Contractors and suppliers

In 2015, Shell spent $56.3 billion on goods and services from 52,000 suppliers globally. Around 216,000 contractors worked to deliver Shell projects and help run our operations.

We seek to work with contractors and suppliers that behave in an economically, environmentally and socially responsible way, as stated in our Shell General Business Principles. We have a set of principles for our suppliers that provides a consistent framework detailing what we expect. The Shell Supplier Principles cover what is required from our suppliers regarding business integrity, health and safety, social performance, and labour and human rights. These apply regardless of the business environment in the oil and gas industry.

It is important that our suppliers have the appropriate policies, principles and standards in place within their own company. Building strong relationships with our suppliers is essential to delivering our projects, running our operations and ensuring suppliers place the same importance on health, safety, the environment and community impact as we do. In close collaboration with suppliers and contractors, we work towards our safety goal of no harm and no leaks at our sites.

Certain areas of our supply chain may pose a higher labour rights risk, due to their location and the nature of the goods and services we procure. Of all assessments carried out for compliance with our supplier principles in 2015, 384 suppliers were subsequently awarded contracts. The number of assessments follows our risk-based approach and is dependent on the level of project activity and the number of new contracts awarded throughout the year. If gaps are identified, we sometimes work with our suppliers and contractors to help them understand how to close these gaps. We also work closely with specific suppliers – such as those in developing countries – to help them develop the right skills, policies and management systems. A successful example of this is the VIP Car Rental company in Iraq (see external opinion).

Looking after our workforce

During 2015, as part of our global worker welfare programme, we implemented our Accommodation and Welfare Guide, which was published in 2014. This provides tools and management guidance for providing safe, secure and comfortable accommodation for workers who are away from home and sometimes in remote areas – whether their needs are physical, mental, cultural or social. This guidance is applied at a number of new Shell ventures.

Shell contributes to economic development in the countries where we operate – either by employing people directly or through our partners, such as government or business partners. At the outset of a project, we consider how we can employ local suppliers and individuals. If needed, we help them build capabilities that meet our safety and quality standards. We also support the growth of local businesses in many countries where we work (we refer to these efforts as local content). (See Social performance).

In many countries, a local content plan forms part of the bid criteria against which potential suppliers are assessed. For example, a global supplier to Shell partnered with an independent First Nations company to form The Bouchier Carillion Group, in line with the plan included in the bid. They provide facilities management services to Shell in Alberta, Canada. This partnership enables The Bouchier Carillion Group to use its global experience and support regional initiatives, particularly those focused on aboriginal youth and women in business.

External opinion

“The VIP Car Rental company provides passenger transport services for Shell Iraq Petroleum Development (SIPD) in the Majnoon area of southern Iraq. We are proud to be a supplier to a global company like Shell.

By working closely with the SIPD logistics team, we are able to quickly solve issues so that we can provide the services needed by SIPD in a safe and timely manner.

We are a fully-owned Iraqi company, managing one of the highest risk activities in Iraq. Local driving habits are tolerable at best, but with the support of SIPD, we have successfully driven 2 million km and achieved two years of operations without injury. We have also scored 100% in Shell’s road safety and driver assessment programme.

In future, we recommend that Shell works closely with the local police to improve road security between Basra and Majnoon.”