Enhancing the benefits of local content: Integrating social and economic impact assessment into procurement strategies

Abstract

One of the most encouraging recent developments in supply chain management has been the concerted effort to incorporate local small-to-medium enterprises (SMEs) into the supply chains of multi-national corporations. However, local SME procurement can lead to adverse social impacts. This paper demonstrates how the integration of social and economic impact assessment (SEIA) into sourcing strategy can be an effective tool to enhance the benefits associated with projects to local communities. Drawing on research into the mining, oil and gas sectors, the contribution of this paper is the application of impact assessment methodologies to local procurement. The paper recommends the development of a local procurement strategy and offers a step-by-step process for applying a Local Procurement Social Risks and Opportunities Assessment to local procurement planning. © IAIA 2011.