Business Respect - CSR Dispatches No 115 - 28 Oct 2007

==================

An email newsletter with news and discussion focusing on corporate social responsibility globally, looking at the companies in the news and the emerging issues. Linked to the website at http://www.mallenbaker.net and produced every two weeks.

In this issue, we consider the implications of the Soil Association's move to restrict air-freighted produce from its organic certification.

In the news:

Feature articles on the internet:

===================

Topics:

Want to read a hyperlinked version of this issue? You can find one on the website at http://www.mallenbaker.net/csr/nl/115.html.

Copyright 2007 Mallen Baker. All rights reserved. For information on how to subscribe, go to http://www.mallenbaker.net/csr/nl/subscribe.html

===================

Welcome

Consumer labels can be important signals that shape buyer behaviour, or they can be confusing and irrelevant. Such questions have been raised in the last week by the action by the UK's Soil Association to alter the basis on which its 'organic' certification is granted. The dilemmas of this decision are explored in our article this time.

In the mean time, we continue to consider ways in which the internet will develop new approaches to support the CSR movement's development. Although the real phenomenon that is revolutionising the web is social networking sites, we have yet to see this approach really make the difference when it comes to corporate executives committed to social responsibility. Busy execs still face the same barriers to participation that they always have - time. They don't surf. They don't browse. And now they don't chat, poke or twitter.

By and large, the web is still used in business as a transaction medium or an information library. Web-based technology may provide tools of the trade, for instance CRedit 360 and the other social responsibility reporting tools. But we are still seeking the variation on the technology that will create the extended community of practitioners around the world who are committed to this as an agenda.

At least we now see more CSR websites using some of the tools to make it easier - newsfeeds, email updates and the like. These are smart tools for the intended target audience since they are about making information available with the minimum time commitment. But there must be more. I would be interested in anyone involved with new developments in the use of the web to create communities of interest around CSR to talk about what they're doing - there is surely the content of a future article there.

Speaking of social networking though, I finally relented to the lure of Facebook a few weeks ago. I had had a few of those email invitations to sign up before, but was surprised enough to get two in one week from people I hadn't seen for 25 years to finally relent. It is a great tool for building personal networks, but for all that there are CSR-related groups on there, it remains underpowered for 'networks with purpose'.

The new vote has gotten underway on the website. The current tally is:
Which of these groups has done the most so far to respond to the challenge of climate change?
Governments 29 (15%)
Business 61 (32%)
Citizens 101 (53%)

Thanks to the 191 people that have voted so far. Still time for you to make your views known, although we won't keep this vote on for too long, I suspect.

Mallen Baker
mallen@mallenbaker.net

===================

CSR News 28 Oct 2007

US: Action against companies over apartheid reinstated

A federal appeals court has reinstated some of the suits against around 50 companies accused of having supported the apartheid regime in South Africa.

The move was opposed by the US government, which said that such litigation would interfere with South Africa's own due process on reconciliation. During the earlier stage of the lawsuit, the South African government had objected, saying that such cases under the Alien Tort Claims Act interfered with its own jurisdiction.

The claimants in the case are made up of people who lived in South Africa during the last fifty years. They originally filed separate actions which were subsequently combined into the existing class action.

BP fined for environmental crimes

BP has been fined $373m by the US government for a number of environmental crimes and fraud. The largest part of the levy relates to price manipulation of propane over which four BP workers were indicted.

Charges included failings leading up to the explosion at the Texas city refinery and the pipeline leaks in Alaska.

BP America chairman said that the company admitted that its operations had failed to meet the requirements of law. The government said it would ensure that the company was monitored by an independent body for three years to guarantee compliance.

Gap takes action over child labour allegations

Gap has said that it takes allegations of child labour in its supply chain "extremely seriously" following an investigation by the UK newspaper the Observer.

The newspaper said that it had found children as young as 10 making clothes in a sweatshop in India in conditions that resembled slavery.

The company said that it would end its relationship with suppliers that did not meet the company's standards. It has stopped working with 23 suppliers during the last year due to violations of its policy.

The company has ordered the garments in question to be withdrawn from sale and has begun its own investigation into the claims. The company said it was unaware that clothing for its Christmas sales had been improperly subcontracted to a company using child labour.

France: Monsanto sues anti GMO activists

Biotechnology giant Monsanto has filed a suit against unidentified activists who, according to the company, destroyed three test sites of genetically modified crops.

Under French law, suits are able to be brought against unknown transgressors. The action comes as a result of a string of attacks during the last year which have been described as having done real damage to the process of scientific research.

The controversy has echoes of previous actions in Europe, particularly in the UK, when Monsanto - which had won public opinion broadly in its home markets - underestimated strength of feeling overseas.

Campaigners argue that it remains the company's tactic to seek to flood the world with genetically modified crops which then cannot be retrieved or stopped.

US: States lobby for Microsoft anti-trust settlement to be extended

Ten US states have called for an extension of the government oversight of Microsoft agreed as part of its antitrust settlement. Florida, Louisiana, Maryland and New York - which had supported the terms of the original settlement - have joined six others in arguing that the action, due to expire next month, should run through to 2012.

The states have made the case that continued oversight is still needed because the software giant still has more than 90 percent of the market in computer operating systems.

So far, the Justice Department has indicated that it does not believe that such an extension would be justified.

Japan: Alico warned over misleading cancer policy ads

The Fair Trade Commission has told American Life Insurance to pull newspaper adverts for a cancer insurance product which it has desscribed as 'misleading'.

Alico Japan had run the adverts at the beginning of the year, promising payouts to cancer sufferers without disclosing that these could only be received under certain circumstances - specifically if the patient is hospitalised for an operation to have the neoplasm removed. Such operations usually do not require hospitalisation.

This now makes the second time that the FTC has stepped in over claims made on life insurance. Nippon Life Insurance received a similar order four years ago.

CSR FEATURES from the Internet

Big bucks, bad business - 22 Oct 2007 FROM International Herald Tribune

With annual growth at over 7 percent, Russia's is one of the fastest rising economies in the world. Russia has been transformed, apparently overnight, from a "transition economy" receiving support and aid from the West to an emerging energy superpower.

The country's business reputation, however, does not match its economic success. World Bank governance indicators place Russia near the bottom of the pile compared to countries with similar credit ratings. In a survey by the Economist Intelligence Unit, the main concerns on the part of Western executives were the lack of corporate governance, transparency and business ethics.

Read full story

=================================

The unnecessary suicide of the organic food movement

Article by Mallen Baker

The UK's Soil Association has announced that it will remove its organic certification from any foods which have been transported by air freight except for those whose production meets Fairtrade requirements. The move has created huge controversy, and with justification.

The organisation had been considering a blanket ban on any air-freighted goods, but had also heard the pleas of some of those that pointed out the impact a blanket ban would have on developing countries, where organic produce is a significant component of processes for economic development.

Unfortunately, the move suffers a similar downside to a number of policy initiatives taken at speed in the face of outside pressure, which is the potential for serious unintended consequences.

It is what happens when campaigns become focused on a symbol - such as air travel has become for the climate change campaigners - rather than the real issue which in this case is the overall contribution to climate change emissions produced by the product in question.

There are a number of good examples.

New Zealand butter, for instance, sold all the way round the world in the UK, has less carbon emitted per kilogram of butter than English butter, even taking its shipment into account. How can this be so? Because New Zealand cows are able to eat grass, which grows all year round. In the UK they eat artificial feeds for part of the year, and are kept in heated accommodation.

There are plenty of other examples - this is not a one-off. Italian tomatoes are less carbon intensive than British tomatoes outside of a fairly short season, when the British tomatoes need to be in a heated greenhouse. Likewise, Kenyan flowers may be better than similar flowers grown in Holland, and so on.

The disappointment is that a good, rigorous certification symbol that covered how foods were grown, has now been rendered completely unrigorous by taking in outside factors in a poorly considered way. Just what is the organic certification now supposed to mean?

The aim, of course, is that it would become a single more all-encompassing green label, enabling consumers to establish that the produce they are purchasing has the best performance in terms of its environmental impact. Many people who buy organic food, the argument goes, do so not just because of the health issues around pesticides on food, but because they care about the environmental impact.

But the new criteria now fail to do that. Produce is not rated on its carbon emissions, but on an arbitrary measure of how it has been transported. People conscious of their health may find that food that has no pesticides will not carry the label. People conscious of the environment may find that produce that may have had a higher environmental impact will carry the label. In one dramatic move, the label has been rendered all but useless for its original, and its claimed new, role.

In addition, the unintended consequences include real hardship for some of the poorest people in the world. A study by the Danish Institute of International Studies found that the poorest countries make up just under 80 percent of imported organic foods air-freighted into the UK. Many of these will not fulfil the technical requirements of Fairtrade certification, and so will have lost their selling power.

The depressing thing is that some of the other certification schemes around the world may now follow suit. The glimmer of hope is that the Soil Association will be holding further consultations during the coming year, with changes taking place in January 2009. That gives time for a change.

What should happen instead? First of all, we need to be clear what the different policy devices are for. Food labels have only one role which they can fulfil well, that is to give the consumer clear information on the basis that there is a choice. The current organic label fulfils that function well - it is about food grown naturally without pesticides. Likewise, supermarkets such as Tesco and bodies such as the Carbon Trust have begun looking at how carbon labelling could be introduced onto products to give relevant and useful information about the real impact of products. Each of these should be supported as a means to helping identify impacts, and build capacity for alternatives. But they measure separate things, and they should be kept separate.

Ultimately, of course, there are certain consumption patterns that may become seen as non-valid choices. We are some way away from this yet, but as the consensus for reduced carbon impacts grows, it may be that legislation will be used to set standards for different products, in the way that the European Commission is doing on car emissions. Or certain products may even become banned, because the impact is too great. These are areas that need to be well considered, and well flagged in advance.

When governments around the world agreed that chlorofluorocarbons were such potent destroyers of the ozone layer that they would all sign up to the Montreal Protocol phasing them out, companies were given notice that they had a few years to work on better alternatives. Such pressures, applied through a consensus of action, can spark innovation through necessity. Undoubtedly, such action will become a feature of the response to climate change as well.

What simply does not help, however, is knee-jerk action clutching at symbolic gestures. Confusing labels (information) with regulation (banning or restricting) on the basis of popular reactions to one single factor (air-freight) is as good an example of this as we have seen. The consumer is confused, developing world producers are denied, and the environment is not protected.

It is all very well to say, as the Soil Association has, that it is better for developing world farmers not to be encouraged to depend on markets that require air freight. There is nothing to stop anyone from working to achieve such aims, provided that this is done on a basis of rigorous analysis of the best and worst environmental options. But denying the organic label to properly produced organic food is not the tool to do it.

It is to be hoped that the Soil Association reconsiders its position during the coming months. Otherwise, someone will simply have to invent a new label that did what the old one did for those consumers who still need the information it provided. That will seem like a colossal waste of time and energy when there are more important battles to be won.

=================================

All content may be quoted with appropriate acknowledgement by any non-profit or non-commercial organisations. Others please contact mallen@mallenbaker.net. No guarantees are made to the accuracy of any articles. This electronic publication is independently produced, and should not be taken as representing the views of any organisation.

Send comments and editorial contributions to mallen@mallenbaker.net

To unsubscribe go to http://www.mallenbaker.net/csr/nl/unsubscribe.php

In the news from the latest issue

Nepal: Relatives of killed workers sue US firm KBR for trafficking

US: Proposed Alaskan mine survives people's vote

Merck accused of dressing marketing up as science

Australia: Business lobby group warns over carbon trading

India: Tata Motors threatens pull-out from West Bengal

US: Climate change resolutions making impact on companies

Japan: Details of carbon labeling confirmed

Canada: Wal-Mart has union contract imposed

India: Rising protests against factory building

US: Fraud will cost firms $994bn this year

US: American Airlines accused of safety breaches

Ghana: Call for companies to help clear up electronic waste

US: Disneyland demonstration over hotel worker benefits

Uzbekistan: Major retailers call for end of child labour in cotton

... more news stories

To make any comments / suggestions re. this site, please contact mallen@mallenbaker.net
Business Respect - most recent edition added on 17th August 2008