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Title: “The Big Picture: Global collaboration between companies for sustainability” A two hour session. We don't want to get technical; we want to educate and give them some information they can take back home. The approach will be robust, critical and frank. I will share my knowledge of working within a number of global collaborations with a strict agreement that the Chatham House Rule will bind the members. The aims of this presentation will be: • To consider competition law and the implications for companies that collaborate with their competitors • To inform the group of the various approaches around the world that have tackled collaborative working on sustainability issues. Included would be a look at their various approaches to governance. • To share case studies of groups that have worked to set up voluntary codes or standards • To build understanding of success and failure, barriers to change, what needs to happen. • To facilitate a discussion on lessons for the SSC.
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The Big Picture
MELISSA’S MESSAGE...
“One of the advantages, apart from being EU‐based ourselves, is a lot of our members are European or international organizations. I would say the UK is the most progressive nation in seafood and that it will be more difficult rolling SSC out in Europe, but we will have something that works to take forward. For those international companies, it will surely be a lot less daunting if their UK representative has already done it.”
SSC AIMS: WHAT’S RELEVANT #1?
Promote sustainable seafood consumption
Encourage UK consumers to eat a wider variety of sustainable seafood, and to introduce species to its stores and restaurants that are currently underutilized or discarded
Support the sustainable use of unwanted discarded species’ trimmings and offal in the manufacture of fishmeal
Use harmonized seafood labeling based on agreed standards to provide consumers with accurate information on sustainability
SSC AIMS: WHAT’S RELEVANT #2?
Require fishermen, where possible, to collect catch and discard information for the seafood sourced by coalition members and pass this information to government authorities for use in scientific assessments
Adhere to a new voluntary industry code of conduct agreed by the coalition until sufficient management measures and labeling rules are in place
Influence changes in policy at UK, EU and international level
Build national and global alliances
Inform the public on seafood
AIMS OF THE PRESENTATION
1. To consider competition law and the implications for companies that collaborate with their competitors
2. To inform the group of the various approaches around the world that have tackled collaborative working on sustainability issues.
3. To share case studies of groups that have worked to set up voluntary codes or standards
4. To build understanding of success and failure, barriers to change, what needs to happen.
5. To facilitate a discussion on lessons for the SSC.
CONTENT
1. Drivers of change
2. Competition Law
3. Other approaches and their governance
4. Case studies: Voluntary standards
5. Success and failure... The barriers to change
The drivers and issues move fast…
THE GLOBAL ECONOMY
Time
CONSUMER SPENDING
Time
CONSUMER CONFIDENCE
Time
AGRI-FOOD TRADE FLOWS(SELECTED COUNTRIES, 2006, US$ MILLION)
11
China Canada
United States
Brazil Mexico
3,476
2,151
12,336
14,237
1,942
141
8,079
8,619
607 71 135 534
466
658
69
5
* Note: Used SITC (Rev. 3) 01 (Food and live animals) category; China includes Hong Kong and Macao, SAR; trade between Canada and Brazil, and China and Mexico is not presented for brevity’s sake (each amounts to smaller than US$400 Million); Based on the exporting country’s reports. Source: UN Comtrade
More spent on brand integrity than on development aid.
Anti global NGOs paint everything black
Name and shame = knee jerk behaviour
Product integrity now competitive
THE RETAILERS ARE IN CHARGE
Hartman Group 2010
Rank Company Food Sales,€bn
Banner Sales, €bn
Grocery %
1 Wal‐Mart 214 330 65
2 Carrefour 88 112 78
3 Tesco 56 75 75
4 Schwarz Group
54 63 85
5 Kroger 49 57 86
6 Aldi 49 54 90
7 Walgreens 48 52 93
8 Seven & I 44 62 71
9 AEON 43 54 80
10 Rewe Group 43 49 89
THE TOP 10 FOOD RETAILERS
Source: Planet Retail: 2009
The public debate
The institutional debate
Trust
Competition Law
2: COMPETITION LAW
This law promotes and maintains market competition by regulating anti‐competitive conduct
Known in the United States as ‘antitrust’ law
In Europe there are 4 main policy areas:
Cartels, Monopolies, Mergers, State Aid
When working together on sustainability policy, competition law should not apply
See notes on Treaty on the functioning of the European Union, Article 101 and 102
ANTITRUST GUIDELINES:EXAMPLE
The Roundtable on Sustainable Palm Oil
Participation in RSPO is voluntary. No one will be pressured to participate in it.
Members of RSPO shall remain free at all times to join other initiatives on sustainable agriculture and shall not be limited in any respect in the ways they decide to conduct their business.
Membership of RSPO shall be open to all companies/organisations within the membership categories specified in its Statutes and By‐laws.
RSPO will not be used in any manner as a vehicle for participating companies/organisations or individuals to discuss or seek agreement on any of the subjects mentioned under paragraph C) herein. (see notes) It is important to keep in mind that no formal agreement needs to be reached to run afoul of antitrust or competition laws.
No competitively sensitive information will be exchanged among RSPO members.
3: OTHER APPROACHES ANDTHEIR GOVERNANCE
a) Multi stakeholder organisations ‐ Roundtables
b) The International Social and Environmental Accreditation and Labeling Alliance ‐ ISEAL
c) Business driven approaches with non‐profit advice
d) Business driven approaches
e) International organisations
PROLIFERATION
MORE ON GOVERNANCE OFCOLLABORATIVE APPROACHES
A balanced and effective decision making body, supported by a secretariat
• A decision making body is required
• Participants can be elected, chosen or volunteered depending on the needs of the organisation.
• However the composition is arrived at, it should reflect the interests of the different stakeholder groups.
• A permanent secretariat that can execute the wishes of the decision making body will help enable consistent progress.
3(A) MULTI STAKEHOLDERORGANISATIONS
They “have emerged in response to governance gaps in which regulatory, judicial, and broader economic and political systems have failed”
John Ruggie, Special Representative of the Secretary‐General of the United Nations (SRSG)
Improving the human rights performance of business through multi‐stakeholder initiatives: summary report, November 6th‐7th 2007
ROUNDTABLES
PALM OIL AND SOYStarted after Migros contacted Bruno Manser in 1999 – he then involved WWF. In December 2001, the first sustainable palm oil was imported by Migros from Ghana
In 2002 others became involved including Sainsbury’s and Unilever
In 2004 the Roundtable on Sustainable Palm Oil was formed
In 2005 the Roundtable for Responsible Soy was formed by WWF, Monsanto, Cargill and others
ROUNDTABLES:WHAT’S GOOD
Because they are multi stakeholder initiatives, they bring credibility, accountability and transparency in the supply chain by bringing the different actors to the table
The agreement of voluntary production standards
The outputs are more likely to work as all key actors of the supply chain are engaged
They can reach across frontiers and truly tackle global problems
They can evolve into independent certification systems to facilitate responsible purchasing
World Wide Fund for Nature Conservation (WWF)
ROUNDTABLES: WHAT’S NOT SO GOOD #1
• The commitments of participants must be clear with a robust framework for compliance.
• Without clarity and the ability to hold companies to account, voluntary initiatives can become little more than public relations tools for some of their participants.
• Legislation is also necessary to protect human rights and ensure a level playing field for companies.
Amnesty International
ROUNDTABLES: WHAT’S NOT SO GOOD #2
• Complaints procedures have tended to be weak
• Avoidance of the effective tactic of negative publicity to exert pressure on large corporations.
• Multiple weak, ineffective collaboration in the same sector dilutes focus and resources
• Strong, dominant organisations with high compliance costs can become a barrier to entry for small and medium enterprises, a particular problem for firms in the global south.
Peter Utting, Deputy Director of United Nations Research Institute for Social Development (UNRISD)
ROUNDTABLES: WHAT’S NOT SO GOOD #3
• Some initiatives have ignored or marginalized workers, trade unions and local level monitoring organizations
• Scaling up monitoring and verification procedures can be extremely complex and costly
• Reporting can be unreliable due to the reluctance of both workers and management to communicate openly and honestly on certain issues, and the typically short timeframe of any monitoring exercise.
• Reliance by some schemes on commercial auditing and consulting firms raises serious problems regarding quality and cost.
Peter Utting, Deputy Director of United Nations Research Institute for Social Development (UNRISD)
ROUNDTABLES: WHAT’S NOT SO GOOD #4
• Slow uptake and small market share ‐MSC and FSC
• Focused on international markets – what about much larger domestic and regional trade?
• One tool in the toolbox – without proper governance by governments and multilateral agencies, it will be an uphill battle
• Coalition of the active – engagement is resource hungry so become exclusionary
• Acknowledgement of limitations – its important to be clear about what can and can’t be delivered.
Certification and roundtables: do they work? A WWF review of multi stakeholder sustainability initiatives September 2010
3(B) ISEAL
3(C) BUSINESS APPROACHWITH NON PROFIT ADVICE
GLOBAL SOCIAL COMPLIANCE PROGRAMMEThe GSCP is ultimately working towards remediation of root causes to non‐compliances, aiming at supplier ownership of solutions and their implementation.
Founded in 2005 to tackle the challenges of duplication and lack of impact on labour standards in supply chains.
It aims to harmonise existing efforts in delivering a shared, global and sustainable approach for continuous improvement of working conditions in the global supply chain.
In 2009 they went beyond social issues when they published their “Draft Reference Environmental Framework Requirements”. It’s specific to processing and is an important step forward for harmonisation.
BUSINESS DRIVENHARMONISATION
GLOBAL SOCIAL COMPLIANCE PROGRAMME
There are variations in social and environmental compliance standards, audit methodology and requirements for auditing competence
The Equivalence Process, launched in 2011, will help companies and initiatives overcome this by allowing them to benchmark their systems, tools and processes against agreed best existing practice as described in the GSCP reference tools
GSCP GOVERNANCE MODEL
3(D) BUSINESS DRIVENAPPROACH #1
INTERNATIONAL DAIRY FEDERATIONThe only example of a genuinely global alliance for an agricultural commodity representing 86% of the world’s total milk production.
In Berlin in September 2009, seven organisations including the IDF, signed the ‘Global Dairy Agenda for Action’. It includes A pledge to reduce carbon emissions as a part of its contribution to help address global warming.
The agreement represents a crucial step forward for an industry that contributes 3% of global greenhouse gas emissions, 80% of which are on the farm.
The scope of their work includes the processing and packaging of dairy products, but not the distribution and retailing.
There is current work on a harmonised carbon footprint system which means that 85% of the world’s farmers could have a shared approach.
3(D) BUSINESS DRIVENAPPROACH #2
SUSTAINABLE AGRICULTURE INITIATIVE PLATFORM
SAI Platform is an organisation based in Europe but with global membership.
It has been created by the brand manufacturers to facilitate worldwide communication and involve stakeholders in developing sustainable agriculture.
SAI Platform supports agricultural practices and production systems that preserve the future availability of current resources and enhances their efficiency.
3(E) INTERNATIONALORGANISATIONS
GS1 is the most popular supply chain standards system globally. One of its important features is a global IT reference system.
ISO launches new standards according to demand from stakeholders and sectors. An ISO standard is a living agreement with criteria and technical specifications. Of note is ISO 14063:2006 (Environmental communication).
OECD brings together democratic countries’ governments to help them gain prosperity and eliminate poverty through economic growth and financial stability. Their key indicators include fish resources.
Global Reporting Initiative (GRI) is the world’s most widely used company reporting framework for sustainability A multi stakeholder organisation, its third generation is referred to as the ‘G3 Guidelines’ and was released in 2006.
4 CASE STUDIES: FSC & MSCPROGRESS SO FAR
Scheme Started Market share Harvest share
FSC 1993 12% 8.4%
MSC 1999 50% whitefish0.05% tuna
4.1%7.1% of all catch
MULTISTAKEHOLDER SUSTAINABILITY INITIATIVESInitial outcomes of a WWF review study 2011Mireille Perrin [email protected]
WHAT’S BEEN LEARNT #1
STANDARD SETTING (from Twenty Fifty Ltd)
Standards that are realistic clear and provide a good basis for implementation
Strong normative content, relating to UN, OECD or other international standards
Standards that are not dominated by legal considerations alone – as simple and as concrete as possible
Engaging interested parties beyond the core participant group
Setting expectations on participation, verification and reporting
Strong public commitments from all stakeholders
WHAT’S BEEN LEARNT #2
IMPLEMENTATIONA clear understanding of expectations related direct and indirect impacts
Good promotion of the standard
Evolution of the governance structure to support local implementation
Development of practical guidance to aid implementation
Establishing multi‐stakeholder collaboration at the country or local level
A strong secretariat – with independence and ability to mobilise all stakeholders (in particular governments) and to govern participation criteria
Continuing political support of home countries internationally and in producer countries, as facilitators and honest and skilled brokers
Continuing ethos of leadership: effective sector pillars but also specific actors who are willing to lead troubleshooting.
WHAT’S BEEN LEARNT #3HARMONISATION
EIGHT POLICY STEPS1. The business case must be agreed by the CEOs.
2. The top companies must all be involved.
3. The facilitation must be seen as neutral and the organisation at the centre must not benefit from the process.
4. Confidentiality must be formalised.
5. Decision making should be unanimous.
6. All companies should aspire to best practice, which is never static. Due to global variability this cannot be delivered meaning supply chain expectations must be realistic.
7. The top companies must deliver on policy convergence. However, progress will never be even, so stories of success and failure must be shared.
8. A genuine multi stakeholder process may slow progress significantly. If it is not in place, the views of stakeholders must be sought and their contribution valued. Without their support, harmonisation will itself be slowed.
WHAT’S BEEN LEARNT #4HARMONISATION
EIGHT PROCESS STEPS1. Harmonisation is not about setting new standards, it is about bringing
together what already exist.
2. Project management skills in facilitation will accelerate progress.
3. All communication must be consistent and transparent.
4. Competence in working groups is important, so practical experience is required.
5. The realities of business means individuals will have time constraints. Therefore, facilitation should ensure workload for participants is realistic.
6. Agreement on both good and best practice must include stakeholder consultation.
7. A central reference approach must be agreed to provides a list of essential requirements
8. Schemes should be allowed reasonable transition periods for adaptation before new company requirements are enforced.
5
Checklist for failurePoor decision makingComplexity in approachMajor players absent
Checklist for successSenior supportTransparency and honestyAlignment of buying with CSR
AIMS OF THE PRESENTATION
1. To consider competition law and the implications for companies that collaborate with their competitors
2. To inform the group of the various approaches around the world that have tackled collaborative working on sustainability issues.
3. To share case studies of groups that have worked to set up voluntary codes or standards
4. To build understanding of success and failure, barriers to change, what needs to happen.
5. To facilitate a discussion on lessons for the SSC.
ITS NOT JUST WHAT YOU CONSUME... ITS ALSO HOW IT WAS PRODUCED
Better ingredients...
Away from price buying...
towards integrity and authenticity