Task 2 - Sourcing and contracting – Anglo American Social Way toolkit

Bid evaluation

The information requested in the tender documentation should form the basis of the social performance criteria used to evaluate contractors’ bids. Anglo American’s or the site’s own previous experience of working with a contractor, as well as any high-profile adverse press and media reports on social and human rights-related issues related to the contractor, could also inform the evaluation. For security-related contracts, due diligence on the contractor must be conducted in accordance with the VPSHRs. Box 4B.7 provides examples of due-diligence topics for security contractors.

The social performance team should evaluate the social performance component of bids. Where significant potential social and human rights impacts and risks are foreseen, social performance managers should be involved in the proposal evaluation process.

Where social performance risks and opportunities are material, adequate management of social issues should be a basic eligibility requirement and non-compliant bids should either be rejected, or tenderers should be required to re-work their proposals. Options for achieving this include a simple pass/fail approach, or the bid-evaluation criteria could require minimum scores in each area (price, technical, SHE and social performance).

In circumstances where the social requirements are particularly challenging or unusual there may be an opportunity to work with the contractor to develop its capacity and improve its social performance approach to satisfactory levels before mobilisation. However, this approach should be carefully considered as it may fail and may result in delays to the schedule and an increase in costs.

Some social and human rights impacts and risks associated with the scope of work may have an environmental or other non-social cause, such as those social risks and impacts related to hazardous-materials spills, water management, vehicles using public roads and the generation of dust, noise and vibration. As such, the evaluation of contractor competence in these areas will typically be included as part of the technical and/or SHE component of tender evaluation, and social performance considerations may need to be integrated into those assessment criteria. This is typically the case for exploration drilling, as well as for transportation contractors.

A combination of one or more of the following could be considered grounds for disqualification of the contractor based on social performance, depending on the scope of work and associated social and human rights impacts and risks:

insufficient experience with implementing scopes of work with similar social and human rights impacts and risks
lack of understanding of the social and human rights impacts and risks in relation to the scope of work
insufficient human and/or financial resources committed to implementing the social performance aspects of the scope of work
failure to meet or adequately respond to tender documentation requirements and questions relating to social performance
failure to declare compliance with relevant standards, policies and other requirements
evidence of ongoing and unresolved labour issues with contractor and sub-contracted workers
a history of fines and sanctions imposed on the contractor by labour regulators and authorities
evidence of ongoing and unresolved material community grievances
material adverse media and press reports on social performance issues
refusal to adhere to Anglo American policies and standards or recognised equivalents.

Table 4B.2 Examples of potential social and human rights impacts and risks and controls/requirements for contractors

Impact Category	Examples of potential impacts	Examples of requirements for contractors
Community health and safety	Increase in HIV/AIDS and other sexually transmitted infections and increase in prostitution, as a result of a (contractor) workforce	Implement an STI and HIV/AIDS training and education programme which addresses the symptoms and behaviour change issues around the transmission and infection of HIV/AIDS, as well as other communicable diseases. In areas where there is a lack of recreational activities, consider the provision of suitable recreational infrastructure and opportunities; for example, in the (contractor) worker camp(s). It may be necessary to require a closed (contractor) camp, with limited interaction allowed with local residents. In such instances, it is vital to ensure adequate recreational facilities for the construction workforce and ensure that work rotations are suitable for maintaining the mental health of the workforce. Dry camps prohibiting alcohol or any other substance use. Develop guidelines which clearly outline expectations for (contractor) workforce behaviour.
Personal and political security Community health and safety Socio-cultural networks	Sexual exploitation and abuse	Develop and implement induction programmes, including a Code of Conduct and cultural awareness programme, for all new workers. This should increase sensitivity to local norms and customs and ensure that contractor workers are aware of appropriate and acceptable behaviours. If a contractor worker camp is deemed appropriate, consider a strategic location to limit the impact of the high numbers of external workers converging on local communities. If appropriate, require a closed contractor worker camp to limit the interaction between its workforce and local communities Dry camps prohibiting alcohol or any other substance use In areas where there is a lack of recreational activities, consider the provision of suitable recreational infrastructure and opportunities; for example, in the (contractor) worker camp(s). Develop guidelines which clearly outline expectations for (contractor) workforce behaviour.
Community health and safety	Inadequate housing conditions provided for workers	Contractually require the contractor to provide worker accommodation in compliance with Anglo American standards, as well as with national and local building regulations, including applicable standards on food safety, water, sanitation, waste management, and fire safety. Contractually require the contractor to provide accommodation that is clean, safe and meets the basic needs of workers. Consider specifying requirements in relation to charging for accommodation; providing minimum amounts of space for each worker; provision of sanitary, laundry and cooking facilities; provision of sufficient quantities of potable water; the location of the accommodation in relation to the workplace; the provision of first aid and medical facilities; heating and ventilation as appropriate; a separate bed for each worker; separate accommodation based on gender; common dining rooms; rest and recreation rooms; etc. Contractually require that workers’ freedom of movement to and from the accommodation is not unduly restricted. Contractually require the contractor to implement a worker grievance mechanism, which explicitly includes grievances related to worker accommodation in its scope. The contract should include the contractor’s plan (approved by the appropriate site representative) for construction and management of the contractor’s camp.
Community health and safety Economic	Negative environmental impacts on communities (water quality, water quantity, hazardous-material spills, dust, noise, vibration) resulting in health impacts or impacts on livelihoods	Environmental impacts on communities will be assessed as part of the SHIRA and appropriate mitigation measures will be developed. The contractor should be contractually required to implement the identified controls and obligations to repair/restore any damages caused as these pertain to the contractor scope of work. Require the contractor to report any incidents and spills immediately. The contract should require the contractor to participate in the site’s external grievance mechanism and associated grievance investigation process, and clearly outline the contractor’s responsibilities in investigating and resolving any grievances related to the contractor’s behaviour, activities, scope of work, etc. The contract should include information about the site’s external grievance mechanism, including response and investigation timelines. The contract should require the contractor to participate in the investigation of incidents as deemed necessary by Anglo American. The contract should include information on Anglo American’s LFI investigation process. Depending on the scope of work, the contractor may be required to provide a water-use and -monitoring plan; an emergency response plan (including potential impacts on external stakeholders, and vulnerable groups in particular); a hazardous-materials-management plan; etc. Contractor self-sufficiency in terms of water supply, waste-water treatment, and waste disposal may be required. In case the contractor proposes to use third-party facilities for these services, the site must first approve these facilities.
Community health and safety	Increase in traffic in local communities, including increased risk of collisions	Contractually require the contractor to implement a driver-safety programme; only use vehicles that adhere to Anglo American’s minimum vehicle standards; adhere to speed limits; monitor the speed and conduct of drivers on public roads. conduct a traffic-safety risk analysis that considers the specific driving route; develop a traffic emergency-preparedness and response plan that address emergency assistance to the driver and to third parties; avoid poor road conditions, populated areas, high-risk receptors; avoid dust generation and implement dust controls; require minimum rest periods; enforce compulsory drug and alcohol testing for drivers; etc. Contractually require the contractor to notify the site immediately in case of an accident so that an appropriate incident-investigation process can start at once. The contract should require the contractor to participate in the site’s external grievance mechanism and associated grievance investigation process, and clearly outline the contractor’s responsibilities in investigating and resolving any grievances related to the contractor’s behaviour, activities, scope of work, etc. The contract should include information about the site’s external grievance mechanism, including response and investigation timelines. The contract should require the contractor to participate in the investigation of incidents as deemed necessary by Anglo American. The contract should include information on Anglo American’s LFI investigation process.
Personal and political security Reputational risk to the business	(Perception of) lack of fairness and transparency in the contracting and/or recruitment processes used by the contractor	Include realistic local employment, training and contracting requirements and targets in the contract. Contract should include the contractor’s plan (approved by the appropriate site representative) for meeting local procurement and hiring targets, including approaches for advertising, identifying and selecting local suppliers and workers. Require contractors to make information about job openings and contracting opportunities accessible to local communities The contract should set targets, objectives, and/or conditions around recruitment, hiring, training, management and promotion of equal opportunity and a diverse workforce, including in relation to gender. The contract should prohibit discrimination and specify how performance against equal opportunity and diversity will be measured and reported on. The contract should include a definition for ‘local’ employment aligned with the site’s definition, and include any targets, objectives, and/or conditions around the recruitment, hiring, and training of the local workforce. For example, if the contractor is required to use a site’s pre-established process for identifying potential local job candidates, then the contract should specify this. The contract should include a definition for ‘local’ procurement, and include any targets, objectives, and/or conditions around local procurement. For example, if the contractor is recommended to use a site’s database of (pre-approved) local entities to identify potential local contractors, then the contract should specify this.
Personal and political security	Rude or inconsiderate behaviour of contractor workforce towards local residents	Develop and implement induction programmes, including a Code of Conduct and cultural-awareness programme, for all contractor workers. This should increase sensitivity to local norms and customs and ensure that contractor employees are aware of appropriate and acceptable behaviours. The contract should incorporate specific requirements and roles and responsibilities for the contractor in terms of stakeholder engagement, including engagement with local communities, government, and media. For example, a site may have guidelines for interaction with local communities which the contractor has to adhere to, or a site may have protocols for engaging with government or media which may or may not permit contractors to engage with these entities. The contract should require the contractor to participate in the site’s external grievance mechanism and associated grievance investigation process, and clearly outline the contractor’s responsibilities in investigating and resolving any grievances related to the contractor’s behaviour, activities, scope of work, etc. The contract should include information about the site’s external grievance mechanism, including response and investigation timelines. If a contractor worker camp is deemed appropriate, consider a strategic location to limit the impact of the high numbers of external workers converging on local communities. If appropriate, require a closed contractor worker camp to limit the interaction between its workforce and local communities Dry camps prohibiting alcohol or any other substance use
Personal and political security	Human rights infringements by security contractors	Besides conducting in-depth due diligence on the security provider as a company, and on the individual security provider’s employees, the site can: Require all security provider employees working on site to be trained on the VPSHRs, in particular on the appropriate use of force. Require adherence to VPSHR requirements. Specify whether security forces are allowed to carry firearms or other weapons. Specify that contractors are required to exercise restraint and caution in a manner consistent with the UN Basic Principles on the Use of Force and Firearms by Law Enforcement Officials and the UN Code of Conduct for Law Enforcement officials. Require the contractor to develop and implement policies regarding appropriate conduct and the use of force. Require the contractor to use force only when strictly necessary and to an extent proportionate to the threat. In a case where physical force is used, require the contractor to properly investigate and report the incident to the site security manager, and refer the matter to the local authorities. Where force is used, require the contractor to provide medical aid to injured persons, including to offenders. Allow for termination of the contract where there is credible evidence of lawful or abusive behaviour by contractor personnel. The contract should require the contractor to participate in the site’s external grievance mechanism and associated grievance investigation process, and clearly outline the contractor’s responsibilities in investigating and resolving any grievances related to the contractor’s behaviour, activities, scope of work, etc. The contract should include information about the site’s external grievance mechanism, including response and investigation timelines. The contract should require the contractor to participate in the investigation of incidents as deemed necessary by Anglo American. The contract should include information on Anglo American’s LFI investigation process. Include the security contractor training plan (approved by an appropriate site representative) on the VPSHRs.
Personal and political security	Labour rights infringements of contractor workers	Ensure contractor employees are aware of/have access to site-worker grievance mechanism, including confidentiality and anonymity. Contractually forbid the use of child and forced labour in the supply chain. Require contractor adherence to the Anglo American Code of Conduct, which prohibits bullying, discrimination or harassment. Require contractor adherence to ILO standards on child labour, forced labour, minimum wages, working hours, social security, etc. Prohibit Anglo American contractors from withholding workers’ passports and other identification documents. Specify health and safety requirements for worker accommodation (see above). Contractually allow for termination of the contract where there is credible evidence of ongoing labour-rights infringements. The contract should require the contractor to implement a grievance mechanism for workers, including the workers of its sub-contractors. The worker grievance mechanism can be that of the contractor, if the grievance mechanism is in line with IFC Performance Standard 2. Alternatively, Anglo American’s worker grievance mechanism can be extended to the contractor. The contract should specify how grievances should be addressed and it should outline roles, responsibilities, and required reporting on worker-related grievances.
Infrastructure and services	Pressure on availability and affordability of local housing	Where worker camps are preferable, the following requirements for contractors should be considered: Camp access rules – will it be open or closed to the public, and will camp residents be allowed to use local facilities? Realistic local-procurement requirements and targets for camp services such as catering, food, cleaning, etc. Where workers are integrated into local settlements, the following requirements for contractors should be considered: Develop and implement induction programmes, including a Code of Conduct and cultural awareness programme, for all contractor workers. This should increase sensitivity to local norms and customs and ensure that contractor employees are aware of appropriate and acceptable behaviours. Contracts should include the contractor’s plans (approved by the appropriate site representative) for worker accommodation, with details of location, timelines, size, standards, etc.
Infrastructure and services	Damage to private property	Require the contractor to participate in any LFI investigation process as deemed necessary by Anglo American. Contractually specify responsibilities for compensation for any damage. The contract should require the contractor to participate in the site’s external grievance mechanism and associated grievance investigation process, and clearly outline the contractor’s responsibilities in investigating and resolving any grievances related to the contractor’s behaviour, activities, scope of work, etc. It should include information about the site’s external grievance mechanism, including response and investigation timelines.
Socio-cultural networks	Demobilisation of a large non-local contractor workforce, resulting in an increase in crime rates and social ills	Maximise the local contractor workforce by requiring realistic targets for local employment. Require contractors to facilitate transport of demobilised workers to their area of origin. Require contractors to provide electronic payment of salaries to their workforce. The contract should require the contractor to participate in the site’s external grievance mechanism and associated grievance investigation process, and clearly outline the contractor’s responsibilities in investigating and resolving any grievances related to the contractor’s behaviour, activities, scope of work, etc. The contract should include information about the site’s external grievance mechanism, including response and investigation timelines. The contract should specify requirements for the retrenchment of (local) workers. The contract should include the contractor’s plan (approved by an appropriate site representative) for demobilisation.
Socio-cultural networks	Increased skills and training opportunities in the local area	Ensure that contracts include requirements and targets for training and development of local workers. The contract should specify the contractor plans (approved by an appropriate site representative) for skills transfer to local (unskilled) employees, and other training, for the duration of the contract.
Economic	Increased local employment	Write requirements for maximising local employment into contracts and prohibit discrimination based on gender or diversity. Sites can conduct a skills census in local communities to identify suitable workers, develop a list of potential workers, and recommend contractors to use this list to hire local workers. Require the contractor to advertise its employment opportunities and associated skills requirements locally. The contract should include a definition for ‘local’ employment, and include any targets, objectives, and/or conditions around the recruitment, hiring and training of the local workforce. For example, if the contractor is required to use a site’s pre-established process for identifying potential local job candidates, then the contract should specify this. The contract should include the contractor’s plan (approved by the appropriate site representative) for meeting local hiring targets, including approaches for advertising, identifying and selecting local workers.
Economic	Increased demand for local goods and services	Assess whether the scope of work/contract can support the local socio-economic benefit delivery strategy in terms of local procurement, including the potential of unbundling large contracts – see SED (section 4A). Contractually require contractors to prioritise local subcontracting where feasible. The site should conduct a local business census in local communities to identify suitable local enterprises, develop a list of such enterprises, and recommend contractors to use this list to procure locally. Require contractors to advertise sub-contracting opportunities locally. The contract should include a definition for ‘local’ procurement, and include any targets, objectives, and/or conditions around local procurement. For example, if the contractor is recommended to use a site’s database of (pre-approved) local entities to identify potential local sub-contractors, then the contract should specify this. The contract should include the contractor’s plan (approved by the appropriate site representative) for meeting local procurement targets, including approaches for advertising, identifying, and selecting local suppliers. The contract should specify requirements for sub-contractor management (including labour-related issues such as labour conditions and payment terms).
Economic	Limited access to land used for livelihood activities	Require the contractor to conduct the works in such a way as to minimise any public-access issues. This could include adjusted working hours. The contract should require the contractor to participate in the site’s external grievance mechanism and associated grievance investigation process, and clearly outline the contractor’s responsibilities in investigating and resolving any grievances related to the contractor’s behaviour, activities, scope of work, etc. The contract should include information about the site’s external grievance mechanism, including response and investigation timelines.
Reputational risk to the business	Raised/unrealistic local community expectations due to contractor commitments	Require the contractor to only make commitments to external stakeholders if these commitments have been authorised by the appropriate Anglo American staff member. The contract should include specific requirements and roles and responsibilities for the contractor in terms of stakeholder engagement, including engagement with local communities, government, and media. For example, a site may have guidelines for interaction with local communities which the contractor has to adhere to, or a site may have protocols for engaging with government or media which may or may not permit contractors to engage with these entities.
Cultural heritage	Damage to cultural heritage	Require contractors to implement the site’s Chance-Find Procedure. Include information about cultural-heritage sites in and near the mine site, including any protection measures that have been put in place to protect these sites in the induction training to raise awareness.

4B.2 Guidance

4B.2 Guidance