To sustain long-term value creation for all stakeholders as envisaged by our Values and sustainability principles, it is important to align ourselves with a robust supply chain, responsible leading principals and Original Equipment Manufacturers (OEMs).
Mutual respect, trust, support and benefit, guided by our governance and ethical frameworks, underpin our relationships throughout our supply-chain. The group has developed a set of conduct criteria and standards for suppliers which form part of a supplier due diligence initiative. Where non-conforming suppliers are identified, appropriate action is taken according to the circumstances.
Integral to our value chain is our commitment to being a leader in sustainable development and identifying competitive advantages through solutions that help customers achieve their sustainability objectives, facilitate a transition to lower carbon economies and expand into related opportunities.
A key socio-economic driver, within the South African context, is integrating previously disadvantaged groups into the economy. Aside from our OEMs, we support and empower a range of small and medium-sized suppliers, contractors and enterprises in our supply chain, through our South African-oriented enterprise development initiatives and preferential procurement programme. We are committed to the localisation and empowerment of our supply chain where practicable, and have completed a number of supplier development interventions engagements in South Africa over the year. In this regard over 600 suppliers have been engaged and introduced to our mandate and procurement thrust towards transformation and black economic empowerment.
Barloworld represents leading international OEMs and brands such as Caterpillar, Hyster, Avis, Audi, BMW, Ford, General Motors, Jaguar Land Rover, Mazda, Mercedes-Benz, Toyota, Volkswagen, Massey Ferguson, Challenger and others. The group is therefore part of supply chains that reflect international best practice in the manufacture, sale, service, support and disposal of products. These standards are complemented by Barloworld’s own ethics1, values2 and standards. We are committed to working with suppliers to ensure our customers’ objectives are met and their competitive position enhanced. A number of our principals have been included on various environmental and/or sustainability related indices, further supporting their reputation as responsible leading companies.
Mindful of our responsibilities in our value chain and a number of initiatives have been implemented to assess and limit any potential risks emanating through our supply chain. We have assessed our principals that account for the majority (some 70%) of our procurement spend, for environmental, labour, human rights, bribery and corruption, and corporate citizenship. Save for the area of concern reflected below, the remainder have been assessed as low risk rating.
We are aware of the well-publicised Volkswagen and Audi emission issues affecting customers internationally. We recognise the associated risks and are engaging with our principal. The Volkswagen and Audi vehicles sold by us in our dealership territories meet local emissions compliance standards, and our operations have consequently not been directly impacted. We regret any anxiety or uncertainty our customers, or any other stakeholders, may have experienced because of this matter.
Third party service providers and suppliers (TPSP&S) in all business divisions have been subjected to a risk assessment and due-diligence process in relation to bribery and corruption. This due diligence process involves the integration a more rigorous screening of TPSP&S into the existing procurement processes and setting clearly defined minimum requirements. This process is now applied to new TPSP&S and is ongoing for existing TPSP&S, in accordance with the Barloworld due diligence policy.
To date some 16 500 suppliers are being covered by such assessment. As part of this process, some 3 330 suppliers have signed the Barloworld Supplier Code of Conduct which includes, among other things, the following voluntary undertaking from suppliers:
“The supplier understands that it has responsibility for its own supply chain and for managing standards of conduct within its supply chain. It therefore agrees to encourage and promote high ethical standards and adherence to international best practices in human rights, health, safety and environmental standards when undertaking its contractual obligations towards Barloworld.”