Agenda

• Steve Homer

– Flamingo in two slides– The day it all went wrong…– A solution emerges…

• Caroline Driver

– Business Ethical Audits – “local partnership to Regional business solution”

Flamingo Group CG Scope

• Both Social and Environmental

• Our own companies worldwide

• Our supply partners world wide – 225 companies and over 1200 sites

• Governments, Trade Unions, Non Governmental Organisations, the media and anyone interested in the activities of Flamingo and their suppliers worldwide

• International certification bodies, private labels, trade associations and working groups.

The Flamingo Group• £300M turnover• 9000 employees• 6 Farms in Kenya• 1 Farm in S Africa• Sourcing in 23 countries across 4 continents• 4 UK packing sites• Supplying 7 UK supermarkets• 1M packs of vegetables per week• 1.5M bouquets of flowers per week

• 18 Million Flower Stems Per Week

Flamingo Holdings LtdFlamingo Holdings Ltd

Homegrown KenyaHomegrown Kenya

Flamingo Flowers S AfricaFlamingo Flowers S Africa ZwetslootsZwetsloots

Flamingo UKFlamingo UK

Flower Plus UKFlower Plus UK

Flamingo Flowers b.v.Flamingo Flowers b.v.

Dudutech KenyaDudutech Kenya

LingardenLingarden

Flamingo Holdings LtdFlamingo Holdings Ltd

Homegrown KenyaHomegrown Kenya

Flamingo Flowers S AfricaFlamingo Flowers S Africa ZwetslootsZwetsloots

Flamingo UKFlamingo UK

Flower Plus UKFlower Plus UK

Flamingo Flowers b.v.Flamingo Flowers b.v.

Dudutech KenyaDudutech Kenya

LingardenLingarden

Flamingo Operations – Our Challenge

• Ability for the business to react at short notice and remain flexible without carrying surplus stock or logistics capacity.

• Our orders arrive at 10pm and have to be delivered to depot within 24 hours. – Forecast accuracy is 75%

• Provide our customers with an order service level of 97% or higher

• Real time supply chain 24/7 – 365 days a year

Or from here to here…..

…..In 72 Hours

Licensed to trade

Flamingo success story

• Established in Kenya for 23 years Investment in Kenya in excess of $100m over the last 20 years

• Totally vertically integrated between Kenya and the UK from growing to airfreight to marketing to distribution.

• Geographically diverse land bank of over 2,700ha, 97% of the land is owned

• Reduction in chemical use by 80% through our own integrated pest management company

And then one day………..

• “Write to your local supermarket asking them to put pressure on Kenyan flower growers to improve conditions.”

• Marie Claire Magazine March 2003

First Reaction

• Contact PR company

• Issue statements

• Contact customers

• Damage limitation

• All UK focused activity

• “Corporate denial”

It just got worse….

• Supermarket task team sent to Kenya

• Interviews with NGOs and workers

• Increased allegations and anecdotal evidence

• Dysfunctional and weak local trade union

• Industry disengaged with local community

• Lack of trust in the whole Kenyan industry

What did we do wrong ?

• Reliance on single stakeholder view– Industry standards ( Kenyan Flower Council )

– Industry auditors ( Blue Chip Europeans )

• Closed doors– Not listening to detractors ( NGO nutters )

– Looking at the positives ( Best in the industry )

• Underestimated the new media age– SMS messages, Yahoo webmail– 24 hour news media

Good Agricultural

Practice

Eurepgap

Good Manufacturing

Practice

BRC

IntegritySocial & Ethical

ETI

Environmental

ISO 14001

Business Equity

Fair Trade

Provenance

A unique solution emerges…

• ETI suggestion to find a local independent partner

• Participatory audit process using local auditors with awareness of local issues, attitudes and tensions.

– Pre-audit awareness– Flexible audits tailored to the Flamingo workers

and not the Flamingo customers– Text based reports not tick boxes

• Africa Now – a livelihood NGO more acceptable than a frontline campaigning organisation

Our Concerns about NGOs

• Disorganised – never been in business

• No concept of commercial timeframes

• Campaigning organisations looking for trouble

• Idealistic not Pragmatic

• Don’t know our business

What we got….

• Auditors who knew about local tensions of race, tribe, gender – Most worker tensions uncovered were cultural or accidental and not management or institutional

• Cost effective solution and more diligent auditors . – Auditors with an interest in using their skills to suggest a solution to the problems, same cost as blue chip auditors and no PR company

• Credibility with our UK customers and media – Independent verification and a positive story of and enlightened company facing up to its own limitations.

• An emotional health check of our company – Not just a certificate to hang in the foyer of head office.

Successful partners

&&

Africa Now