Industry-Wide Coordination through Collaborative Planning Sessions is Changing the Way Companies Take on Health in Partnership with Contractors

By Jed Levine

Nina Arvanitidis was surprised to find that one of Shell's contractors had been looking forward to being audited.

This was not a typical response from a contractor, but then again, this was not a typical forum for a dialogue between companies and their supply chain networks.

Arvanitidis coordinates Royal Dutch Shell's HIV/AIDS programs and the comment above was shared by a major engineering services contractor at the Coalition's firstever roundtable for the oil and gas industry to address supply chain engagement on HIV/AIDS.

While Arvanitidis says she gained a number of new insights and ideas at the roundtable, the auditing issue was the most surprising to her-mostly because it made so much sense, yet it was assumed that contractors would be resistant to the notion.

"Usually when we think of compliance, we think of the auditor coming in and finding gaps, but we've discovered it can also be an affirmation of efforts," she says. "Here was a contractor saying we need someone to recognize these efforts as well or it will fall off the map."

Arvanitidis says that such open dialogue between members from multiple levels of the oil and gas industry's supply chain had been lacking until recently.

In general, engagement of the supply chain on health issues has remained a major gap for business-less than one-third of Coalition members reported having supply chain programs in a recent survey for the state of business and AIDS, tuberculosis and malaria.

But as evidenced by the oil and gas roundtable, the gap is beginning to narrow. Individual company actions are giving way to coordinated, geographic- and industry-based approaches. Knowledge sharing between upstream and downstream companies is on the rise. And business, with the support of the Coalition, is beginning to move toward a more coherent approach, in which standards of prevention, treatment and care will be met at every link in the chain.

Managing Risk Outside the Fence

"The very nature of the oil and gas industry is that it's heavily outsourced and relies heavily on a very long and complicated supply chain," says Rob Donnelly, vice president of health at Royal Dutch Shell. "Actually reaching all the people who work for you directly and indirectly-managing HIV is a challenge, but it's not impossible.

"When you start to think ‘so where is the actual risk and who is at risk?' the answer is the big chunk of people who don't work directly for Shell-the contractors and their families. They're equally at risk, if not more so, because they're out there in the communities. They won't necessarily have access to the same quality of healthcare as Shell employees-they're more reliant on community healthcare programs when it comes to the prevention and management of HIV/AIDS.

"If we don't somehow engage contractor companies, who's managing that risk?"

Companies like Shell are increasingly finding that they can play a role in managing risk throughout their supply chains. Creating clauses in contracts is a first step, but, as Arvanitidis points out, is insufficient by itself. Many of the small and medium enterprises at the lower end of the supply chain simply don't have the knowledge or experience to effectively implement an impactful workplace intervention.

Companies at the top of the supply chain, on the other hand, do.

Mika Frano, overseas health manager for Saipem, an Italian oil and gas contractor, says his company has not only made HIV/AIDS programs a part of its contracts, but has used those contracts as an entry point for knowledge sharing.

"It's a contractual obligation that you require from your contractors and sub-contractors, that we share with them the experiences and materials that we have," says Frano. "The knowledge we have regarding health management and prevention activities, it's not trademarked."

Frano says that Saipem's approach has improved the overall sustainability of its HIV/AIDS programs, by providing his contractors with the knowledge, resources and models his company has developed, as opposed to simple cash contributions.

"Sustainable development isn't giving one million dollars to build a clinic. Sustainable development is giving your knowledge, your experience, or whatever you have to offer, in order to support local people to carry on by themselves in the years to come," he says.

Still, Frano concedes that because of the globalized nature of the world economy, no one company has enough knowledge to adequately cover its entire supply chain-made up of employees with vastly different health needs, cultural backgrounds and knowledge gaps.

"We have Filipinos working in Nigeria, Nigerians working in the United States, Americans working in Norway, so we cannot exclude one part of the world from another," says Frano. "It's a global problem."

In the oil and gas sector and others, contractors farther down the chain are often staffed by migrant labor. That poses a challenge, since programs need to adopt a more nuanced approach to make prevention messages stick and improve uptake of testing and treatment.

Frano believes that platforms to bring together players from across the oil and gas industry is exactly what's needed to maximize the impact of knowledge-sharing and stimulate further knowledge co-creation.

"The biggest value of the [oil and gas] roundtable was to exchange concrete experience. To really understand how what the companies are doing is applied in the field in various countries."

Donnelly also thinks the knowledge- sharing and support approach to the supply chain is more sustainable than cash donations.

"We don't do it for pure philanthropy," he says of Shell's HIV/AIDS supply chain programs. "It actually makes sense for us to run a sustainable business by engaging business partners to take ownership, which in turn strengthens the communities in which we're operating."

"We're much more likely to support a program that we think is sustainable and will still be delivering results in years coming. And quite often what we can deliver there is less about money and more about building capacity and knowledge," he adds. It's this potential for knowledge sharing that drew Shell to support the oil and gas roundtable.

Donnelly sums up his company's contribution succinctly: "We connect people. We share our knowledge and expertise and we try to catalyze a response-connect, share and catalyze."

Industry- and Geography-based Coordination

A coordinated, industry-wide strategy to fight HIV/AIDS is not exclusive to the oil and gas sector. In fact, the strategy is exactly that being rolled out by the apparel industry in Lesotho. ALAFA (Apparel Lesotho Alliance to Fight AIDS), a non-profit coalition of companies, has created a standardized HIV/AIDS model now being used by manufacturers in the landlocked African nation.

Dagmar Hanisch, the director of policy and prevention at ALAFA, says that because of the complex nature of the apparel supply chain, a coordinated approach was necessary.

"The factories don't only work for one brand, so the compliance requirements aren't always the same," says Hanisch. "Our role is really to offer all factories a standardized workplace program that is legally compliant and comprehensive."

In only a few years, ALAFA has made tangible gains. The initiative is reaching three-fourths of the apparel industry workforce in Lesotho with prevention messages. Because of ALAFA, 60 percent of Lesotho's apparel workers now have access to antiretroviral (ARV) therapy in their factories.

The ALAFA model took best practices from HIV/AIDS workplace interventions in the region and created a standardized approach that could be broadly applied to all apparel manufacturers in Lesotho. The model includes components for education and awareness, voluntary counseling and testing (VCT) and ARV treatment.

Mabatho Ramasoiri knows firsthand the impact of ALAFA. A garment worker in Lesotho, after her husband died several years ago Ramasoiri became the breadwinner for her eight children. Soon she found herself getting sick.

"I used to be strong but then I started to get tired easily. Even in the summer months I got colds," she says. "I had heard about HIV and AIDS on the radio, and then they started to talk about it at the factory."

Ramasoiri decided to get tested through ALAFA at the factory where she works. "When I took the test I was nervous. I asked myself why I was doing this. But I got huge support from the counselor and other people who had tested, so I felt better," she says.

She found out she was HIV positive and has since become a peer educator with ALAFA, to raise awareness among her co-workers about the importance of knowing their status. Meanwhile, she's focusing on staying healthy for her family. "I know if I manage my disease, I can live a longer life. I have to be there for my children."

ALAFA's rigorous tracking of performance has shown high levels of VCT uptake-60 percent in some factories-despite significant stigma around HIV testing. While engagement with factory managers began slowly, says Hanisch, the results have helped create the needed critical mass to make the standardization approach effective.

"Initially there were more negotiations and prodding. Then a sort of snowball effect happened. Now we struggle to involve the factories fast enough," she says. "We're really filling a gap and a lot of workers are grateful for it."

ALAFA is supported by a number of private-sector partners, including EDUN, Gap Inc., the Levi Strauss Foundation, Nordstrom and the Wal-Mart Foundation.

Like the apparel sector, the oil and gas sector is faced with a long and complicated chain of contractors and sub-contractors.

"The biggest challenge is just the sheer complexity of the supply chain," says Donnelly. "We can talk about contractors; you might imagine for a large project such as the construction of a pipeline or production facility that there's only one firm, but there's usually hundreds. Even the main management and supply contractor companies will sub-contract their work many times over."

Because of the complex nature of their supply chain, participants at the oil and gas roundtable agreed that industry-wide standardization is central to future efforts.

For Shell, that kind of coordinated approach has been a critical success factor in building more sustainable supply chain programs. Through its recent partnership with Qatar Petroleum and the Qatari government, Shell is now supporting a standardized approach to HIV/AIDS management among a contractor workforce of 40,000 in Doha, Qatar.

"We're working together to develop a framework for managing HIV/AIDS, which can be applied to the whole construction industry and the oil and gas industry in Qatar," says Donnelly. "That is a much more fruitful approach, we think, than actually trying individually to target individual contractors."

But for certain companies, coordination by geographic area makes more sense than by industry. Clifford Panter, corporate health services manager for Mercedes- Benz South Africa, a subsidiary of Daimler AG, says his company's downstream supply chain doesn't need as much support as other small and medium enterprises in the area.

"The majority of our critical suppliers are major multinationals in their own right," says Panter. "We really expect those suppliers to manage their own risks, including whatever risks might pertain to HIV/AIDS.

"Our manufacturing plant is in the poorest half of the poorest province in the country. So the sustainability of business around the plant is as important as our supply chain. A sectoral approach makes sense, whether it's geographic or industry based. For us it's worked to mobilize all groups involved within a defined geographic area."

Panter says that in addition to program support, larger corporations with adequate resources must be advocates for action.

"Mercedes-Benz brought technical expertise in managing workplace HIV/AIDS programs to the table. But I think we also brought a fair amount of moral authority," he says. "A large part of society looks to multinationals [in South Africa] for support way beyond the provision of jobs. So business has a responsibility to provide leadership."

Making Standardization a Reality

Though it seems common sense, the most unique thing about the oil and gas roundtable was that for the first time, it got companies at all levels of engagement and experience, and each end of the supply chain, together in the same room-to talk.

One of the most valuable outcomes was the direction it provided for the oil and gas industry. But it also set an example for other private-sector industries and identified some critical success factors that could be applied across all business sectors.

Along with recommendations about the need for measuring performance and providing recognition for contractor programs, participants recommended that companies identify an internal champion within each contractor, who can advocate for the HIV/AIDS program.

Panter agreed that leveraging internal champions has been a critical success factor for Daimler's work. These champions can even have a multiplier effect.

"It's important to identify leadership within these small and medium enterprises who are prepared to become advocates for this approach outside their normal business-to leverage that leadership to mobilize not only internally but also to mobilize more SMEs," says Panter.

Above all, participants at the roundtable agreed that there was a need for standardization moving forward. Several companies said that they had worked for two different oil and gas majors at the same time and that each had different HIV/AIDS requirements. In a few cases, one corporation operating in different locations had differing requirements for each that were entirely arbitrary.

Standardization does not mean adopting a one-size-fits-all approach. Rather it will require companies to identify broadly applicable principles that can be tailored depending on local needs, knowledge gaps and partner capabilities.

Some of the recommendations currently being pursued by the Coalition include: guiding companies in creating HIV/AIDS contract clauses through individual support and the creation of adaptable templates; developing a toolkit featuring company-developed materials and best practices; and setting up additional roundtables that will include more contractors and address specific issues in supply chain engagement-such as increasing VCT uptake.

The Coalition's oil and gas industry working group will meet again in March 2009 for a roundtable hosted by Chevron Corporation in Houston, Texas. That roundtable will focus on cutting across HIV/AIDS, TB and malaria in the oil and gas supply chain.

Donnelly sees an important role for the Coalition in facilitating the coordination of the oil and gas sector as well as others-tracking best practices, standardizing processes and keeping companies accountable.

"GBC is very helpful in giving you a kind of reality check about what others are doing, and that brings some traction but also a bit of tension, because [GBC does] this benchmarking stuff and you get feedback about how you're doing. There's nothing like that to keep you sharp and keep you focused," he says.

Donnelly says the Coalition has an important role to play as a convener, through forums like the oil and gas roundtable. "I think GBC is very effective at bringing people together in all sorts of ways, raising the overall level of awareness but also facilitating a lot of sharing that otherwise wouldn't happen."

• Oil and Gas Roundtable: Find out what opportunities for action were identified
• Seven-Point Plan: Learn what companies can do to engage the supply chain
• Apparel Industry Impact: Watch ALAFA in action in Lesotho supply chain factories
• Expert Advice: Dotti Hatcher explains how Gap Inc. partners with its suppliers on HIV/AIDS
• Geographic Coordination: Critical success factors from Daimler’s partnership with SMEs