Business Ethics BUSI 1314 Lecture 7 – CSR in the supply chain

Wim Vandekerckhove
vw01@gre.ac.uk
This lecture will help students to:

Use the notion of

‘due diligence’ in relation to CSR
gain insight into the institutional developments relating to CSR
analyse and solve ethical problems in supply chains

University of Greenwich - 2010-2011
discharging

your responsibilities

Brings ‘soft law’ into Courts

ethical issue?
Why is it so complex?
Where is the goal post?
Case:

tobacco from Malawi
Background documents:
Ruggie 2007
Ruggie 2010a
Ruggie 2010b
OECD 2010

Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich - 2010-2011

Ethics BUSI 1314 - University of Greenwich -

2010-2011

Company

What are you selling your customer? Is there more to the product than just the product?

BUSI 1314 - University of Greenwich -

2010-2011

Human Rights

United Nations 1948

States have responsibilities towards their citizens

Ethics BUSI 1314 - University of Greenwich -

2010-2011

Human Rights

State-based = national

Corporations = international

?

Lack of international law & regulation

More obvious for more obvious crimes: murder, theft

Less obvious for less obvious crimes: labour standards, respect, equity

Greenwich - 2010-2011

goal post?
Wim Vandekerckhove - Business Ethics BUSI 1314 - University

of Greenwich - 2010-2011

John Ruggie
(Harvard)

UN Global Compact:
Got corporations ‘on board’ with regard to human rights

UN Secretary General’s
Special Representative
For Business and Human Rights

Greenwich - 2010-2011
Source: Ruggie (2010a)

University of Greenwich - 2010-2011

not contributing to abuse by its own actions, but solely

by the link to the goods or services it produces, then

Is the supply chain entity crucial? (numerical thresholds are irrelevant)
Does the company have leverage:
Direct control?
Terms of contract?
Proportion of the business it represents?
Ability to incentivize for improved performance?
Reputational benefits of maintaining the link?
Ability to engage other enterprises?
Ability to engage local or central government?

Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich - 2010-2011

Greenwich - 2010-2011
Source: Ruggie (2010a)

1314 - University of Greenwich -

2010-2011

Comp 1

Comp 2

Source tobacco from Malawi
Allegations of child labour in tobacco farming

When questioned, both answer they have no control because they buy through auctions, and do not know individual farmers.

risk management ?

5%

20%

‘we work as closely as possible with farmers, but in Malawi we are 4 steps removed’

‘we had meeting with Malawi government the past year for new market system’

‘together with ECLT we are spearheading a multistakeholder dialogue’

Agenda“, American Journal of International Law 101(4): 819-840.
Ruggie, J. (2010a).

‘The corporate responsibility to respect human rights in supply chains’ [10th OECD Roundtable on Corporate Responsibility Discussion Paper 30 June 2010]. Available at http://www.oecd.org/document/36/0,3343,en_2649_34889_46078244_1_1_1_1,00.html (Accessed 2 November 2010)
Ruggie, J. (2010b) UN Document A/HRC/14/27 (9 April 2010). Available at http://198.170.85.29/Ruggie-report-2010.pdf (Accessed 2 November 2010)
OECD (2010). ‘Updating the guidelines for multinational enterprises’ [10th OECD Roundtable on Corporate Responsibility Discussion Paper]. Available at http://www.oecd.org/document/36/0,3343,en_2649_34889_46078244_1_1_1_1,00.html (Accessed 2 November 2010)

Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich - 2010-2011