THE SUPPLY CHAIN CHALLENGE by Heather Henshaw
We are what we consume and therefore we have a right and obligation to know what we are purchasing. One aspect of this, which is sometimes under-emphasised or ignored, is the length of and conditions in the ‘supply chain’ – the sequence of processes involved in the production and distribution of a commodity. An important consideration is globalisation and mutuality. “It really boils down to this: that all life is interrelated……. and before you finish eating breakfast in the morning, you’ve depended on more than half the world.” (Martin Luther King, 1967). The ethical side of this relationship is also highlighted by a decades old team game: ‘Banana Split’. It’s simple and you can try this at home!. You take the price of one banana – say 15 denari (unrealistically expensive but a useful number). Each member of the team represents a different part of the process: banana worker, plantation owner, shipper, importer/ripener, supermarket buyer. Each puts the case for what part of the total they should receive for their work. In my experience, this almost always results in group members coming to some reasonable share for everyone (which is far removed from the actual reality as shown in the breakdown below).
So, if we are interested in this inter-dependence, how do we ensure that we have the best possible information about what we produce or buy?
As consumers, we already have a good amount of information about products and services. This includes technical and health and safety standards, safety guidelines, sell by dates, country of origin, clear advice about usage, disclaimers, lists of ingredients, guarantees, and freedom of information laws. Much of this labelling and/or product and services information is based on law, developed over time and often through public pressure. For producers, businesses and public institutions, there is the desire to be both financially efficient or successful and publically reputable and accountable. For some, there is an additional focus, for publicity and/or principle, on social responsibility and public service
However, we do not yet have sufficient information to allow us to make the best decisions: what is most qualitative, ethical, sustainable and satisfying within budget. What we need are purchasing information ‘tools’, which lead to greater public sensitivity, positive corporate responsibility, alternative business models, and appropriate, supportive changes in the regulatory framework by policy makers.
So, to make this happen, we have another inter-related chain, which might include researchers, investigative journalists, business leaders including social enterprise organizations, policy makers and consumers. This is an exciting mix with great potential for mutual profitability.
Firstly, high quality researchers and research organizations are crucial for the provision of reliable, in-depth and accessible information, and important for influencing opinion and policy. They could create, with wide consultation, a set of ethical ranking criteria to complement the more conventional standards. These might include environmental impact, animal usage and welfare, human and workers’ rights, transparency, political influence or social inclusion. This would provide data for a ranking system. The next step would be to identify commodities or areas – for example, supermarkets, insurance, shampoo, electricity, mobile phones; then provide a profile for those companies which produce or sell them and follow this by ranking the companies from best to worst. This data could be publicised regularly, perhaps in magazine or in on-line journal form. Immediately, the consumer has choice, good practice is promoted, and there is reliable material for public campaigning and policy change.
This may be complicated and controversial. Take the tobacco industry, an important source of income for many in Macedonia. Who funds and carries out research into this industry? Are researchers independent? What is the balance between economies, health, national policy and social environment? Would research information be used just to increase sales, or someone’s power, or to promote broader ethical issues? Such tools have to be used carefully.
Secondly, this is where journalists may play an important part. They can use the research in independent, investigative journalism and to raise public awareness. They could promote specific campaigns which might result in better access to information or change of business or institutional practice. They could join with researchers to develop their own journal/on-line portal or e-forum to focus on such issues, or develop ethical consumer sections within existing publications. In the UK, the Ethical Consumer magazine or the Lifestyle section of The Guardian newspaper are excellent models.
Thirdly, the business community, including social enterprise, is vital to changing the way we consume. They could commit to a business strategy which includes consideration of ethical issues, in both their internal operation and for their suppliers. They could ensure procurement policies take into account wider issues and not just cheapest cost. They could provide open reporting which is able to explain publically what happens in each part of their business, including all parts of the supply chain. They could demonstrate corporate responsibility by having more inclusive HR policies, and ensuring non-discrimination and social inclusion. They could sign up to and promote ethical standards and take part actively in their development, and use them to promote their own business.
Many companies are not interested, but many are and fully understand the benefits of social responsibility. As Jim Sinegal, CEO of COSCO says: “Paying your employees well is not only the right thing to do but it makes for good business.” In 2017, the UK Living Wage Employer Foundation, which accredits companies who pay ‘living’ wages, published research from Cardiff University which showed that 93% of such accredited employers had gained business, 58% had improved staff motivation (78% for organisations with 500+ staff) and 86% had enhanced their general reputation.
Fourthly, national and local public bodies and policy makers must play their part in creating an appropriate, operative framework which enables such business and consumer practices. They could consider the endorsement of new ethical standards and ensure that companies are held to account for their business conduct, both in Macedonia and abroad. Crucially, they could review their own purchasing and procurement practice to ensure that it is transparent and incorporates wider issues. They could work towards being models of good HR practice, including offering opportunities for social responsibility eg employees being mentors, internship opportunities or employment for people from marginalized groups.
But finally, it is all of us, as consumers of one sort or another who are perhaps the strongest link in the chain. We can change our personal (or organizational) mindset and take practical action, with or without legal enforcement. We can check on what we are buying and be more sceptical about self-centred advertising. We can make more ethical choices wherever possible. We can even influence company behaviour and national policy by putting pressure on businesses or policy makers; and we can reward good companies with our business. We are the strongest link.
*Breakdown: Banana worker 0.5d. Plantation owner 2.5d. Shipper 2.0d. Importer and ripener 3.5d. Supermarket 6.5d. TOTAL 15 denari.
