In 2011, Anglo American spent more than $13.8 billion with suppliers. We believe that each dollar spent should be an investment in promoting responsible business practice amongst our suppliers. Promoting a sustainable supply chain also has a mutually beneficial impact on broader society.
Our commitment to encouraging our suppliers to act in a safe, sustainable and responsible manner is given effect through our policy on sustainable development in the Anglo American supply chain and our Supplier Sustainable Development Code. Available in all our main operational and supplier languages, the code provides detailed guidance on our expectations of suppliers in relation to safety, health, labour rights, business ethics, environmental management, human rights and community relations. The policy and code, which govern our procurement decisions, include standards that are mandatory conditions of contract, as well as standards that are strongly encouraged. In fulfilment of our policy, high-risk suppliers are required to submit a self-assessment questionnaire based on the code. We also conduct site visits and audits of certain suppliers to verify compliance with the code.
On the basis of these audit findings, suppliers may be required to develop and implement improvement plans to address areas of non-compliance. Since 2009, 109 suppliers have been independently audited against our code. To date, 30 improvement plans have been agreed. We track our suppliers’ progress against these improvement plans and, where necessary, provide assistance to enable them to become compliant.
We have also integrated these requirements into our award-winning procurement systems, addressing issues such as sourcing, contract management, spend analysis and supplier performance. This enables us to give preferential treatment to suppliers that share our commitment, and allows a tailored approach for certain groups of suppliers such as those involved in transportation and construction.
Through these supplier engagements we have seen improvements in employee working hours and remuneration, enhanced safety measures, more effective management of environmental risks and valuable improvements in energy and water efficiencies. We have generally been encouraged by the transparency, cooperation and willingness of our suppliers to implement the identified improvement plans.
During 2012, we will continue to roll out our supplier management process, undertake audits of identified suppliers and encourage full implementation of agreed improvement plans. A particular focus area will be on encouraging improved social responsibility performance in our contractors.