Case study: How Bapco promotes sustainability across its supply chain
Wholly owned by the Government of the Kingdom of Bahrain, Bapco primarily engages in petroleum refining, storage, and the production of petroleum products. Suppliers may need guidance and encouragement to implement suitable policies for managing their potential environmental and social impacts and large organisations like Bapco are best placed to help suppliers achieve this, through their expertise in supply chain management and the subject matter experts that they employ.
This case study is based on the 2018-2019 Sustainability Report by Bapco published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
Bapco works with suppliers and contractors that share similar values Tweet This!, who must pass a prequalification assessment to verify their commercial experience, organisation, financial stability and other management processes for quality, environment and safety. In order to promote sustainability across its supply chain Bapco took action to:
- screen suppliers
- implement a Code of Conduct
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With this case study you will see:
- Which are the most important impacts (material issues) Bapco has identified;
- How Bapco proceeded with stakeholder engagement, and
- What actions were taken by Bapco to promote sustainability across its supply chain
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What are the material issues the company has identified?
In its 2018-2019 Sustainability Report Bapco identified a range of material issues, such as health, safety and wellbeing, value generation and distribution, human rights, emergency preparedness, asset integrity. Among these, promoting sustainability across its supply chain stands out as a key material issue for Bapco.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Bapco engages with:
| Stakeholder Group | Method of engagement |
| Government and Regulatory Authorities
| · Formal review of company strategy and plan with third parties, including reporting on the outputs of internal governance activities where appropriate · Regular coordination meetings · Direct meetings and consultation with regards to compliance and planning of new projects · Bapco website, emails and letters · Conferences, forums and workshops · Events and other outreach campaigns regularly coordinated with relevant government authorities |
| Financiers and insurers
| · Face-to-face meetings and conference calls · Written communication through letters and emails · Site visits and inspections |
| Suppliers and contractors
| · Formal joint venture arrangements for projects · Meetings with suppliers, as mandated in relevant procurement management procedures · Audits and other formal feedback mechanisms on contractor performance · Established supplier agreements · Formal feedback from vendors and suppliers |
| Customers
| · Meetings, including direct face-to face meetings and regional sector meetings · Daily communications, including emails and telephone calls · Customer feedback |
| Non-Governmental Organisations and academia
| · Joint research projects and Memoranda of Understanding, including collaboration with Ph.D. students to develop innovative solutions · Direct meetings, company events and campaigns |
| Local communities
| · Focus group meetings with local community representatives, specifically for BMP, including special interest groups such as the elderly and the disabled · Emails, telephone calls and social media (including WhatsApp and Instagram) · Visual material presentation, e.g. billboards · Media outreach through TV and Radio · Company publications in the Arabic language weekly Star magazine and English language Islander · Targeted campaigns |
| Local industries
| · Direct face-to-face and regional meetings, including regular established networking committee meetings · Conferences, forums and workshops |
| Employees
| · Forums and events which run throughout the year · Regular meetings at all levels of the organisation · Communication using a variety of media, including the Bapco intranet portal, the large electronic screen placed at the Refinery main entrance, desktop screensavers, departmental posters, and various Company information boards |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Bapco commissioned an independent third party to carry out an assessment through internal stakeholder workshops.
What actions were taken by Bapco to promote sustainability across its supply chain?
In its 2018-2019 Sustainability Report Bapco reports that it took the following actions for promoting sustainability across its supply chain:
- Screening suppliers
- Bapco uses an EHS (environment, health and safety) prequalification procedure to screen suppliers, ensuring compliance with established Bapco procedures and all relevant laws. The scope of the procedure covers all requirements necessary for prequalification prior to admission into the Approved Vendor List maintained by Bapco. The procedure includes questions on commercial experience, organisation, financial stability and other management processes for quality, environment and safety and is designed to complement Bapco’s Code of Conduct that includes guidance on expected working relationships between employers and suppliers. Suppliers are subject to audit by Bapco to ensure compliance with the prequalification criteria and other technical and commercial criteria as decided by Bapco. Appropriate support and advice is provided by Bapco to local suppliers wishing to be prequalified.
- Implementing a Code of Conduct
- Bapco has a Code of Conduct for all employees, whom it expects to work to the highest ethical standards. A foreword to the Code of Conduct is provided by the Chief Executive, who takes ultimate accountability for the way in which Bapco conducts its business. Bapco additionally expects its business partners to apply ethical principles that are compatible with its Code of Conduct, which provides detailed guidance to all employees on avoiding potential conflicts of interest. The Code of Conduct is published in Arabic and English as both e-copy and hard copy and awareness training is given to all employees, as part of induction and refresher training.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
1) Disclosure 308-1 New suppliers that were screened using environmental criteria
2) Disclosure 414-1 New suppliers that were screened using social criteria
Disclosure 308-1 New suppliers that were screened using environmental criteria does not correspond to any SDG.
Disclosure 414-1 New suppliers that were screened using social criteria corresponds to:
- Sustainable Development Goal (SDG) 5: Gender Equality
- Targets: 5.2
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.8
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.1
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References:
1) This case study is based on published information by Bapco, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:
http://database.globalreporting.org/
2) https://www.globalreporting.org/standards/gri-standards-download-center/
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