Performance
Supply chain
We apply a life cycle approach to our sustainable development actions up and down the supply chain, encouraging those we work with to adopt similar sound practices.
We engage our suppliers and believe that payments to suppliers constitute a strong additional benefit to the economy, generating employment and creating wealth in other sectors. Across the world in 2008, we spent US$30 billion on goods and services with over 58,000 suppliers. Our procurement practice is explained in The way we buy. Rio Tinto has developed a programme of supplier engagement that includes sustainable development criteria in its contracts.
An example of how our operations contribute locally is the Diavik diamond mine in the Northwest Territories of Canada. In 2008 Diavik spent C$724 million on capital and operating expenses with 70 per cent going to northern businesses. Of this northern spend, 35 per cent or C$254 million was with northern Aboriginal business. Since construction of the operation was approved in 2000, over C$1.7 billion has gone directly to local indigenous companies.
By understanding the health and environmental impacts and benefits of our products over their complete lifecycle, we can potentially improve our processes, enhance our reputation in the marketplace, differentiate our products from our competitors and become a "brand of choice" for metals and minerals products. The enhanced reputation we earn by adopting a lifecycle "know your products from mine to end of life" approach helps improved access to land, markets and financial assets.
Rio Tinto has maintained a programme of developing life cycle assessments (LCA) for all of its major products, including aluminium, iron, copper, coal, uranium, gold and silver. The LCA outputs have proved useful in understanding our carbon footprint, engaging customers and assessing process improvements.
Our approach to product stewardship has created tangible business value by providing scientific input to developing regulations affecting market access, ensuring ongoing engagement with customers, maintaining access to markets and successfully securing premium prices based on product differentiation and corporate reputation.
Rio Tinto has been chosen as a gold and diamond supplier to the world's largest retailer, Wal-Mart, which places gold and diamond traceability foremost in its jewellery supply chain scrutiny. Wal-Mart aims to market products which are known to be both socially and environmentally responsible.
In keeping with its life cycle approach to the stewardship of its products, Rio Tinto is developing a marine stewardship strategy related to the transport of its products to market, focused on the possible environmental impacts arising from Rio Tinto's port and shipping activities. This approach improves our product credentials as it takes our responsibility beyond the "mine gate" to the customer.
In 2008, Rio Tinto was invited into a new partnership with the recently established World Ocean Council, the only cross sectoral international organisation focusing on the ocean environment. Its vision is "a healthy and productive global ocean and its sustainable use, development and stewardship by a responsible ocean business community".
To protect its European markets, Rio Tinto implemented a proactive programme to ensure compliance with the European Union REACH legislation (regulation concerning the Registration, Evaluation, Authorisation and restriction of Chemicals) that went into effect on 1 June 2007. Actions were taken to ensure that all Rio Tinto products manufactured or imported into Europe as well as all substances used at business units were pre-registered by the deadline of 1 December 2008.
