Procurement Practices

In line with our strategic objective of Championing Sustainability Stewardship, we have established a series of targets related to our procurement practices that will be implemented progressively,
aiming to have them all fully in place by the end of 2023.

These targets include the development of a comprehensive ‘Supplier Code of Conduct’ and the creation of a ‘Responsible Sourcing’ Policy. Additionally, we will conduct a thorough assessment of all our suppliers to identify their sustainability impact in areas such as health and safety, environment, and human rights. Furthermore, an annual evaluation of suppliers based on environmental, social, and governance (ESG) factors will be conducted, with the outcomes of these assessments being reported in our sustainability reports.

As of today, we have in place tools such as Qatar Steel’s Governance Charter and Procurement Policy (please click here or visit www.qatarsteel.com.qa) which serve as frameworks for implementing best practices in the supply chain management. In 2022 we introduced the “Responsible Sourcing” Policy which emphasises our will for fair business practices and health and safety, environmental and human rights protection within supplier organisations, and we expect all suppliers to comply with a Code of Ethics and Business Conduct policies.

To optimise our interventions, a thorough analysis of our suppliers has been conducted to identify key categories. The classification of these suppliers as “key” is determined by two primary factors: the volume of materials
purchased from them and the corresponding spending. Based on this analysis, it has been concluded that the key suppliers are those from whom we procure the following raw materials: iron ore pellets, steel scrap, ferro silicon manganese, and ferro silicon. For these suppliers, an evaluation sheet has been prepared based on ESG criteria, with the possible achievable score ranging from 0 to 100. Qatar Steel preferably engages with suppliers having scores higher than 50. Suppliers with established Environmental, Health, and Safety Management Systems are given priority through this scoring process, while those without such systems are encouraged to develop their policies
and governance frameworks. Furthermore, we encourage suppliers to adhere to human rights and labour practice standards, including ILO conventions on child and forced labour, non-discrimination, and more.

Additionally, since 2016, we hold the BRE BES 6001 Issue 3.1 responsible sourcing certification from CARES. This certification ensures that our construction products are manufactured using responsibly sourced materials. The BRE standard BES 6001 encompasses various aspects such as organisational governance, supply chain management, and environmental and social considerations, all of which must be addressed to ensure responsible sourcing of construction products.

QATAR STEEL’S CONTRACT EMPLOYEES

The organisation maintained a consistent number of contractors throughout the year 2022, with an average of 1,058 contractors working with us. The contractor count ranged from a minimum of 906 to a maximum of 1,361, as determined by monthly averages. The nature of our organisation, operating in a sector with continuous operations year-round, contributed to the absence of significant fluctuations in contractor numbers.

Qatar Steel hires contractors for a wide range of activities, encompassing skilled and unskilled manpower, security services, service room waiters, IT staff, crane operators, cleaning services, emergency medical service, and various others.

All Contract Employees are ensured to be paid above the minimum wage as all contracts stipulated by Qatar Steel require that the Contractor ensure adherence to “Article 26 – Compliance with Qatar Laws”. This Article states that the Contractor is obligated to comply with all applicable laws and regulations in the State of Qatar for the
execution of the contract. This includes being responsible for identifying and paying all government levies, duties, fees, and charges related to the work.

LOCAL PROCUREMENT

Qatar Steel plays a vital role in fostering the economic progress of Qatar through its active support of local businesses via a supply chain localisation program known as ‘Tawteen’. Spearheaded by QatarEnergy, Tawteen is a
strategic endeavour that effectively bolsters the domestic economy by creating fresh prospects and enhancing the capabilities of Qatari-based companies, specifically small and medium enterprises (SMEs).

This comprehensive program encompasses three fundamental pillars: the facilitation of new investment opportunities, the implementation of supplier development initiatives, and the introduction of a pioneering In-Country Value (ICV) Policy.

This year witnessed a significant rise in our total procurement spending (+74%) attributable to increased production. While the spending on local suppliers experienced absolute growth (approximately 29%), it did not keep pace with the overall spending. This is primarily due to the limited availability of scrap within Qatar, causing Qatar Steel to substitute this raw material with others. As a consequence, our spending on local suppliers decreased from 35% in 2021 to 26% in 2022.

SPENDING ON SMEs

In our commitment to fostering inclusive growth within our national economy, Qatar Steel places special emphasis on supporting local small and medium sized enterprises (SMEs), defined as enterprises with less than 250 employees, and particularly those from which we procure scrap.

We have defined a strategic target aiming at increasing spending on local SMEs. As part of this initiative, we closely monitor the annual expenditure dedicated to these organisations. In 2022 the spending on local SMEs decreased mainly due to reduced availability of scrap in Qatar.