4.3.4 Goods and Services Procured in Iceland

Relates to the following subgoals

8.1

Sustain per capita economic growth in accordance with national circumstances and, in particular, at least 7 per cent gross domestic product growth per annum in the least developed countries.

8.2

Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors.

Progress

Figure 1. The proportion of domestic goods and services in total procurement.

Becthel, Alcoa's contractor in building the Aluminum Smelter, reported that in 2005, 32,2% of their total procurement was domestic. Similar information was not available from contractors working on the hydro project.

Updated: March 19, 2024
Source: Alcoa Fjarðaál (2016), Landsvirkjun (2024), Bectel (2005)

Metrics, Targets and Monitoring Protocol

What is measured?

Percent of total goods and services (value in ISK) procured by Alcoa, Landsvirkjun and subcontractors in Iceland (Project effect: direct).

Monitoring Protocol

The financial departments of Fjarðaál and Landsvirkjun will collect this information during operation, and ask for data from contractors where possible.

Target

Alcoa, Landsvirkjun and contractors have a policy of taking the best offers when buying supplies. Therefore a target is not appropriate but data will be collected and reported

Possible countermeasures

Not applicable

Updated: July 18, 2016

Changes of indicator

The original metric was „ Percent of total goods and services (value in ISK) procured by Alcoa and Landsvirkjun and subcontractors in East Iceland and Iceland. In the third phase, the metric was changed to remove „East Iceland“from the indicator and metric. It is impractical to categorize East Iceland and Iceland procurement and challenging track.

This indicator was originally number 14.2. It was then named Quantity of Goods and Services Procured in East-Iceland and Nationally and can be found under that number in the project documents from 2005 and 2006.

The indicator number has been changed twice.

**Table 1.** Changes to name and number of indicator
Year	Nr.	Indicator name
2020	4.3.4	Goods and Services Procured in Iceland
2007	3.4	Goods and Services Procured in Iceland

Baseline

**Table 2.** Proportion of domestic goods and services in total procurement in the year 2007.
Alcoa Fjarðaál	Landsvirkjun
79%	75%

Rationale for Indicator Selection

The Fjardaál and Karankujar projects have the opportunity to have a significant positive effect on the Icelandic economy through the procurement of goods and services from local and national companies. Many supporting industries could experience growth through the development of the projects both during the construction and the operation phases. A stable economy will be one that does not have an over-reliance on one source for income. Monitoring the extent to which the projects contribute to the local and national economy will be useful in assessing the degree of reliance of supporting the business on Alcoa and Landsvirkjun.

From phase I/II report on indicators and baseline from April 2005