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Conflict minerals reporting guidance published


SupplyManagement

October 1, 2013 | Helen Gilbert

The guidance, compiled by the Responsible Sourcing Network and Enough Project, has been produced ahead of the 31 May 2014 deadline that requires companies who source minerals from the Democratic Republic of Congo to submit their first conflict minerals disclosures to the US Securities and Exchange Commission (SEC).

Policies should articulate a commitment to ensuring sourcing practices do not support conflict, human rights abuses including forced labour, mass atrocities and crimes against humanity, the Expectations for Companies’ Conflict Minerals Reporting guidance stated.

It detailed how firms should commit to exercising supply chain due diligence and consider the implementation of a supply chain transparency system that allows for the identification of the smelters and/or refiners in its minerals supply chain.

The metals tin, tantalum, tungsten and gold – also known as 3TG – should only be sourced from conflict-free covered countries, while companies should only use 3TG minerals from smelters that have been audited and verified as conflict free by a credible programme such as the Conflict-Free Sourcing Initiative, the document states.

Other recommendations include developing a conflict minerals programme that incorporates a description of the steps that will be taken to identify, assess, mitigate and respond to risks.

At a minimum steps should include supply chain surveys, supplier training, supplier and smelter encouragement, and an obligation to participate in the Conflict Free Smelter programme or equivalent, provided such industry schemes adhere to international standards, audits and unannounced spot checks, the report stipulated.

Darren Fenwick, senior government affairs manager at the Enough Project and report co-author said advocates for a clean minerals trade were keen to understand how companies, who are connected to the Congo through mineral sourcing, are addressing their connection to the conflict that has resulted in millions of deaths.

“Companies whose reports show compliance benefit from positive public sentiment and increased brand recognition,” he said.

Fellow co-author Patricia Jurewicz, Responsible Sourcing Network director added: “Investors would like to see their companies establish baselines the first year and specify the steps they are taking so we can then measure improvements in transparency and accountability reporting over time. Our paper provides a set of specific indicators that can be tracked to allow for comparability between annual reports.”

 

Rwanda: 300 Awarded Certificates in Procurement Courses


AllAfrica.com

By Sarah Kwihangana

September 28, 2012

The School of Finance and Banking (SFB) has awarded certificates to over 300 students who have completed training in professional procurement courses.

The 2nd certificate awarding ceremony was held yesterday in Kigali under the theme “Twinning arrangement to develop capacity in procurement for Rwanda.”

The director general, Rwanda Public Procurement Authority (RPPA), Augustus Seminega said that training in professional short courses in procurement is in line with government’s plan to ensure good public procurement practices through skilled manpower.

“Initially, we had no institution offering such courses. I am happy that now our procurement officers can undertake such trainings here in Rwanda and, in turn, our employees acquire more skills,” Seminega said, adding that he was optimistic that the graduands will contribute to good practices to public procurement.

He called on the students to implement what they had learnt and also encourage their colleagues in the same field to pursue such professional courses. He further called for more people to take on these courses since there is still a wide skills gap especially in public institutions.

SFB acting rector Papias Musafiri Malimba underlined the need to create a critical capacity building in the field of procurement as it still lacks skilled professionals.

He appealed to employers to facilitate their employees to acquire such skills and called on the graduates to study all the seven modules of the professional procurement courses.

Jean Pierre Munyabugingo, a procurement consultant and one of the graduates who was also awarded a certificate of trainer, said he had acquired a lot of knowledge in the four courses he had studied under the program.

“I did a course in training of trainers, procurement for good, works and services. These courses are very practical and the knowledge I acquired is going to help me perfect my work. As a trainer I will definitely assist people and organisations where there is a need.”

Peace Asiimwe, an accountant with RPPA, received a certificate in project management and procurement planning. She says it was additional knowledge as an accountant.

“This course has broadened my understanding of procurement practices and processes. I have learnt about the laws and regulations, the process of getting a tender among other things which I intend to put in practice.” Asiimwe said.

Various students received certificates in different fields of; project management and planning, procurement for goods, works, services, audit, and logistics, advanced contract management, and of these seven were awarded certificates for training of trainers.

A law is in the pipeline to put in place an institution in charge of accrediting procurement officers in the country in a bid to enhance professionalism.

Does the procurement profession in Africa have the right profile to capitalise on the region’s economic growth?


SupplyManagement

8 August 2013 | Andrew Allen

Sub-saharan Africa has become one of the world’s great economic success stories. It is the second-fastest growing region in the world after Asia and, according to the International Monetary Fund, it will see growth of more than 5 per cent this year, compared with 3 per cent worldwide.

But is procurement missing the party? Academic Douglas Boateng indicates this may be the case when in a recent presentation he described the function as undervalued and under-rewarded across the region.

Professor Boateng, of UNISA Graduate School of Business Leadership in South Africa and CEO of consultancy PanAvest International, says government and industry increasingly accept the need to bring procurement into the strategic decision-making chamber. But, he adds: “The pontifications have unfortunately not really been matched by real corrective structural adjustments.”

In his view, procurement professionals receive less recognition as well as worse remuneration than counterparts in other business functions. These factors make it hard to attract talent. Lower pay also raises the risk individuals will act unethically.

The solution? Boateng calls on industry leaders and government policy makers to take “decisive steps” to “ensure respectable recognition for the ethically and performance-driven procurement and supply chain management professional”.

The remarks will strike a familiar chord for many procurement professionals in Africa. Chabeli Ramakatane, CEO of Bareki Consulting, South Africa, tells SM: “There is progress, however, it is not at the pace we expect. The highest-paid procurement person here is poorly remunerated compared to the highest-paid finance or marketing person.

“There is definitely a leadership vacuum. Even where you find capable leaders they might not be empowered to do what is necessary.”

At the heart of the problem is organisations’ reluctance to appoint a CPO who reports directly to the CEO and who has a strategic remit. Instead procurement tends to be located further down in the structural hierarchy led by a purchasing manager. “Fewer than 20 per cent of companies or large public sector organisations have CPOs,” says Ramakatane.

Naomi Kinyanjui, civil projects operations manager at Ardan Risk and Support, Kenya, agrees the function has typically been pigeonholed as a back office transactional role. “With regards to it being under-rewarded, that has been true to a large extent,” she says. But she believes that private sector organisations are increasingly beginning to pay their purchasing staff a fair market rate as they realise procurement can add value to their businesses.

Phillip Dahwa, managing partner, The Global Procurement And Supply Chain Management Practice, Zimbabwe, believes that if procurement is undervalued, this is precisely because the function has not yet earned its stripes. “The calibre of most procurement professionals is questionable in most instances,” he says.

While the professionals have technical skills they tend to lack business acumen, softer skills and leadership competencies. This, in turn, has denied them the chance to shine at the highest levels of their organisations, he believes. “The challenge is now for the professionals themselves to prove that they can add value rather than just purporting to be undervalued,” he says.

Skills shortages pose a problem for procurement everywhere, but Tom Woodham, director of Crimson & Co consulting, which works with many multinational clients in Africa, believes the talent pool in Africa is particularly small. Not only are there fewer business graduates in the region but procurement, like most business functions, is lagging behind many other regions in maturity “by about 20 years”. Nevertheless, Woodham does not consider buyers – at least in many of the larger multinationals – to be more poorly paid than colleagues in other business functions. In Africa the lack of prestige attached to procurement rather than lack of pay is the most serious obstacle to attracting the best talent, he believes.

“FMCGs and multinationals really struggle to find people to bring in both in terms of previous experience and of people with an interest in procurement.

“These companies spend an awful lot of money training people and they find they have to start from a lower base than they would in Europe or elsewhere,” he says.

Ulrike Kussing, at PwC in South Africa, believes companies are increasingly seeing the value in supply chain management. “Now there is more of a focus on looking at things end to end. The stance has shifted from the past where it was viewed more as a logistics function,” she says.

Nevertheless Kussing says that while supply chain managers can rely on modern technology and increasingly good infrastructure, problems such as facilitation fees and unreliable delivery times present a major challenge for supply chain professionals.

She is not alone in seeing significant grounds for optimism in the region.

Woodham says: “A lot of multinationals out there are changing their focus. Previously they would have brought in expats to fill vacancies. Now they are training and developing local people.”

For Ramakatane there is one factor that will guarantee procurement’s rise up the corporate ladder in Africa – that organisations will sooner or later come to realise the significant cost savings that can be achieved by implementing a strategic sourcing model.

“We expect organisations in both private and public sector to realise that the only place left to achieve savings or to improve the bottom line is in procurement,” he says.

Does low pay cause corruption?

“Most procurement professionals are not bold enough to stand up against fraud and corruption,” says Phillip Dahwa. “They facilitate corruption in an attempt to win the hearts of their bosses.”

It is a controversial viewpoint but one that African procurement professionals will understand.

Chabeli Ramakatane says the lack of visible punishment for buyers caught accepting bribes is a major incentive for fraudsters. He believes low pay bears some responsibility for the prevalence of bribery, as well as unmanaged conflicts of interest, inadequate screening of suppliers and just plain greed.

Naomi Kinyanjui says it is inevitable that low pay leads to increased temptation to engage in corruption.

However for Ian McNally, vice president of Efficio, it is not always clear where cases of ‘supplier loyalty’ within companies are due to corruption or rather “loyalty to a supply base that has delivered service and where the relationships are strong and long lived”.

“What we have seen is that in most cases, a clear, open, transparent, fact-based approach works with stakeholders in the same way as it works in a European or North American context,” he says.

Buyers must take responsibility for change


SupplyManagement

11 July 2013 | Adam Leach

The halls of Ghana’s National Theatre reverberated with a symphony of supply chain chatter at the CIPS Pan-Africa Conference. Procurement professionals from across Africa filled the grand structure to gain insights from leading lights of the profession. Over the two days, topics from countering corruption, transforming the function into a strategic asset and the growing importance of transparency were discussed. But between each issue, there emerged a common thread: the importance of the buyer as an individual.

The procurement profession in Africa faces a great many challenges. Public money being diverted to unwanted destinations remains rife and there is an ever-growing need to increase the value accrued through its plentiful supply of natural resources. The collective power and determination that was evidently infused in the delegates present served to show that things are going in the right direction. But as almost every speaker highlighted, the continued development of the function lies on the shoulders of individuals.

Edward Siwela, director of the Institute of Directors Zimbabwe, set an inspirational tone in his presentation, highlighting the potential for procurement to deliver at the highest level of business value. “There is no doubt that there is a major contribution that procurement can make to the overall strategy of a business.”

But in order for this to be realised, he admitted, the profession will need to make sure that those in power take notice. “If procurement is to play a key role, the board must take a keen interest in it.” Turning to the skillset demanded of modern procurement professionals, Siwela picked out risk management and IT competency as being of increasing importance. He also identified an ability to “handle difficult situations” as key in aiding the fight against corruption, which, if successful, could create significant value. “When [corruption and brown envelopes] disappear it can only mean one thing… value creation,” he said.

General manager SAP at Nigerian National Petroleum, Bola Afolabi also turned his attention to the issue of corruption, conceding to the audience of buyers that they would inevitably come up against people trying to gain an improper edge or benefit. He told them to be aware that if they succeed in getting into a powerful position, some, even close family and friends, might be thinking “what’s in this for me?”. Offering simple advice, he said: “You need to have that thick skin and be the best that you can be.”

With regard to corruption and other issues of risk, such as the detrimental effect on the local supply chain caused by going for a low cost but foreign supplier, the former CIPS president advocated that buyers be relentless in their search for potential issues: “Question yourself. Ask: ‘What is the risk in the role that I play? Look for the risk element in every level of the supply chain.” Outlining risks that commonly arise, particularly Africa, he pointed to incessant changes within government, a lack of keeping to payment terms and a failure to address potential conflicts of interest.

In one of the standout presentations of the conference, delegates were treated to the insights of a purchaser who has scaled all the way to the top of the corporate ladder. Babs Omotowa, who is now managing director of Nigeria LNG, told those looking to follow in his footsteps that success would only follow hard work. Boosting the strategic value of the function, he proposed, would only come if the profession took proactive action. “Procurement is yet to take its place as a strategic function. Buyers need to ask themselves whether they are spending more time on transactional or strategic activity.” If the measurement indicates a balance in favour of transactional work, it is encumbent on buyers to shift it towards the strategic side, he said.

In a further call for buyers to bring themselves closer to the centre of overall operations, Omotowa highlighted the need for them to develop a broader understanding of the ecosystem in which they sit. He urged them to “go beyond” the confines of procurement and factor in big issues such as societal and global matters into their own objectives. This, he proposed, would help overcome negative perceptions of the function from other parts of the business: “If you’re only concerned with procurement, no wonder other parts of the business don’t listen to you,” he said. In particular, he suggested that buyers swot up on politics, science and the global economy to enrich their perspective.

Tett Affotey-Walters, director of the Ghana procurement civil service, also cautioned against buyers becoming too focused on their individual goals and objectives rather than the overarching aims of their organisation. “It is not good enough for us as procurement professionals to only be reading procurement books,” he said. Ghana’s public sector chief also suggested that buyers earning the taxpayer pound, had suffered as a result of not having clearly defined career trajectories, when compared with other support functions such as finance or human resources. “In the Ghana Civil Service, there is no classification for procurement per se,” he said.

Tukiya Kankasa-Mabula, deputy governor of administration at the Bank of Zambia, used her time in the spotlight to impress upon buyers the pivotal role they can play in shaping the region’s economic development. She conceded that, currently, the reputation of the profession is not where many would like it to be. She said that procurement suffered as a result of being tagged as focusing too heavily on lowest cost. To remedy this, she urged audience members to work to a broader definition of value, factoring in the economic benefits afforded through local sourcing and boosting SME into purchasing decisions.

Taken together, the various traits, skills and competencies required in the modern African buyer, constitute a significant challenge. They must shake away the often unfairly attributed perception that they are concerned only with cost, by substantiating the value they have delivered in areas far harder to measure. Calculating contributions to local economies as robustly as a contracting saving is not easy work. They must also combine their more strategic understanding of how their own work impacts their organisation’s goals, with a clearer appreciation of what other teams are doing in order to improve stakeholder relations, a trick few in the profession have mastered.

Throw in the thick skin required to counter corruption and the booksmarts required to build currency with the board and it all adds up to a tall order. But if the energy and ambition that was apparent across the two days in Accra can be replicated in offices across the continent, there’s a strong chance it will be achieved.

– See more at: http://www.supplymanagement.com/analysis/features/2013/individual-action/#sthash.SmvxwpTT.dpuf

Pan-African procurement and supply conference to be held in Accra


Ghana News – SpyGhana.com

By Ekow Quandzie

Ghana will host the first-ever Pan African Conference and Exhibition on procurement and supply from May 21-23, 2013 in the capital, Accra.

The event will be organised by the Chartered Institute of Purchasing & Supply (CIPS), the world’ largest independent professional body representing the procurement and supply profession.

Themed “The strategic role of professional procurement in the development of Africa”, the event is expected to bring together corporate executives, financial controllers and directors, public sector decision makers as well as supply chain, logistics and procurement practitioners from all sectors of African economies

The region wide multi-sectorial conference is expected to give the continent’s public and private sector executives and decision makers an opportunity to gain insights into professional procurement and its strategic link to long term economic development.

AAR Promotes Technical Procurement, Supply Chain Management at MRO Africa


Aviationpros.com

February 27, 2013

WOOD DALE, Illinois, February 27, 2013 – In a further sign of its commitment to doing business in Africa, a senior executive from global aerospace leader AAR’s (NYSE: AIR) Middle East, Africa and India Operations will participate in a panel focused on technical procurement and supply chain management at the 22nd annual MRO Africa Conference and Exhibition in Addis Ababa, Ethiopia.

On Wednesday, Rahul Shah, Senior Vice President and Managing Director, Middle East, Africa and India Operations, will join the discussion, “Optimizing Technical Procurement and Supply Chain Management,” along with representatives from Kenya Airlines, South African Airways and Air Namibia.

This year, the conference, sponsored by Ethiopian Airlines, is focused on establishing centers of excellence and standardizing aircraft maintenance, repair and overhaul (MRO) capabilities for airline fleets across the African continent. The forum, which opened on Monday, also aims to promote closer technical cooperation between African airlines, as well as develop relationships with aircraft and engine manufacturers, industry suppliers and aviation service and technology firms, such as AAR.

“There are exciting advancements taking place in several African airlines that are poised for complete transformation in the very near term,” Shah said. “As these airlines continue to modernize and add more sophisticated aircraft to their fleets, AAR has the expertise to provide maintenance, repair and supply chain services directly to the airlines and the African aviation industries.”

The annual African aviation conferences are attended by senior government and regulatory bodies, airline and aviation officials; financial institutions; aircraft and engine leasing companies; MRO providers; and other key stakeholders worldwide.

On February 22, AAR Vice President of Government Affairs and Corporate Development Cheryle Jackson joined key government, business and international trade leaders in Washington, D.C., for the “Doing Business in Africa” forum sponsored by the White House Business Council. Jackson was a leader of the breakout session, “How to Get Started in Sub-Saharan Africa.”

About AAR

AAR is a global aerospace and defense contractor that employs more than 6,000 people in 17 countries. Based in Wood Dale, Illinois, AAR supports commercial, government and defense customers through two operating segments: Aviation Services and Technology Products. AAR’s services include inventory management and parts distribution; aircraft maintenance, repair and overhaul; and expeditionary airlift.  AAR’s products include cargo systems and containers; mobility systems and shelters; advanced aerostructures; and command and control systems.  More information can be found atwww.aarcorp.com.

Supply Chain Management – turning professional?


The Guardian

The trend for professionalising supply chain management in the private sector is slowly reaching the public sector in Africa but still rarely appears anywhere near the top of development agendas.

The trend for professionalising supply chain management in the private sector is slowly reaching the public sector in Africa but still rarely appears anywhere near the top of development agendas. This despite the fact that, in many developing countries, public procurement accounts for over 50% of GDP, or considerably more where the private sector is small.

Historically, procurement and supply chain management have been undervalued and viewed as a process rather than a professional function. With the realisation that effective supply chain management plays a critical role in ensuring funds are well used, value for money in the delivery of basic services is achieved, and transparency and accountability is assured, the value of professional supply chain management needs to be recognised. How will this happen in countries where procurement is viewed as an “add-on” to other careers?

The wave of legal and institutional reforms to public procurement across Africa over the past few years has certainly focused attention more firmly on the question of capacity building. Many universities are subsequently providing pre-service training in supply chain management which is beginning to instil an early appreciation of the value of the function.

In the health sector, where the issues are more acute, major programmes to combat diseases such as HIV/AIDS and tuberculosis have highlighted the importance of strong procurement and supply chain due to the critical need for regular access to medical supplies. The World Health Organization identifies equitable access to medical products, vaccines and other technologies as one of the six building blocks to a well-functioning health system. The traditional approach to provide expensive in-service supply chain management training to doctors and pharmacists so that they can add this on to their day job is slowly changing but more needs to be done to raise the profile of supply chain management in health institutions.

This trend towards institutional reform in the public procurement sector is not focused solely on health. Procurement training is increasingly available at all levels, from basic introductions to new procurement procedures to academic courses run by universities. Crown Agents has worked with the governments of several African countries to ensure that their procurement capacity building strategies are delivered. Our long expertise in supply chain management and procurement reform and our ability to understand the local environment enable us to work with procurement authorities across Africa. In Ghana for example we helped to develop a whole programme of professional development that covered short, medium and long-term requirements. We partnered with the Institute of Management and Public Administration to implement the short-term plan which was based on training an estimated 25,000 people including procurement staff, tender committees, the private sector and oversight institutions addressing the cross-cutting nature of procurement. We also teamed up with tertiary education institutions to develop the medium and long term training which included a bachelors level degree course in procurement.

Professionalisation is not just about training; it is about transforming the view of the profession itself to ensure a local supply of qualified new recruits in the future. Securing professional accreditation validates and upholds the importance of the supply chain management role. In Botswana for example the Public Procurement and Asset Disposal Board is seeking accreditation of its training materials both nationally and internationally after Crown Agents helped it to develop a series of procurement training modules and completed a training-the-trainers course prior to building capacity in its procuring entities.
Many countries are even establishing their own national professional bodies as membership of international professional institutions such as UK Chartered Institute of Purchasing and Supply and Chartered Institute of Logistics and Transport expands significantly in Africa.
In the health sector there are also a number of initiatives that support the strategic role of supply chain managers. Crown Agents has provided technical support and is an active stakeholder in ‘The People That Deliver’ initiative which promotes workforce excellence in supply chain management.
Building supply chain competence and promoting and valuing supply chain management as a professional career can make a positive impact on a country’s economic development and its people’s lives.

Content on this page is produced and controlled by Crown Agents.

Procurement and supply chain professionals converge over accountability


Myjoyonline.com

March 31, 2012

Over 500 senior executives and experts are expected to attend the Pan African conference on procurement and supply chain management from 8th to 9th of May, 2012 in South Africa.

Dr. Douglas Boateng, President and CEO of PanAvest International and Founding Chairman of KNUST’s West African Institute for Supply Chain Leadership will address the professionals at the 2012 Chartered Institute of Purchasing and supply (CIPS) conference under the theme “Risky Business”.

Participants will look at how procurement governance and professionalism can help negate business risks, plus assist governments to improve amongst others accountability and service delivery.

Dr Boateng currently chairs the institute’s Best Practice Adjudication Panel (Africa) and is also a FELLOW of the Institute. He is also the President of UK’s Institute of Operations Management-Africa, Editorial board member of Smart Procurement. He founded the West African Institute for Supply Chain leadership; a public private educational partnership between the PanAvest Foundation and KNUST Business School.

The Chartered Institute of Purchasing and Supply is the worlds’ largest professional body that upholds professional standards in procurement and supply chain management.

Portland Cement launches vetting of suppliers


Business Daily

February 20th, 2012

Troubled East African Portland Cement Company is seeking to overhaul its list of suppliers amid a boardroom wrangle that the government has linked to fraudulent procurement.

In a newspaper advertisement, EAPCC is seeking to vet afresh 98 suppliers of goods and services, saying only companies scoring highly as per its evaluation criteria will be pre-qualified.

“All existing suppliers who wish to be retained in the database (of suppliers) must apply and submit up to date information requested in the current pre-qualification data sheet,” read part of the advertisement.

Analysts say the fresh vetting of the company’ suppliers could be driven by a need to clean up its procurement department in light of the accusation of fraud.

“The company could be moving to ensure their long-running relationship with suppliers is not tainted with fraud and that it gets value for money,” said Robert Nyamu, the head of forensic audit at Deloitte Eastern Africa.

Mr Nyamu said the review of pre-qualified suppliers helps companies to shake off old suppliers who may collude with senior management to push through fraudulent contracts.

Among the items and services EAPCC is seeking to pre-qualify suppliers for include raw materials such as coal, bauxite, and clinker whose recent supply contract sparked off the ongoing court battles.

Industrialisation minister Amason Kingi—who sought to suspend EAPCC’s board on December 22—has accused it of spending Sh1 billion on goods without following competitive bidding and, in another instance, overruled the tender committee to vary the terms of a clinker contract. “Those purchases were made by direct procurement or restricted tendering,” read part of an affidavit by Mr Kingi.

The affidavit, for instance, said the board changed the terms of a contract to supply 140,000 tonnes of clinker after the supplier — Sanghi Industrial -— requested to increase the price from $58.90 per tonne after supplying only 67,000 tonnes.

The irregular purchases were made between August 15 and November 30, 2011, according to the affidavit.

The company’s directors, who have been temporarily reinstated by the high court, have hit back at Mr Kingi, saying the minister wants them out over a multi-billion shilling tender that the government allegedly wanted to go to a local supplier. They said the award of the Sh1.8 billion kiln upgrade contract to a South Korean firm, had upset government officials.

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