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

With a clear objective of increasing our recycling and diversion rates, during FY19 we consolidated our supplier base and appointed a national waste services management provider. All of the providers reviewed during the supplier selection process were screened for Sustainability and human rights issues to ensure that the requirements in our robust policies and Sustainable Procurement Policy were met. 

 

We have also included additional clauses related to subcontracting practices, supplier audits and payment of fair wages in the contracts of the newly appointed suppliers, with the aim of minimising any potential risks of labour exploitation in our supply chain. 

We have now commenced working with our new provider to achieve recycling and diversion outcomes through innovative waste management solutions and improved retailer and community engagement and education.

During FY18, we engaged an external consultant to conduct a high-level assessment of inherent sustainability risks, including those relating to modern slavery, in our supply chain to gain a deeper understanding and identify key categories for immediate focus. 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.  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.

During FY19, we once again engaged an external consultant to complete annual compliance audits of our cleaning and security providers. The audit findings were minimal with no major issues identified. However, some minor administration process improvements were recommended and are now being implemented. These improvements will also help our suppliers ensure best practices and prepare for the Modern Slavery Act.

Addressing Modern Slavery and broader sustainability risks in our supply chain

The Modern Slavery Act 2018 (the Act) requires organisations with revenues above $100 million to disclose their exposure to modern slavery risks in their supply chain and operations, as well as their approach to managing those risks.

Vicinity has had a program in place to manage broader sustainability risks in its supply chain for a number of years, having set clear expectations of our suppliers with regards to their Environmental, Social and Governance (ESG) practices via our Supplier Sustainability Questionnaire, as well as our Supplier Sustainability Code of Practice, Sustainable Procurement Policy and Human Rights Policy.

We have continued to progress this program more recently, with a particular focus on modern slavery. 

In FY19 we continued our work in this space and conducted a review of Vicinity’s procurement processes to identify any potential gaps and opportunities to further embed and strengthen our ability to identify and manage modern slavery and broader sustainability risks in Vicinity’s supply chain.  This has provided us with a clear roadmap of initiatives for implementation over time to ensure we are appropriately managing modern slavery and broader ESG risk in our supply chain. 

The Property Council of Australia has recently launched a modern slavery supplier questionnaire platform, developed via a consortium of property companies of which Vicinity was a founding member. This approach aims to achieve greater reporting transparency, consistency and a more efficient process for suppliers to the industry.  Vicinity has invited its key suppliers across its highest risk categories to disclose information on their labour management practices via the tool, which will allow us to extend our understanding of modern slavery risk in our supply chain and identify areas for further supplier engagement.

 

Case Study: Cleaning Accountability Framework Pilot

The Cleaning Accountability Framework (CAF) is an initiative seeking to improve labour standards in the cleaning industry in Australia. With high numbers of vulnerable employees who may not be able to advocate for their rights, cleaning can be an area of risk for illegal and unethical labour practices.

CAF sets standards for wages and labour conditions, tax and super, and responsible contracting which are independently audited to verify these criteria are being met for cleaning services at a specific location. CAF audits compliance within both the contracting company and the cleaning services provider, ensuring the company is also accountable for the standards being met. 

Vicinity was one of the first retail property companies to participate in CAF’s pilot program. We are proud that in March 2019 Northland Shopping Centre (Vic), in collaboration with our incumbent cleaning services provider, achieved the 3 Star

Standard certification across six areas of compliance: Labour; Responsible Contracting; Workplace Health and Safety; Financial Viability; Worker Engagement and Remediation.

In order to maintain our 3 Star Standard certification over the next three years, both Vicinity and our cleaning services provider must meet six monthly compliance checks and annual audits including: fair work conditions; payslip and timesheet checks; worker health and safety; induction and training and employee checks.

We continue to evaluate the CAF framework and remain an active member of the CAF Advisory group providing expertise on application in the retail sector.

Supplier performance

Supplier Relationship Management Framework is the key platform through which we manage relationships with our suppliers in accordance with our contract management strategy.

The Supplier Relationship Management Framework  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 or diversity and inclusion focus areas. 

During FY19, we continued to support social enterprises to meet our procurement needs, bringing our cumulative total to $2.9 million spent in FY18 and FY19.

We currently work with:

  • YMCA Rebuild in Victoria, who employ youth out of custody and support their integration back into the community and workforce; 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, disadvantaged youth and Indigenous businesses in their operations and supply chains.

To support our Reconciliation efforts and Reconciliation Action Plan commitments (RAP) we’ve expanded our Indigenous procurement program. We increased our Indigenous procurement from $134,000 in FY18 to $489,000 in FY19.

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

YMCA Rebuild is a social enterprise that helps rehabilitate at-risk youth leaving correctional facilities by providing training and employment skills to support their integration into the workforce.

YMCA ReBuild help young people learn new skills and provide supervised on the job training and support to securing regular employment. In FY8 and FY19 Vicinity spent almost $600,000 with YMCA Rebuild in maintenance, landscaping and repairs.

Over the past twelve months YMCA ReBuild provided 120 young people with the skills they need to gain employment on release from prison into the community and 30 young men and women with direct employment opportunities.

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

"Thanks to our partnership, with Vicinity, over the past year we have provided 21 young people with training and work experience and 7 young people have secured ongoing employment. Most importantly, the young people we work with have significantly lower rates of re-offending and successfully rejoining the community." Damien Carmody, YMCA ReBuild Manager

Case study: Supporting Indigenous employment with Wilco Electrical

We are proud of our growing relationship with Wilco Electrical, a Supply Nation certified Indigenous-owned business.

Around 2 years ago, Vicinity started working with Wilco Electrical who now provide electrical maintenance for all our centres in Western Australia as well as completing project work such as energy efficiency upgrades and ongoing repairs and maintenance. Not only are Wilco proudly Indigenous owned, but they provide training and apprenticeships to young Aboriginals in Western Australia with three 4 year in-house electrical apprenticeships as a direct result of working with Vicinity.

Frank Mitchell, Director of Wilco Electrical said,

“A big thank you to Vicinity, your support has been a major contributor to our success and our ability to provide training, skills and work experience to local Aboriginals in WA. Together with Vicinity, we’re looking forward to developing even more pathways for Aboriginal people. We encourage other businesses to follow Vicinity’s lead and try Supply Nation suppliers like Wilco to help create more employment opportunities for Indigenous Australians”.