fiona gooch presentation

8/14/2019 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 [email protected],

www.corporatejustice.org

Contact: Virginie Giarmana,[email protected]

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