SUPPLIERS

At both Group and business unit level we work with many different suppliers. It is vital that we show consistency across the Group in the way we manage our relationship with all our suppliers. Here we outline some of the steps we have taken in 2008 to improve our procurement processes.

Developing a Group-wide procurement policy

We recognise that our procurement activities have an impact on the environment and the wider community. So it is important that they not only reflect our values as a company but also consider ethical implications, security of supply, future costs, efficiency savings and local legislation.

In 2008, to help us manage all these considerations, we developed our first Group-wide procurement policy. This commits the Group and our employees to:

• Act legally and with integrity at all times to safeguard our employees, resources, and tangible and intangible assets - particularly our reputation
• Create and maintain a trust-based and inclusive internal culture in which bribery and corruption are not tolerated
• Conduct all business relationships in an ethical and lawful manner
• Co-operate fully with law enforcement and regulators locally within the bounds of local legislation.

In addition to these commitments, the policy outlines specific expectations from our suppliers relating to human rights, child and forced labour, environmental impact and ethical standards. In 2009 this Group-wide policy will be used to help ensure we have a consistent approach in all our supplier relationships.

An illustration of the difference we can make through our procurement is the Black Economic Empowerment (BEE) programme. This programme was launched by the South African government in 1994 to redress the inequalities of apartheid by giving disadvantaged groups economic opportunities previously not available to them. BEE is intended to transform the economy so that it better reflects the country's demographic make-up. It includes measures such as employment equity, skills development, ownership, management, socio-economic development and preferential procurement.

In accordance with the South African Financial Sector Charter, our South African businesses are committed to using BEE partners in their procurement. This commitment is set out in a joint procurement policy that covers Old Mutual South Africa, Nedbank and Mutual & Federal. Nedbank, for example, has a dedicated BEE Procurement Management unit in its central Group Procurement area. This unit sets the framework rules for BEE procurement based on Nedbank's agreed Procurement Policy, and engages all parts of the business in achieving its BEE goals and targets.

Developing strong relationships with suppliers

Making sure we have strong relationships with our suppliers is important for us, as it ensures we have a reliable, high-quality and fairly priced source of goods and services. If these relationships benefit our suppliers as well as us they will grow and thrive.

One example of how we do this is Nedbank's regular supplier forums. During 2008 we used these to highlight issues and discuss potential solutions.

As part of our development as a Group we plan in 2009 to introduce more integrated Group-wide processes that foster greater feedback from our supply chain. This will help us improve the way we work with suppliers and increase the overall efficiency of the business.