Adnoc Approved ICV Audit

ICV CERTIFICATION Support in UAE

Thousands of companies may be affected by Adnoc’s in-country value programme

Dubai: Abu Dhabi National Oil Company’s (Adnoc) sweeping attempt to rank every oil company based on how much value they provide to the UAE is expected to have far-reaching consequences, experts say.

Last November, Adnoc announced that it would begin rating the companies that bid for its business on how much value they bring to the UAE.

All the money spent by Adnoc’s suppliers in the UAE, and any money that contributes towards the UAE, is calculated and considered in-country value, Adnoc, in a document seen by Gulf News, outlining the process by which suppliers would receive their in-country value (ICV AUDIT IN UAE IN UAE) score.

Key indicators of a company’s contribution to the UAE’s economy include: How many Emiratis the company employs, how much of its manufacturing is done locally, and how many of its own suppliers are based in the UAE.

High scores in these categories will contribute to an overall higher ICV AUDIT IN UAE score, which will in turn increase the company’s chances of winning business with Adnoc.

The government-owned oil company’s objective, according to its guidelines, is to boost Emiratisation, and drive gross domestic product (GDP) diversification through the through the sourcing of more goods and services from within the UAE.

Companies will be tasked with getting recertified annually, while Adnoc says that any company found to be wilfully providing inaccurate figures may be permanently banned from participating in all of the company’s future tenders.

One of these knock on effects is a boom in business for the professional services firms selected to audit such companies.

 “Not only are direct suppliers to Adnoc required to prepare and have accredited their own ICV AUDIT IN UAE scores, the calculation requires them to include the accredited ICV AUDIT IN UAE scores of their own suppliers and sub-contractors,” they told Gulf News.

This means that for a major oil company to receive their complete ICV AUDIT IN UAEscore, they are required to collate the ICV AUDIT IN UAE scores of all their suppliers, who in turn must receive the ICV AUDIT IN UAE scores of their suppliers, and so on.

Continuing indefinitely, this creates a trickle-down effect through the supply lines to even the smallest firms, who will be forced to achieve an ICV AUDIT IN UAEscore if they wish to continue doing business with any company even indirectly working with Adnoc.

“Because of this cascading effect, it is difficult to estimate the total number of companies,” said Damian Regan, PwC’s Middle East trust and transparency leader, and a member of the Adnoc ICV AUDIT IN UAE certification panel. Some in the oil industry estimate that there are upwards of 20,000 companies that will be impacted.

For Regan, this will ultimately contribute positively to the UAE’s economy.

“Adnoc has created an incredibly ambitious program that is seeking to deliver a real impact on the UAE economy. Although we are only in the early days of the program, we are already seeing Adnoc suppliers taking this program very seriously,” he said.

Having spoken to a number of companies, both direct and indirect suppliers to the energy giant, Regan said that many companies “recognise(d) the importance of this programme and the need to improve their ICV AUDIT IN UAEscores.”

They are already considering how to maximise their future scores, he added.

“To do so will mean that they will need to increase investment in local talent, choose local suppliers and subcontracts. This undoubtedly will have an impact on the economy by encouraging business decisions on investment and supply chain to be UAE focused and will increase the training, development and employment opportunities for Emiratis.”

Some are strongly opposed to the move, however.

One of the two people called pointed to the difficulty of logging every subcontractors’ score in to their own, and the problematic nature of choosing a company based on an ICV AUDIT IN UAE score, and not the strength of their work.

The person also said Adnoc were considering making amendments to the programme to ease the process, after widespread complaints from the industry, including a large consortium of Chinese firms.

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