Extractive Industry Company Policies and Procedures

At a glance

  • Extractive companies are increasingly making local procurement a business priority.

  • Fostering local supply chains help strengthen the social license for extractive operations, even as it helps achieve meaningful development outcomes.

  • Understanding companies’ local procurement priorities can help governments design complementary policies. 

Case Studies

Key Resources

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Local Procurement Strategy

This resource presents the procurement strategy in the Kyrgyz Republic, which seeks to create significant economic benefits at the local, ...

Rio Tinto Procurement Principles

This resource is intended to be an overall guiding document, pulling together the existing procurement tools, policies, and best practices ...

Topic Briefing

Extractive companies are increasingly developing internal policies and procedures to make local procurement a business priority. These strengthen companies’ social license to operate, and their chances of achieving meaningful development outcomes in the regions where they operate.

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Internal policies and procedures outline the necessary priorities within a company to move local procurement efforts forward. The International Finance Corporation (IFC) has developed a guide, based on its global experience, to help companies develop robust local procurement programs, and IFC-supported efforts include best practices identified in the guide. Some examples of companies’ local procurement policies in extractives include:

  1. Anglo American’s local procurement policy. 
  2. Nevmont’s Stakeholder and Stakeholder Engagement Policy, which includes value chain aspects.
  3. Total’s Fundamental Principles of Purchasing, which includes address value chains, and outline ways to give local businesses an opportunity to develop.

When examining company policies and procedures related to local procurement, it is useful to understand the priorities driving them. These priorities give a strong indication of the areas where industry will most likely advance local procurement, and where government interventions are a necessary complement.