Suppliers: prioritising issues in the value chain

June 01, 2001

A missing Nigerian ship in April prompted a massive debate about child labour in West Africa. Implications for companies are far-reaching – and whilst it pays to listen to critics, companies themselves are ultimately the ones best equipped to tackle the issues.

The chocolate wars

Business representatives from the cocoa industry will form part of a cross-sector taskforce set up on May 4 by the Foreign & Commonwealth Office to address the issue of forced labour. The move follows reports in the international media of child labour in West Africa. The media had criticised the industry’s trade body, the Biscuit, Cake, Chocolate and Confectionery Alliance, for the limited scope of its research on the issue. Contact John Newman, BCCCA, on 020 7404 9111 (

New Dragons Award for supplier relations

Supplier relations are a key new component of The Lord Mayor’s 14th annual Dragon Awards scheme this year. London-based businesses can now win recognition for four new aspects of community involvement:

• The 2001 Lord Mayor’s Award, for organisations that use their purchasing power to support local businesses;

• Heart of the City Award for businesses located only in the City, Docklands or City Fringe;

• Corporate Community Involvement Newcomer Award – for implementing CCI within the last 18 months;

• The Small Business Award – now for companies of 100 employees or less, and with turnover of less than £3 million (smaller than last year)

Contact Fiona Milligan, Corporation of London, on 020 7332 3451 (

Queen’s Awards winners

Among winners of this year’s Queen’s Awards for Enterprise are companies with strong supply-chain practices. They include Yeo Valley Organic Company, which has built up a strong relationship with organic farmers over the years and supported the organic industry through organisations such as the Organic Milk Suppliers Co-operative. Other winners were B&Q (for its Quality Ethics, Safety programme), and Safeway (for its railfreight strategy). Announced on April 23, this year’s awards featured a new category for social, economic and environmental achievements. A smaller winner, Betty Tea Shops, based in Yorkshire, helped to set up the Tea Sourcing Partnership which makes social audits of plantations and also runs its own Trees for Life Campaign. Contact David Moore, the Queen’s Awards on 020 7222 2277 (

news in brief

• The International Labour Organisation is highlighting the extent of forced labour in countries such as Sudan, Liberia, Burma, Pakistan and Brazil in a new report, Action against Child Labour, published on May 25. Contact ILO on 00 41 22 799 7940 (

• Coca-Cola is requiring all its suppliers to develop equipment that is 40-50% more efficient by the end of the decade, in keeping with the agenda to tackle climate change laid out in the Kyoto Protocol. Contact Coca-Cola on 00 1 404 676 2121(

• Toyota, lays out its action plan for future environmental management, including a section on ‘greening its supply chain’, in its first ever environmental performance report, released April 18. Contact Toyota on 00 1 859 746 4000 (

• Nike is again the subject of labour rights criticism in a new report by the non-profit organisation, Global Exchange. The report, Still Waiting for Nike to Do It, charges Nike chief executive, Phil Knight, with failing to resolve labour abuses within the company despite his promise to do so three year ago, on May 12, 1998. Contact Global Exchange on 00 1 415 255 7296 (

•Waitrose, Sainsbury’s and the Co-op have been stocking their shelves during June with the UK’s first fair trade fruit juice, Fruit Passion, which guarantees a fair price to its growers in the developing world. Contact Nathalie Winder, Waitrose, on 01344 82 4158 (

• By mid-April, the number of companies intending to join The American Fair Labor Association’s university affiliates’ programme hit the 900 mark. The programme applies to all manufacturers of ‘logo’d’ goods sold in university shops, and follows concerns on campus about the use of child labour to produce university sportswear and other goods. Contact Sam Brown, FLA, on 00 1 202 898 1000 (


When a product accidentally becomes contaminated, the costs of recall from market are very significant – so too are the risks to reputation. Companies have a business need to find out who did what in their supply chains, so they can work out what went wrong, and who to blame. ‘Great’, say the human rights NGOs. ‘So what’s stopping you from checking up on the human rights issues too?’ When a Nigerian ship went missing in April whilst allegedly carrying child slaves to buyers in Gabon, Cadbury’s got caught up in the debate, as some of its cocoa is sourced from nearby Ghana. But a company like Cadbury has an entirely different supply chain from a Nike, which is being criticised again by the Global Exchange on labour rights. As a garment company, Nike can give (and take back) contracts with a limited number of factories with which it has a direct relationship. Whereas, companies which are manufacturing products from agricultural materials tend to buy each ingredient in bulk through intermediaries. These may be co-operatives, commercial enterprises or government boards: the point is there is no longer a direct relationship between the manufacturer and the farmers who grow and harvest its raw materials. Hundreds of thousands of farmers may have been involved in producing the crop, so it will be extremely difficult to verify the labour issues and standards involved.

The new Dragon’s award category, and Yeo Valley’s success in this year’s Queen’s awards rightly recognise that a company’s impacts extend beyond its owned and operated businesses. Good for Shell, which this year published which joint ventures it had terminated because of poor standards (CAB 57). Good for companies like Coca-Cola, which is responding to calls to mobilise its suppliers to get the technology right to minimise greenhouse gases. Good on Toyota, which is reporting on how it tries to maximise the positives among its 500 North American suppliers.

But the longer the supply chain, the more complex the picture becomes. Companies have to chart their way through the very different interests in the debate, and work out the priority issues for themselves. The best way forward is to start internally, asking who is involved in their supply chains, whether they are being treated fairly, and what the issues are. In the first of two articles, our own Alison Gulliford, and Mick Blowfield from the Ethical Trading Initiative examine what’s involved in more depth, beginning later in this edition.