Posted in activism, agriculture, business, civil society, climate change, companies, CSR, deforestation, environment, global warming, Greenpeace, Indonesia, leadership, NGOs, Sinar Mas, stakeholder engagement, sustainability, Unilever, tagged Allanblackia, climate change, CSR, deforestation, global warming, Greenpeace, Indonesia, Palm Oil, Sinar Mas, stakeholder engagement, sustainability, Unilever on April 8, 2010|
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Palm Oil & Stakeholder Engagement: The Road To Nowhere?
Reuters reported that Unilever is considering buying Palm Oil from Greenpeace target Sinar Mas again. Not surprisingly, Greenpeace is asking Unilever to not go down this road as they just plain don’t trust Sinar Mas. A bit of background – Greenpeace accuses Sinar Mas (and their subsidiaries) of cutting down rainforests to plant more Palm Oil to keep up with the unstoppable appetite of large food companies (and others) – themselves trying to supply us consumers with those goods we perceive ‘we just cannot do without’. The fight between Greenpeace and Sinar Mas is interesting but three CSR and Sustainability issues stand out for me – apart from deforestation.
Firstly, why would Unilever even consider this? The Greenpeace targeting of Sinar Mas will not go away no matter what the independent auditors find. Independent audits have serious flaws (limited access, resources, links with local groups etc) that will make it easy for Greenpeace to shoot it down no matter what happens. Do Unilever really need Sinar Mas this badly that they are willing to take the brunt of a Greenpeace attack? Especially because Unilever said they might buy from Sinar Mas even if they don’t pass the audit – as long as Sinar Mas promises to clean up their act. Unilever is really playing a dangerous game with Greenpeace here. Greenpeace have highlighted the leadership role of Unilever in their campaign and all that goodwill will be flushed down the drain the minute they start buying from Sinar Mas again. I find it an odd decision and would love to know about the business pressures that made them decide this as that might help me understand the point of conflict between sustainability and business reality in this case. Whatever the case, I think the Unilever reputation will take a serious knock if they start buying from Sinar Mas again – no matter what the auditors have to say.
Secondly, and more in defense of Unilever, should responsible companies not put pressure on their suppliers to become more sustainable? Is Unilever not doing the right thing here? Instead of walking away completely, Unilever is using their influence over suppliers to force them to become more sustainable. That is what we ask companies to do – influence suppliers. The clothing, textile and footwear industry (and leaders such as Nike, Timberland and Levi’s) have used their influence to drive change in manufacturers. It’s not perfect but we can at least agree that it is so much better than the working conditions and human rights issues back in the 80s and 90s. Instead of attacking Unilever should Greenpeace (and other activists) not acknowledge that Unilever is trying to use their size for good?
Thirdly, why aren’t they talking to each other? Why isn’t Greenpeace more involved in the audit? Should Greenpeace not work with Unilever to define what that sustainability look like? It would be a breath of fresh air if Unilever and Greenpeace engaged before the Unilever decision to define what the audit should look like, where and what they should investigate and agree on a set of principles – including the independent role of Greenpeace. Instead of doing real stakeholder engagement on this Unilever and Sinar Mas had discussions and agreed on the principles and the auditors – leaving out key stakeholders in the process.
This just seems so unnecessary. Unilever is a good company doing some excellent work in sustainability – a good business with a good impact on development. And they’ve done some innovative work in stakeholder engagement with Oxfam and others. Greenpeace knows that and have said as much in the past. These two don’t need to fight. There are bigger fish to fry. It’s just such a missed opportunity.
(On a completely separate note. I wonder how the Unilever drive for Allanblackia is coming along. They had some high hopes for this tree as they claimed it was more environmentally friendly than Palm Oil and could be of even better use in soaps and spreads. Unilever has done some interesting work trying to make Allanblackia more economically viable. I just hope it doesn’t turn into another Palm Oil nightmare for this world. Early reports indicated that Allanblackia might be one key answer in getting us off our Palm Oil addiction but we’re still waiting.)
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Posted in activism, agriculture, business, commodities, companies, development, Fairtrade, global, marketing, Oxfam, trade, WTO, tagged agriculture, business, commodities, companies, Fairtrade, farmers, Oxfam, subsidies, trade, WTO on March 2, 2010|
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Most people know that I am not the biggest Fairtrade fan. Heck, just read My beef with Fairtrade for more of my rantings on Fairtrade. But Brendan May (good guy also in the sustainability field – his Twitter feed is bmay) made me think a bit more about Fairtrade. He had a series of Twitter arguments to tackle Fairtrade and some of the claims they make. Brendan made a few good arguments that highlighted some of the flaws of Fairtrade compared to other certification system and the seriously flawed misunderstood claims most consumers have around Fairtrade. Especially some of the marketing claims made by Fairtrade and the assumption by Fairtrade and their supporters that they are the best out there to help farmers. Show some hard facts please Fairtrade and less unsubstantiated claims. A premium is no reflection on the “wealth” of farmers – we need a bit more on agreeing on measurements and then do a comparative study.
Okay, so Fairtrade make claims they shouldn’t and push their luck on a few things such as helping the poorest farmers (no they don’t, only those organized in cooperatives), strong environmental claims (there are others out there with much better environmental criteria) etc. But there is one area where I believe Fairtrade is fundamentally different from anyone else out there. They might have forgotten this basic principle over the years – especially since they have grown so big and started operating more like a traditional business. The foundation of Fairtrade is one that is very different from any of the other certification schemes out there and one that asks a much more fundamental question about the world trade system than any other system… And it comes down to the premium that Fairtrade pays.
Why pay this premium? Why did they start off with this idea of a premium in the first place? The figure is so artificial so why have it in there in the first place? To answer this you have to start with the world trade system and everything that is wrong with it in the agricultural commodities field.
Activists like Oxfam (a Fairtrade founder and supporter) have long argued that the global trade system is one of imbalance. The rich nations in Europe and the US have all the freedom in the world to pretty much do what they want. More importantly, they subsidize their agricultural sector to the hilt. Corn, sugar – you name it and they subsidize it. Don’t argue that subsidies are gone – that is a technicality as these countries spend billions of dollars each year on agricultural support where semantics rule. Call it research support but anything over a few billion dollars ending up in the pockets of large commercial farmers are subsidies dressed as research.
But back when the Fairtrade idea started the subsidies were even more blatant. The EU and US were happy to call it subsidies back then. So here you have a global agricultural commodity trade system where the rich countries support their farmers with subsidies because they can’t compete with farmers in emerging markets and developing countries – of course hidden as food security, national security, national interests, etc. The poorer countries? How did they fare on the subsidies front? Not so well…
Not only could they not support their farmers but the WTO rules (that they stupidly agreed to) stipulated that they couldn’t give their farmers subsidies in any case. Great trade system isn’t it? The rich can get richer thanks to the subsidies and the poor will remain poor – or get poorer.
This was where Oxfam and mates stepped in and created Fairtrade. Not to just give farmers a premium for their products but to address the fundamental injustice in the world trade system. The premium they pay and guarantee is a non-government subsidy. It helps farmers from poorer countries to compete against richer nations through a subsidy system that completely passes the WTO system by and is paid for by the people who also pay for the subsidies in their own system – richer nations. Pure genius.
The Fairtrade system has major flaws and I am not always that impressed with the work they do or the claims they make. But do not misunderstand their claims and the true benefit of this system. You need a system that undermines the global trade system if the trade system is so unjust as it is. Fairtrade is needed as long as the world trade system, in especially agricultural commodities, benefit the rich nations over the poor nations. There is no level playing field and the free market is a myth when it comes to argiculture – and Fairtrade plays a key role in trying to level the playing field a bit more. Not perfect but fundamental in trying to address something that is outside of the control of farmers in poorer markets.
No other system can claim the same. They might be better in helping farmers become more efficient or improve their environmental impact but none of the other systems actually addresses the much bigger challenge of a fundamentally flawed and imbalanced world trade regime. We need Fairtrade in a world where free trade does not exist in any other place but empty words and the worthless pages of world trade agreements.
So what about companies that argue against Fairtrade? Maybe they should look a little bit closer to their own supply chain. Do you sell food stuff? Anywhere in the US or EU? Do you by any agricultural products in any of these countries in the US or EU? I can guarantee you that your company benefit from subsidies being handed out to farmers in corn if you sell one single soda or chocolate in the US. Sip your subsidized wine Europe. Spread those subsidized jam and dairy products on those subsidized breads. Slap another subsidies steak on the bbq. The list goes on and on. Almost every single food and beverage company in the US and EU indirectly benefit from some form of subsidy through their subsidized supply chain. Why are they not arguing against subsidies of these farmers a little harder? It sounds like double standards to me that companies are against Fairtrade because of the subsidies but willing to take the subsidized products in Europe and the US and sell that to us. Another slice of double standards anyone?
I think Fairtrade was a genius idea. I just wish they would go back to their roots and remember why they were started in the first place – to take on a fundamentally flawed world trade regime. No other system can claim the same.
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