Our supply chain

At Vicinity, we seek to build long term relationships with partners who share our values and commitment to sustainability.

Vicinity engages a large number of suppliers to provide goods and services for our centres and corporate offices.

The majority of our total procurement spend goes towards operating our centres, for services such as waste management, cleaning, security, mechanical, landscaping and maintenance, vertical transport and essential services like energy, gas, heating and cooling, sewerage and water.

For our development projects and centre refurbishments, we engage builders, civil contractors, design consultants and tradesman. We also use information and telecommunication service providers and professional service consultants to service our offices and centres.

We recognise the need to reduce sustainability risks inherent in our supply chain and take an active approach to promote responsible practices with our suppliers. We also welcome the opportunity to proactively use our procurement decisions to drive positive outcomes in our local communities.

Assessing and addressing risks

Vicinity’s Procurement Standard serves as the overarching policy that governs the procurement of products and services by Vicinity and the ongoing management of supplier relationships. Promoting sustainable procurement is a key principle outlined in Vicinity’s Procurement Standard, to ensure that we apply the highest standards of business practices with regards to environmental, social and governance issues and that our suppliers understand our expectations of them.

Our Sustainable Procurement Policy outlines our commitment to build a responsible supply chain that creates a positive impact on local communities.  We expect our suppliers to demonstrate their own commitment to sustainability, and work with us to realise the objectives of our Sustainability strategy. Our expectations of suppliers are articulated in the Supplier Sustainability Code of Practice.

Our suppliers are selected through a rigorous procurement process that considers a number of elements, including relevant sustainability risks. We use a Supplier Sustainability Questionnaire to evaluate our suppliers on their management of material risks and impacts related to the services they provide, whether it’s environmental standards, human rights, fair wages and working conditions, governance or business ethics.

During FY18, Vicinity appointed six new suppliers, five for the provision of security services and one for washroom consumables, representing 12% of our total operational spend, and all of whom were evaluated for relevant environmental, labour and human rights risks, impacts and opportunities.

Furthermore, as part of our recent security services procurement process, we completed a comprehensive due diligence screening of shortlisted suppliers to understand potential labour-related risks. We have included additional clauses related to subcontracting practices, supplier audits and payment of fair wages in the contracts of the five newly appointed suppliers, with the aim of minimising any potential risks of labour exploitation in our supply chain. 

During FY18, we engaged an external consultant to conduct a high-level assessment of inherent sustainability risks in our supply chain. The assessment covered a range of risks including environmental, health and safety, human rights and corruption as they relate to each category of product or service we procure at all stages of their lifecycle. Additionally, we assessed Vicinity’s business exposure to the risk, as well as our opportunity to reduce the risks, in order to help us prioritise key categories for immediate focus. Priority categories identified for Vicinity included materials and services for our development projects, critical services for our shopping centre operations such as energy, security, cleaning and waste management, and procurement of marketing goods and giveaways.

Our response to Australia’s pending Modern Slavery legislation

In 2017, the Australian government announced its intention to introduce a new legislation in 2018 requiring organisations to disclose their exposure to modern slavery risks in their supply chain and operations, as well as their approach to managing those risks.

If passed, Vicinity will be required to comply with this legislation. We remain a strong supporter of the bill, having signed a joint letter indicating our support to the Prime Minister, and are committed to ensuring that we work with our industry and supply chain partners to address modern slavery and leverage our position to influence positive outcomes.

During FY18, Vicinity formed an internal working group comprising representatives from Compliance, Legal, Risk, National Procurement and Sustainability to better understand the implications of the proposed legislation and lead the development of a response plan. The group, as a first priority, identified the need to understand the inherent risk of modern slavery in our supply chain.

We conducted a high-level assessment of inherent sustainability risks in our supply chain, including human rights and modern slavery (detailed above). The assessment identified a number priority supplier categories for further investigation as part of our continued future program on addressing modern slavery and broader sustainability risks in our supply chain. These included sourcing of products and services associated with our development projects, as well as security, marketing goods and cleaning categories, which will be key focus for Vicinity moving forward.

Externally, Vicinity has been an active contributor to the Property Council of Australia’s Sustainability Roundtable, which is currently working to develop and implement an industry specific platform for capturing supplier information on modern slavery and broader sustainability practices, to drive efficiencies and ensure a consistent industry-wide approach.

Supplier performance

Vicinity’s Vendor Management Office (VMO) is the key platform through which we manage relationships with our suppliers in accordance with our contract management strategy.

The VMO gives our procurement and operations teams information and tools to guide meaningful conversations with our suppliers. The tools assist with better management of supplier

 

performance, response to issues that arise and provision of feedback on a regular basis.

It forms an important part of our commitment to build long-term relationships with our suppliers and create mutually beneficial outcomes for Vicinity, our suppliers and the communities in which we operate.   

Procurement through social and indigenous enterprises

With a portfolio of Vicinity’s scale and reach, we acknowledge our role as a large employer of service providers across Australia, generating significant economic activity through the operation of our centres.

Partnering with social enterprises gives us the opportunity to make a positive impact in local communities through our day to day operations.  Where possible, we partner with social enterprises working to alleviate social issues that are aligned with our own community investment focus areas.  However, this isn’t always possible, meaning that we partner with organisations working across a range of social areas.

During FY18, we significantly expanded our use of social enterprises to meet our procurement needs, increasing our spend from $300,000 in FY17 to $1.4 million in FY18.

We currently work with:

  • YMCA Rebuild in Victoria, who employ youth out of custody and support their integration back into the community and workforce,
  • Marist Youth Care in New South Wales and Queensland who facilitate employment opportunities for at risk youth, and
  • Activ Foundation in Western Australia, House With No Steps in New South Wales, and Orana Incorporated in South Australia who employ individuals with disabilities.

We also encourage our suppliers to engage social enterprises and disadvantaged youth in their operations and supply chains.

As a result of engaging social enterprises through our supply chain, we have provided nearly 33,000 hours of work for marginalised individuals in our communities across 57 of our centres.

 

With the launch of our Reflect Reconciliation Action Plan (RAP), our procurement program also expanded during FY18 to include Indigenous businesses, where we spent approximately $134,000 across four of our Western Australian centres, and provided nearly 3000 hours of work to Indigenous employees. As part of our RAP, we will identify further opportunities to procure through Indigenous businesses in the years ahead.

We believe this inclusive approach strengthens our communities and increases the local community’s connection with our centres, further driving the success of our business.

Case study: Making an impact with YMCA ReBuild

Vicinity’s partnership with YMCA ReBuild started as a small painting project at Emporium Melbourne in 2016.

It has now expanded to 15 shopping centres across Melbourne, providing a range of maintenance activities from painting to landscaping.

YMCA ReBuild is a social enterprise operating in Victoria that works with youth out of custody and supports their integration back into the community and workforce. It forms an important part of the not-for-profit organisation YMCA’s The Bridge Project. 

YMCA ReBuild provides young people with the chance to learn a new skill, receive supervised on the job training and find a pathway to regular employment. Young people participating in the program are heavily supported by YMCA along the way to give them the best chance of employment success.

Partnering with YMCA ReBuild to provide basic maintenance and landscaping services at our centres aligns with our community investment program focus on alleviating youth unemployment and disengagement in local communities. It is this strategic alignment that provides credibility and longevity to our partnership.

During FY18, Vicinity spent approximately $320,000 procuring maintenance services through YMCA Rebuild, which accounted for over 20% of Vicinity’s overall social procurement spend.

During FY18, we solidified our relationship by formalising a non-financial partnership with its parent organisation YMCA’s The Bridge Project. This partnership includes providing volunteering opportunities for Vicinity employees, direct employment of Bridge Project youth into appropriate roles within Vicinity and exploring opportunities to further expand our social procurement program. 

Vicinity Centres has become both a key commercial and community partner of YMCA ReBuild, offering the means for us to provide the skills and attributes that young people we work with need to take the next step in their lives. By engaging ReBuild Vicinity has not only been able to satisfy a range of normal operational needs, it has just as importantly made a discernible difference in the lives of the disadvantaged young people we work with.
Gary Sinclair, YMCA ReBuild Manager