The processes a Procurement department follow are a critical and central component of any company.
In the current economic landscape, the pressure on procurement departments to find efficiencies is immense. In parallel with this pressure, mandatory regulatory compliance is also increasing. This includes laws specific to the UAE and it’s Emirates that affect the health and safety of workers.
Balancing fiscal challenges with spend on what may be viewed by some uniformed personnel as “optional compliance”. This can place Procurement staff in an extremely difficult position.
The reality is that many Procurement departments do not take into sufficient account the safety and health credentials of a prospective supplier. Or the working conditions under which the goods, materials or services that they procure are sourced.
Unfortunately, health and safety can come so low down on the list of priorities when choosing contractors that it is not given anywhere near sufficient priority, it can even be overlooked altogether.
Health and Safety is a Nontransferable legal duty
Despite the above reality, the fact remains that a company cannot export their risks and liabilities onto their contractors.
This is a nontransferable legal duty and the responsibility will always lie with the company. The company also has a duty to protect both their clients and the end service users from health and safety risk.
In addition, due diligence and incorporating health and safety into the supply chain process directly protects the company’s reputation. A failure in this area could prove disastrous, possibly even fatal for the company and it’s ability to trade or create profit.
Digging deeper, this seemingly calculated low risk stance now appears a lot more dangerous with far higher stakes than first thought.
Health and Safety in Procurements 3 stages
The procurement process can be broken into three important stages. These are: specify, select and monitor. By looking at these stages individually and independently we can glean a better understanding of what could go wrong when HSE is not considered as a priority in procurements processes.
Specify
Under “specify,” the appropriate health and safety components of any project are crucial. These aid in describing the services to be delivered.
Highlighting the HSE roles of all stakeholders can be the key to the success of this stage. In addition to answering pertinent questions helping to confirm that HSE considerations have been adequately reflected within the procurement processes. Such questions could include: Are HSE responsibilities clear for the contractors? What evidence is required to demonstrate effective management of health and safety ?
Selections
Secondly, “selections” refers to the key controls to be considered when selecting contractors or delivery partners. These may include: HSE statistics i.e. historical records available ? Has the competency of the responsible health and safety person with respect to the contract been evaluated ? How effective and suitable is the potential suppliers HSE management system ? Do they have a record of adherence to local HSE standards such as OSHAD ? Or, do they have international standards in place such as ISO 45001:2018 Occupational Health and Safety Management, ISO 9001:2015 Quality Management, ISO 14001:2015 Environmental Management ? If yes to the last question it is not enough to view only their ISO certificates. A wise Procurement department also asks to view and review elements of the system, such as pertinent safe operating procedures.
Monitoring
Finally, “monitoring” is the periodic review of the performance to evaluate the vendor. Within this should ba review of the health and safety measures in place.
Also within monitoring should be the contractual ability to manage/remove a contractor who demonstrates poor performance/compliance. Or breaches HSE within a contract and/or breaches HSE legislation.
How and Why Could Things Go Wrong ?
Potential health and safety failures during the procurement process could include:
- Not involving the companies health and safety staff in the procurement process
- Failing to describe the services required accurately during the procurement process
- Failing to understand the risks involved in the product or service being procured
- Failing to effectively monitor the contractor
- Cost over safety being the final deciding factor is choosing the supplier
The above listed failures in addition to not giving proper consideration to health and safety issues could lead to a general increase in the incidence of injury and illness. Other negative outcomes could include:
- Equipment failure
- Defective products or even hazardous materials entering the supply chain
- Serious health and safety failures ie. Death or serious injury of project worker
- Loss of company reputation, contracts and revenue leading to closure of company
Conclusion
A responsible procurement process should take a holistic approach and centre on other factors outside of cost to risk map suppliers and potential suppliers.
This approach will surely go a long way towards achieving improvements which aid in the prevention and/or elimination of workplace injuries and fatalities.
Factoring health and safety into the procurement process can be summed up to companies in one word – Protection. Protection for your employees, protection for your visitors, protection for your contracts, protection for your revenue and protection for both the company’s present and future.
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Our range of health and safety consultancy services includes;
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ISO 9001 and ISO 50001 - HSE legal compliance reviews and assistance
- Accident investigations
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- Long term or project based HSE outsourcing
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