Contractors and supply chain
Contractors and our business
The relationships between Cairn and our contractors are paramount to safe and efficient operations. We consistently engage with all contractors to ensure our expectations are met in the services provided. This proactive approach has proved invaluable to the collaborative delivery of our ongoing operations.
Our business is highly reliant on the use of specialist contractors and suppliers, typically not retained in-house due to variation in demand and high cost, and as such they contribute to the delivery of our strategy. In 2016, 63% of our workforce were contractor personnel*, amounting to 64% of hours worked. Good management of contractors and suppliers, and ensuring they meet our high standards of responsible working practices, is therefore critical in maintaining those standards. Where we can, we seek to maximise local participation in the workforce and supply chain.
CR issues for our contractors
It is important that our contractors share our focus and culture on all aspects of health, safety and environment (HSE) and Corporate Responsibility (CR) to maintain our licence to operate. Experience, competence and demonstrating good performance are some of the key issues when it comes to choosing the right people to supply the provisions, equipment and services needed to help run our business. Cairn applies a rigorous selection process in choosing contractors, which is embedded in Cairn’s Contractor Management Procedures and which includes assessing contractors’ competency levels in HSE and related management systems (see Supply chain management).
During an offshore drilling campaign, a number of activities are undertaken that may pose significant HSE risks. These crucial processes include, but are not limited to, the rig, marine vessels, helicopters and supply base operations. In Senegal, this emphasis continued during the closure of the phase two appraisal and drilling programme in 2016, and during planning for the 2017 campaign (see Major accident prevention and safety).
Our robust anti-bribery and corruption (ABC) policies are of growing importance as we start to operate in new areas of the world.
We have a zero-tolerance approach to bribery and corruption (see Ethics, anti-bribery and corruption and transparency) and conduct risk-based due diligence on contractors, as detailed in our ABC procedures.
The UK Modern Slavery Act (MSA) came into force during the year, although we did not fall under its provisions in 2016. The implications of the Act mainly affect our supply chain and contractors in terms of measures to ensure forced labour does not occur within our operations. We are likely to fall within the Act in 2017 and so conducted an initial gap analyses in 2016; actions identified have been included in our CR objectives for 2017 (see Human rights).
Our recruitment policies seek to employ personnel local to our host countries where they are suitably qualified, and we encourage our contractors to do the same. We also give preference to local suppliers through our contracting and procurement policies and procedures where they are able to meet our CR requirements. In addition, we are looking to build local capacity through partnership with local organisations and academic institutions (see also Social and economic benefit). Our stakeholders continue to take an interest in opportunities for local contracting services and we anticipate that this interest will grow in the coming years. We are pleased to be able to report, in these early stages of the Senegal project, that local personnel in Senegal represented 22% of our workforce.
Total national and non-national contractors (%)
Read more on our supply chain management.
- Run contractor workshops in Senegal with themes including Life Saving Rules and Modern Slavery Act (MSA)
- Support other programmes planned across the Group
* In the ARA 2016 this figure is 61%, due to slight change in methodology for calculating numbers of contractors.
- Maintain licence to operate
- Deliver operational excellence
- Health, safety, environmental and security incidents
- Operational and project performance
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