fiona gooch presentation
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MultinationalCompanies Impacts
on DevelopingCountries
Prague
20 Oct 2006
Fiona Gooch, Traidcraft
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Overview
Traidcraft
Impacts Commercial Companies
have on Vulnerable people International Supply chains
Responsible Purchasing Initiative
European Coalition for Corporate
Justice
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Established 1979
Values driven Social Enterprise
Leading UK Fair Trade organisation
1000 Agricultural, textiles, & home interiors
products
Buy from ~ 100 producer groups in Africa,Buy from ~ 100 producer groups in Africa,
Asia & South AmericaAsia & South America
Turnover >16m
1993 Initiator of corporate social reporting
Traidcraft Plc
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Traidcrafts Social Accounts
www.traidcraft.co.ukwww.traidcraft.co.uk
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Two sides of Traidcraft
A business with
development
objectives:
Traidcraft plc
A development
NGO specialising
in business:
Traidcraft
Exchange
Small enterprise developmentFacilitate market access
Policy work to improve impact of
trade on the poorest in developingcountries
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Question to YOU
Are commercial companies
- reducing poverty indeveloping countries? or
- increasingpoverty/vulnerability?
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uropean ompan esImpact on Poor People in
Developing Countries Sell products to poor people e.g. drugs,
seeds, baby milk
Poor people are neighbours of EUcompanies e.g. Coca Cola in India, Shell
in Nigeria
Employ poor people e.g. Unilever
(factories), AngloAmerican (mining) Poor people work/supply EU companies
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Examples Foreign Direct Investment in developing
countries has increased 6-fold over 10years.
6 companies dominate ~ 70% world tradein agricultural commodities
1 company, Cargill controls 80% globalgrain distribution
. . . . . . Clearly private sector dominance has
development implications
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Companies Impact on
Lives
Economiccash flow, market
dominance
Social
employees, communities,exclusion
Environmental
resource use, waste,water, emissions
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Examples of negative
impacts on poverty ininternational supply
chains.
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Vulnerable workers - Chile
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Family Impacts of Forced
overtime in Kenya
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Distribution of 1 retail value of
bananas in the supply chain
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Pushing Risks Down the Supply Chain
Retailers & brands push for:
- lower prices from producers
- fast and flexible production
- high technical & quality standards
- better labour conditions but without
a long-term commitment
Producers, as employers:
- hire women & migrants
- use short-term contracts & evade benefits
- put workers under excessive pressure
- undermine organising
- hide labour rights violations
Precariously employed workers:
- insecure on contracts with few benefits
- exhausted by long hours & high targets- undermined in organising for their rights
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EU Food Supply Chain Bottleneck
Consumers: 160,000,000
Customers: 89,000,000
Outlets: 170,000
Supermarket formats: 600Buying desks: 110
Manufacturers: 8,600
Semi-manufacturers: 80,000
Suppliers: 160,000
Farmers/producers: 3,200,000
The Supply Chain Bottleneck in Europe
Source: Grievink (2003)
POWER
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Concentration in Banana supply chain
from Latin America & Caribbean to UK
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Responsible Purchasing
Project CTM, Italy
IDEAS, Spain
Oxfam Wereldwinkels, Belgium
Traidcraft, UK
EU funded project 2005 - now
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Responsible Purchasing 4 case study sectors
Business case
1st steps for companies Indicators to monitor
Buying
Public policy options
19
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Our learning? Power Imbalance in supply chains
Limited safe-guards for most vulnerable
Lack ofbusiness accountability/responsibility forImpact
Gaps in norms set for business behaviour
Existing norms (e.g. ILO) ignored
Lack of transparency of business relations/impact
Inability for impacted 3rd parties to holdcompanies to account
EU Public policy response is voluntary CorporateSocial Responsibility . But insufficient
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Why Government action
needed? Harmful companies privatecompanies (Top Shop), slow(Walmart, Lidl), sick companies
Trends - Better, Cheaper, Faster
Market dominance -> Bullysuppliers
CSR/Ethical trade commitmentslimited/harmful impact
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Backfiring on social objectives ...
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Collaboration is needed
Change needed at EU & national
level
Any organisations actions ALONEare ignored
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European Coalition for
Corporate Justice (ECCJ) civil society organisations from
across Europe.
Ourvision is of a sustainable worldin which corporations drive for
profit is balanced by the interest of
society at large and respects human,social and environmental rights.
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What ECCJ does:
-co-operation amongst NGOs
-Influence Corporate Justice policies of
the EU and its member states.
-Inform the general public
-Present ajoint civil society vision
-implementation of EU policies on
Corporate Justice by the member states
-Build capacity
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5 PRINCIPLES 1. References to international standards 2. Stakeholders rights. Companies and
their directors can be held accountable.
3. Responsibility throughout the supplychain:
4. Reporting of environmental, socialimpacts; & Lobbying. Backed up withIndependent monitoring and verification
5. A leading role for public authorities
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Thanks
Any questions on presentation?
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For more information
www.responsible-purchasing.org
www.traidcraft.org fionag@traidcraft.org,
www.corporatejustice.org
Contact: Virginie Giarmana,Coordinatorinfo@corporatejustice.org
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