TY - JOUR

T1 - Managing Supplier Requirements with HSE Accounting

T2 - The Case of the Mechanical Engineering Company Bisma Jaya, Indonesia

AU - Schaltegger, Stefan

AU - Herzig, Christian

PY - 2011

Y1 - 2011

N2 - As recent disasters in the offshore petroleum and other industries illustrate, managing HSE isparticularly relevant for companies operating in high risk industrial sectors. HSE managementsystems support companies in minimising adverse health effects, injuries and environmentaldamages as well as in complying with legislation, standards and stakeholder expectations. Keyelements are risk assessment and control through implementation of preventive and protectivemeasures, the preparation of emergency situations and investigation of accidents. HSE managementsystems have also become a common element of supply chain audits and management. Toincrease transparency in their supply chains and to reduce risks, large companies aim at aligningcompliance of suppliers with their health, safety and environment (HSE) goals and policy.This paper shows with the case of Bisma Jaya, an Indonesian mechanical engineering company,how accounting for HSE can support small and medium sized suppliers to meet the requirementsof large international customers. This paper proposes a framework for HSE managementaccounting and examines the use of management accounting to improve the HSE performanceof an Indonesian company as a response to customer audit requirements. The companyis a supplier of a large oil company and seeks for effective and efficient ways of HSE improvement.The paper unfolds benefits and limitations of narrow efficiency-oriented responsesto rating systems and audits and highlights that efficiency considerations in HSE managementare only partially useful and require complementing effectiveness considerations on HSE performance. Copyright © www.iiste.org

AB - As recent disasters in the offshore petroleum and other industries illustrate, managing HSE isparticularly relevant for companies operating in high risk industrial sectors. HSE managementsystems support companies in minimising adverse health effects, injuries and environmentaldamages as well as in complying with legislation, standards and stakeholder expectations. Keyelements are risk assessment and control through implementation of preventive and protectivemeasures, the preparation of emergency situations and investigation of accidents. HSE managementsystems have also become a common element of supply chain audits and management. Toincrease transparency in their supply chains and to reduce risks, large companies aim at aligningcompliance of suppliers with their health, safety and environment (HSE) goals and policy.This paper shows with the case of Bisma Jaya, an Indonesian mechanical engineering company,how accounting for HSE can support small and medium sized suppliers to meet the requirementsof large international customers. This paper proposes a framework for HSE managementaccounting and examines the use of management accounting to improve the HSE performanceof an Indonesian company as a response to customer audit requirements. The companyis a supplier of a large oil company and seeks for effective and efficient ways of HSE improvement.The paper unfolds benefits and limitations of narrow efficiency-oriented responsesto rating systems and audits and highlights that efficiency considerations in HSE managementare only partially useful and require complementing effectiveness considerations on HSE performance. Copyright © www.iiste.org

KW - Sustainability sciences, Management & Economics

KW - Management Accounting

KW - HEALTH

KW - savety

KW - Environment

KW - Performance

KW - Supply Chain

KW - Indonesia

M3 - Journal articles

VL - 5

SP - 82

EP - 105

JO - Social and Environmental Accountability Journal

JF - Social and Environmental Accountability Journal

SN - 0969-160X

IS - 1/2

ER -