During the Humanitarian Networks and Partnerships Weeks (HNPW), HLA ran a session on local procurement. This session brought together participants from a wide range of organisations in Geneva and around the world.
Shorter supply chains have long been a big topic in the humanitarian community. Buying supplies locally instead of flying them in from abroad can support the economy in a crisis-affected area while at the same time being more efficient and environmentally friendly. However, many questions and issues remain. The new Local Procurement Learning Partnership (LPLP) focuses on these.
Rebekah Yore introduced participants to the LPLP. Its first proposed project is the establishment of a local supplier register, a shared database hosted by HLA that will promote easier and more effective local procurement. LPLP will also gather evidence of the impact of using local procurement to support beneficiary communities and establish baseline metrics for local procurement spend, aiming to move towards making procurement a part of programming. Finally, LPLP will address compliance and quality barriers that local suppliers and manufacturers experience.
The impact of COVID-19
According to Daniel Birungi (Uganda Manufacturing Association) “the COVID pandemic forced a pivoting of procurement due to limitations in access to global supply chains. The silver lining out of the COVID pandemic on the international sourcing front was in the realization that capacity exists to supply several of the items previously sourced globally. Today’s story is a mixed bag though as the opening up of logistical limitations is seeing some pivoting back into the pre-covid mentality and reinforcement of the (often) restrictive procurement guidelines.” This echoes findings from a study by HLA intern and King’s College London student Caoimhe Macgabbhan who recently published her report entitled “Localisation in the Aid Logistics Sector: Perceptions, Challenges, and Opportunities”.
Claire Travers presented her recent research. This included supply chain disruptions experienced in the humanitarian aid sector in 2020 and highlighted the variety of issues encountered. A majority of interviewees reported experiencing unpredictable pricing, an inability to source, purchase, or receive items, increased lead times, and quality concerns when items were finally delivered.
Given the likelihood of future large-scale disruptions, Daniel Birungi called for “inbuilt targets for local procurement that are reviewed and updated regularly” to “build resilience into international humanitarian procurement practices by pushing ever-increasing levels of local procurement”. Participants agreed that this was an important consideration.
Susan Hodgson (Save the Children International) highlighted that local procurement “has to be better than moving stock internationally and reducing local economy” and “can benefit socially by providing jobs, better standards of living etc.”. This opinion was widely shared in the room. Wojciech Piotrowicz (HUMLOG Institute), who is an advisor to the Government Centre for Security in Poland, highlighted the pointlessness of shipping items that are freely available in Poland there to help refugees from Ukraine.
Daniel Birungi pointed out that “from the perspective of a host community on the refugee front, local procurement is also a fast-track method of ensuring community buy in”. John Jal (YSAT), who represents a refugee-led organisation, highlighted their involvement in the COVID-19 response with vital products like handwashing stations.
Susan Hodgson agreed that community involvement is important, “including diverse groups, female owned businesses, community businesses, not just large ones or suppliers based in capital cities but how we can drive a really local approach”. This tied into a wider debate about how “local” local procurement should be. In the session, it was agreed that the key measure should be that the money stays in the area.
As a further advantage of local procurement, its potentially lower environmental impact was highlighted in the session. However, Susan Hodgson cautioned that “local may not always be greener, and we need to address this”. Daniel Birungi believes that local procurement is “a good driver of sustainability and sustainable sourcing”. Susan Hodgson added that by sourcing more locally, organisations can “help local suppliers to drive greener solutions”.
John Jal highlighted the difficulties his organisation faced in “getting the funds approved to be used by YSAT to innovate a unique solution for the pandemic”. He stated that YSAT was faced with mistrust and “the technical rigidity with internal procurement systems, fear of the unknown, and the top-down procurement policy”. Participants agreed that these are common issues they have seen across multiple contexts.
Daniel Birungi pointed out that in his experience “complaints always arise around the complexity of the procurement systems and the fact that most INGOs do centralized procurement with decisions made quite far from the local context”. Many organisations are now decentralising their processes.
Cost savings are a key argument for centralised, global procurement. Higher up-front cost for buying local can be off-putting. However, the ability to source replacement parts or service items throughout their whole lifecycle must also be considered. In areas that are hard to reach, this can be a real challenge unless supplies and expertise are available locally.
There were also questions about compliance with standards and the difficulties of gaining reliable information on local suppliers and their performance. Safeguarding was highlighted as one crucial concern to avoid local procurement driving practices such as child labour. Daniel Birungi highlighted that “there already exists significant local capacity to vet compliance to international best practices and this must be the bare minimum requirement for getting a foot into the international procurement landscape”.
While there was wide agreement that local procurement should be increased, many open questions remain. The LPLP offers a forum for those working in this area to come together to exchange experiences and find ways to overcome issues.
- Dr Sarah Schiffling, Senior Lecturer in Supply Chain Management, Liverpool John Moores University
Learn more about the Local Procurement Learning Partnership by visiting their dedicated page on the new HLA website.