Leadership
SABMiller:
Developing Supply Chains That Foster Security, Development of the African Workforce

Not too long ago, in conversation with a former colleague, I explained SABMiller’s objective to “imbed sustainable development within African Procurement.” Following a slight pause, the response was, “That is quite gutsy! Not many organisations have been able to do that …”

Since that time, I’ve received a number of similar responses and have grown to learn that the word ‘gutsy’ is actually wonderfully descriptive of SABMiller’s business growth to date, and our adoption and implementation of sustainable development within our business operations. From its humble beginnings in 1886 (during the Johannesburg gold rush) SABMiller is now producing more than 200 beers in 80 countries on 7 continents. The African continent is key to this growth and holds immense potential. With brewing and beverage operations in 15 African countries, the continent already accounts for 40 percent of SABMiller’s business. And with the continent’s population expected to double to 2.5 billion people by 2050, and economic growth forecasted at 6 percent across the continent, Africa is rising!

Growing SABMiller’s African footprint, however, requires us to re-assess how we unlock the continent’s economic potential, whilst protecting its human and natural capital. We need to explore how we build and develop new supply chains, make responsible sourcing decisions and collaborate to ensure that our suppliers meet our license-to-trade requirements.

In recognising this, sustainable development is a key strategic imperative for SABMiller procurement. As custodians of our supplier relationships, it is believed that procurement is well positioned to identify and address social, environmental and economic challenges, and identify opportunities to unlock value within our supply base. Additionally, procurement has a unique responsibility to develop local supplier capacity to meet our license-to-trade requirements.

A fundamental license-to-trade requirement is the ‘protection of human rights’ within our supply chain. SABMiller has set minimum compliance requirements we expect from our suppliers in terms of labour standards, health & safety, business integrity and the environment. These requirements are set out in our supplier code of conduct and adherence to the code is assessed as part of our supplier accreditation process. The African continent however faces unique human rights challenges; high unemployment rates make workers vulnerable to workplace rights violations, often in combination with low wages and excessive hours. Such human rights infringements do not only pose immense risk to SABMiller’s internal operations and reputation but also pose a significant risk to local suppliers as this directly impacts their license to trade, business growth and the livelihoods of their employees. Within the African continent, it is a challenge that extends beyond ‘compliance’ and requires long-term commitment from those actively engaging our supply base.

In understanding and addressing these challenges, SABMiller Procurement is embarking on a journey to build capacity and competency within our African supply base to meet and continuously improve human rights practices within their operations. This is being done under the auspices of Project Blue Horizon. The project aims to continuously move SABMiller’s human rights requirements beyond compliance to best-in-class practices through supplier support, development and training. We are using information gathered from ethical audits, conducted as part of our supplier accreditation process, to develop training and support material to assist suppliers in setting up effective human rights management practices. Additionally, we endeavour to raise more awareness internally and externally by providing regular feedback on outcomes of ethical audits and to provide suppliers with guidance on addressing any human rights issues identified.

This project will require SABMIller Procurement to balance long-term ideals with short-term financial requirements. It is also testing our commitment to true change as we realise that uncovering human rights infringements in our supply chains will compel us to act. We also need to ensure scalability of the project across Africa, whilst being sensitive to local context. Furthermore, we need to establish how we collaborate on, and best leverage, the learnings from other organisations that have already embarked on this journey.

Finally, we realise that being “gutsy” in our approach is the only way to truly facilitate positive change.

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