Mark Perera and I had a very interesting discussion this week with one of the firms that is recognised as a global leader in the procurement with purpose movement. We’ll have more about that shortly, but it was very timely in terms of a major issue that blew up recently.
Coffee firm Nespresso and their long-standing brand ambassador, actor George Clooney, were embarrassed, “surprised and saddened” after reports that coffee was being produced at six of its suppliers in Guatemala with the help of child labour. Clooney is very much the face of Nespresso, so the results of the investigation did not sit well with his and his wife’s (genuine) support for good causes and appropriate behaviour by business.
Channel 4 journalist Anthony Barnett was given access to farms in Guatemala, the world's 10th largest coffee producer, and film appeared to show children working for up to six days a week picking beans on plantations as well as moving heavy loads. Nespresso, which is a division of Nestlé, told CNN in a statement that it has "zero tolerance of child labour" and has launched a "thorough investigation" to identify the farms. The company said it has stopped purchases of coffee from all farms in the region until they are able to guarantee child labour is not being used.
But can any firm absolutely guarantee that their supply chain is perfect and free from issues? The Nespresso website says this.
“All of the farms in the cooperatives in this region of Guatemala are Rainforest Alliance and Fairtrade International certified. We rely on these organizations to certify compliance with all laws relating to child labor. On top of this, our 400 agronomists worldwide made 170,000 farm visits, many of which are unannounced. We will continue to engage with our partners to improve and strengthen the certification process”.
Even with all of this effort, all the resource (400 agronomists!) going into checking, there still appear to be problems. So, should we show more sympathy to firms that are trying to do the right things, while recognising that procurement with purpose in areas such as this requires constant effort, vigilance and thought? Yes, is my answer anyway, and that brings us back to our discussion this week. The company involved support many small crop producers in developing countries, even when sometimes charities and NGOs tell them that they shouldn’t use them because “they are not certified”. But the firm in question usually prefer to work with suppliers to resolve probe=lems, rather than just kicking them out.
Leaving for the moment the issue that there can be conflicts of interest (it is sometimes the charities and NGOs themselves who do the certification and are paid for that), the big firms do have a dilemma. If a customer discovers that a supplier is abusing human rights, and cancels the contract, the producer may be forced into the clutches of more unscrupulous middlemen or agents. Workers may even find themselves out of a job and forced into penury, being trafficked or even prostitution in the worst case. What would happen to the families who depend on their Nespresso business if that was suddenly withdrawn? It seems unlikely that would be good news, even for the children involved.
So, the conclusions from this – firstly, that matters are often complex when it comes to procurement with purpose, and we shouldn’t jump to conclusions. And in many cases, collaborative working with suppliers and supply chains to improve the situation in areas of concern is usually a much better idea than knee-jerk reactions and removal of “approved supplier” status.