IMPA ACT 101

The IMPA ACT team explores the what, why and how of IMPA ACT, the shipping industry’s preferred responsible supply chain management system

What is IMPA ACT?

Suppliers are constantly bombarded with tens of codes of conduct from all their customers and have to spend resources in ensuring compliance with each one. In the long run, having to spend so much time on evaluating new codes may unfortunately result in their products’ prices spiking. So what if the marine procurement sector actually had at its disposal a model code of conduct that brings together all the latest internationally-endorsed principles on human and labour rights, environment and anti-corruption, and, in time, it would be the only code that suppliers would have to sign?

This is what IMPA ACT, a pioneering responsible supply chain management system for the global shipping industry, brings to the international marine procurement sector. Companies that subscribe receive a well-rounded system that helps them become sustainable in their practices and streamline the implementation of international soft-law standards. This is what the IMPA ACT programme offers to all its members:.

1. The IMPA ACT Supplier Code of Conduct, a model code of conduct which can be used by any company wanting to commit internally to mitigating its social, environmental and economic impacts, as well as  extend these expectations from its value chain. What makes it different is its emphasis on process requirements instead of performance expectations.
2. The IMPA ACT Private Members’ Area, offering purchaser and supplier members:
   • A Toolbox that breaks down the IMPA ACT implementation phase in six simple steps, from committing internally to the Supplier Code of Conduct to partnering with and auditing your suppliers to check their compliance with the Code. Each step comes with guidance, samples and templates to streamline the process.
   • A Knowledge Centre that contains educational material on responsible supply chain management, industry updates, as well as reports, statistics and country- and sector-risk assessments.

How does IMPA ACT work in practice?

We often hear about companies adopting a command-and-control approach towards their suppliers. The latter are given a new code of conduct and are told to comply soon with its requirements or else the buyer will not be entering into further business with them. 

The IMPA ACT programme, however, is different than this, as it centres around a collaborative approach whereby the company knows and shows that it respects human and labour rights, environment and anti-corruption principles through its systems. 

IMPA ACT works for both purchasers and suppliers in about the same way. It is focused on a six-step process that both purchasers and suppliers have to undertake while implementing the IMPA ACT Supplier Code of Conduct.

Firstly, both purchasers and suppliers commit to internally implement the IMPA ACT Supplier Code of Conduct and develop:

• a public policy commitment to respecting human and labour rights as well as environmental and anti-corruption principles,
• a continuous process of due diligence during which companies assess their risks and track the integration of the findings into decision-making, and
• a remediation process for remedying the harm suffered by victims of the companies’ misconduct.

Secondly, companies, whether ship owners, operators or suppliers, extend the requirements of the IMPA ACT Supplier Code of Conduct to all their suppliers and identify, based on IMPA ACT self-assessment questionnaires, those higher-risk ones that need to work further on their sustainability practice. They will establish partnerships with them and begin a collaborative relationship towards establishing compliance with the IMPA ACT Supplier Code of Conduct by creating policy commitments, due-diligence and remediation systems. As part of the process, parties regularly exchange best practice and build on their new experiences. Finally, suppliers undertake a final evaluation or an audit whereby, if successful, become IMPA ACT preferred suppliers and join a common database of suppliers; this way, purchasers can benefit from their peers’ assessment of joint suppliers. The IMPA ACT process does not end with the audit, as suppliers are encouraged to continue reporting regularly on their  CSR progress.

While suppliers are welcome to join IMPA ACT as members and begin the work on implementing the IMPA ACT Supplier Code of Conduct internally and within their base of sub-suppliers, it is easier for them to partner with one of their customers as part of the process. This is because a central feature of the IMPA ACT programme is collaboration. To promote this, the IMPA ACT website promotes suppliers who have joined IMPA ACT and advertises that they are looking for a partner.

IMPA ACT aims to be a two-way process, with the buyer and supplier simultaneously establishing internal systems that mitigate adverse impacts on the four areas of fundamental responsibility: human rights, labour standards, environmental principles and anti-corruption standards. It is believed to consolidate the business relationship between the parties and build trust between them. 

To start the programme, you can either be a ship owner or a ship operator that has decided to begin the IMPA ACT journey, or a marine supplier that has decided to begin the journey on their own or following a customer’s offer to partner. 

The IMPA ACT six-step process

Step One: Committing 

• What is it about?
  • You begin the process by walking the walk of sustainability. In other words, you do not start expecting more from your suppliers before taking a look in the mirror.
• What to do?
  • Discuss with senior management about making your commitment to the IMPA ACT Supplier Code of Conduct official.
  • Put together a public policy statement that is aligned with the principles of the Code and displays your company’s dedication to respecting human rights, anti-corruption principles and the environment, both internally and within its wider value chain.
  • Ensure that the policy is signed by senior management.
• Need help?
  • The IMPA ACT Members’ Area will offer you resources to learn more about CSR and how to start the journey to responsible supply chain management. You will also learn how to write a compliant policy commitment, as well as consult best practice examples from the industry.

Step Two: Informing Suppliers

• What is it about?
  • This step is about extending expectations to your supply chain, but making it clear that you’re taking a collaborative approach. You will learn at the same time as your suppliers and you will reap the benefits of the programme simultaneously.
• What to do?
  • Prepare the supplier engagement period by introducing the IMPA ACT Supplier Code of Conduct into the legal documents that govern your relationship to suppliers, such as contracts and general terms of purchase. 
  • Write to your suppliers to inform them that they will be expected to work from now on with the IMPA ACT Supplier Code of Conduct, making sure to include relevant information on the programme and offer your support in answering questions and identifying its benefits.
• Need help?
  • The IMPA ACT Members’ Area will offer an array of drafts for introducing the Supplier Code of Conduct in contracts and templates for letters that inform suppliers about the programme.

Step Three: Choosing and Engaging

• What is it about?
  • This step is about choosing some of your suppliers whom you should engage further in the programme. While it would be ideal to engage all, it is impossible as you would not have the resources to work efficiently with all at the same time.
• What to do?
  • Using criteria such as spend, dependency and frequency of use, select a handful of suppliers whom you can engage further. 
  • Write to the selected ones and send them a supplier self-assessment survey that is designed to assess their current systems for managing adverse social, environmental and anti-corruption impacts; you will need to get to know them better.
• Need help?
  • The IMPA ACT Members’ Area will offer you supplier selection tools to assist you in choosing suppliers based on non-discriminatory criteria, a comprehensive self-assessment survey to send them for completion and drafts for engagement letters.

Step Four: Partnering

• What is it about?
  • This step is about understanding that, in order to mitigate your risks, you will have to work with those suppliers who are not as versed in CSR, so as to slowly bring them in the ‘no-risk’ zone.
• What to do?
  • Assess your suppliers’ filled-in surveys and decide which suppliers are low-risk (strong CSR practice) and high-risk (a substantial lack of systems for managing their adverse impacts on human rights, environment and anti-corruption). 
  • Write to the low-risk ones and recommend any improvements; contact IMPA ACT to offer them ‘Preferred Supplier’ status. 
  • Write to high-risk suppliers and offer them a partnership on their way to compliance with the IMPA ACT Supplier Code of Conduct.
• Need help?
  • The IMPA ACT Members’ Area will offer drafts for cover letters, tools for collaboration and progress trackers.

Step Five: Implementing

• What is it about?
  • Step five is about developing the partnership and working in tandem with your partnered suppliers towards implementing the necessary systems of mitigation and remediation.
• What to do?
  • Collaborate with your partnered suppliers to implement the Code and, where needed, use the assistance of the CSR professionals in your company. 
  • Ensure that milestones are set and that progress is sought at regular intervals, making sure to consider each supplier’s wider context, such as company size, sector and capacity. 
  • Start preparing for “socially auditing” the supplier.
• Need help?
  • The IMPA ACT Members’ Area will offer a predefined action plan for suppliers and a collaboration tool to use for CSR performance tracking.

Step Six: Auditing

• What is it about?
  • Step six is about “the exam at the end of the course”. You test your suppliers to see whether they have achieved compliance with the IMPA ACT Supplier Code of Conduct and if they can join the list of preferred suppliers. 
• What to do?
  • Conduct the final evaluation once the supplier informs they are ready. This can take the form of an extensive site visit or an assessment. 
  • If the audit is successful, inform the supplier and inform the IMPA ACT team who will offer the supplier ‘Preferred Status’. 
  • If the audit is unsuccessful, inform the supplier and continue engagement until they become compliant. 
  • Agree with the successfully-audited suppliers on a yearly communication of CSR progress.
• Need help?
  • The IMPA ACT Members’ Area will offer guidance on conducting the final audit, tools to assess suppliers’ potential on getting approved and drafts for communication letters.

Keen to find out more about IMPA ACT and how it can help you ease into the process of responsible supply chain management? Visit www.impa-act.org to learn more or get in touch with the IMPA ACT team at info@impa-act.org. Please note this article is an extract of IMPA ACT: The Marine Procurement Professional’s Guide to Responsible Supply Chain Management.