Shell shows support for local vendors

15 April 2011

15 April | Lindsay Clark

Oil firm Shell has targeted 90 per cent of its procurement spend in poorer countries at local suppliers.

The firm’s corporatesocial responsibility report said it spent more than $13 billion (£7.9 billion) on goods and services during 2010 in countries where the GDP was less than $15,000 (£9,170) a year per person. Nine in every ten dollars of the procurement spend in these countries went to local suppliers in 2010, the company reported.

“We also increased our sourcing of goods and services in China, India and Russia where we have teams in place to assess potential suppliers,” the report said. “Our major contracts include requirements to follow the Shell general business principles, code of conduct and health safety security environment standards.”

The oil company also said it had implemented improved requirements on anti-bribery and corruption across the organisation in 2010, including strengthening the due diligence toward suppliers, contractors and government intermediaries.

In China, India and Taiwan, Shell conducted 34 independent assessments of suppliers during 2010 to verify their compliance in areas such as human rights, labour practices and business integrity.

The supply of biofuels has become a sensitive issue, because of concerns that their production can damage natural habitats.

Shell said 83 per cent of the volume of biofuels its purchased in 2010 was from suppliers signed up to contract clauses ensuring they did not cultivate, produce or manufacture biofuels in areas rich in biodiversity. “Suppliers must be able to trace supply chains, and they must belong to relevant international bodies promoting sustainable biomass production,” the report said.

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