Business Ethics 2010 Lecture 07.pptx
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Business Ethics BUSI 1314 Lecture 7 – CSR in the supply chain 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 Wim Vandekerckhove vw 01@gre. ac. uk
Due Diligence discharging your responsibilities Brings ‘soft law’ into Courts Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
Lecture 7 – CSR in supply chain 1. 2. 3. 4. • Why is this an ethical issue? Why is it so complex? Where is the goal post? Case: tobacco from Malawi Background documents: – – Ruggie 2007 Ruggie 2010 a Ruggie 2010 b Business Ethics OECD 2010 Wim Vandekerckhove -of Greenwich BUSI 1314 - University 2010 -2011
1. Why is this an ethical issue? What are you selling your customer? Is there more to the product than just the product? supplier Company supplier Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
2. Why is it so complex? Human Rights United Nations 1948 States have responsibilities towards their citizens States allocate responsibilities to various actors: e. g. Citizens, Professional bodies, Corporations through laws & regulation Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
2. Why is it so complex? (cont) Human Rights More obvious for more obvious crimes: murder, theft Less obvious for less obvious crimes: labour standards, respect, equity ? Lack of international law & regulation State-based = national Corporations = international Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
3. Where is the goal post? 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 clarify ‘sphere of influence’ and ‘due diligence’ Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
Source: Ruggie (2010 a) Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
Source: Ruggie (2010 a) Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
3. Where is the goal post? (cont) If a company is 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: a) b) c) d) e) f) g) 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
Source: Ruggie (2010 a) Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
4. Case: tobacco from Malawi Comp 1 Comp 2 5% 20% 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 ? ‘we support ECLT’ $7 million ‘we work as closely as possible with farmers, but in Malawi we are 4 steps removed’ ‘we support ECLT’ (no amount) ‘we support TLC’ ($14 million) ‘we had meeting with Malawi government the past year for new market system’ ‘together with ECLT we are spearheading a multistakeholder dialogue’ Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
References Ruggie, J. (2007). ‘Business and Human Rights: The Evolving International Agenda“, American Journal of International Law 101(4): 819 -840. Ruggie, J. (2010 a). ‘The corporate responsibility to respect human rights in supply chains’ [10 th 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, 00. html (Accessed 2 November 2010) Ruggie, J. (2010 b) 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’ [10 th OECD Roundtable on Corporate Responsibility Discussion Paper]. Available at http: //www. oecd. org/document/36/0, 3343, en_2649_34889_46078244_1_1, 00. html (Accessed 2 November 2010) Wim Vandekerckhove - Business Ethics BUSI 1314 - University of Greenwich 2010 -2011
Business Ethics 2010 Lecture 07.pptx