The World Bank Group's International Finance Corporation (IFS) has produced a new guide for companies seeking the benefits of linkages with local SMEs in the developing world.
Since 2001 IFC has partnered with several oil, gas and mining (OGM) companies to enhance and promote local procurement. Together, we have implemented programs dedicated to training local businesses to produce goods and services that meet the standards and requirements of multinational operators. Building on many years of experience in emerging markets, IFC has already produced several good practice manuals on implementing local procurement programs1.
This short guide takes a step back. It is designed to help project site operators in companies in the extractive industries to create a policy and strategy for local procurement.
It aims to achieve this through:
- The identification of business drivers that make local procurement a strategic business tool and not just a goodwill initiative
- A methodology for determining an appropriate definition of local as well as templates for drawing up a local procurement policy and designing a program
- Advice on assessing the company’s state of readiness to undertake a local procurement program
Companies are encouraged to devise a rationale for a LPP that can be embraced by a variety of departments, such as Procurement, HSE, CSR and operational end-users.
This document expands upon Business Linkages Practice Notes2 first published in 2007.