case, we are
designing interventions to unblock
some of these obstacles. We want to
streamline the process for contracting
with local businesses as far as we can.
Working with Our Suppliers
Our ability to successfully meet our
local procurement commitments and
responsibilities will require that our
suppliers join us on this journey to
optimising local procurement.
Our suppliers can play a pivotal
role by partnering with us to create
an enabling environment for local
procurement.
Our approach to such partnerships will
be facilitated by our local procurement
framework, policy, our key principles
and our local procurement strategies,
all of which are designed to optimise
opportunities to integrate local
businesses into our global supply chain.
We look forward to continuing this
journey with our suppliers to further
refine our approach and contribute
to sustainable, responsible local
procurement.
Local Contexts in a Global
Supply Chain
Related to our internal policies are the
external expectations, regulations and
requirements from stakeholders at local
and international levels.
• In South Africa, for example, the Mining
Charter and the Social and Labour
Plans developed under the Minerals and
Petroleum Resources Development Act
(MPRDA) stipulates clear local content
requirements that all mining companies
operating in South Africa are legally
bound to comply with.
• In Peru we have formal agreements
with some local communities to give
them preference with respect to
procurement opportunities.
• In Australia there is a call to commit
to contributing to the sustainable
economic growth of the communities
in which we operate and ensure that
local communities provide a vibrant
lifestyle to attract and retain talent to
our business.
Our principles of good governance and
working in partnership, underpin our
stance to comply with social legislation
and other external principles and
standards to which we subscribe. This will
help us develop a culture of knowledge
sharing and continuous improvement.
For further information please
contact:
SUPPLY CHAIN SUSTAINABLE
DEVELOPMENT
Anglo American Supply Chain
PO Box 61587
Marshalltown 2107
South Africa
Tel: +27 (0) 11 638 9111
[email protected]