05 June 2008
Buyers should look after their suppliers in developing countries if they want to increase productivity, according to a CSR expert.
David Ford, head of corporate social responsibility at industrial equipment supplier Alfa Laval, said helping vendors in low-cost countries is a big issue and buyers must make a difference to factory workers.
Speaking at the launch of a responsible purchasing report produced by CIPS and development charity Traidcraft, Ford said: "Paying an extra penny for a product can change a supplier's environment for a year. You can get rid of dysentery by putting in water purification and it costs peanuts. You let the workers take home the water and they will come in tomorrow - increasing productivity. If they give the water to their children, you're doing something for society."
He argued the more inspections purchasers carry out, the more compliant and productive suppliers will become. He also said buyers should not rely on documents from third party auditors to learn if a supplier is operating ethically, unless they know them well.
Adam Swan, commercial director, fish and seafood at food services firm Brakes, agreed and said firms must visit suppliers in person if they are to help them develop. He explained how Brakes helped to improve the lives of workers and production rates after conducting an audit on a prawn supplier in Bangladesh.
According to Ariane Thomas, purchasing director, supply chain at L'Oréal, the behaviour of buyers must be in line with company policy on vendor management. "Buyers must be shown from the start how to get the best innovation from suppliers, manage risk, use best buying practices and conduct social audits," she said.
Alex González, fair and ethical trade policy advisor at Traidcraft, said the report highlighted some important issues for purchasers. "Buyers must know it is workers at the supply end, not robots. They don't want to be responsible for a working environment, community or family breaking down," she stressed.
The report, Taking the lead - a guide to more responsible procurement practices, noted six best practice responsible purchasing techniques. These include assessing the impact of decisions on the supply chain and implementing higher sustainable standards in buying activity.
It also urged purchasers to build more intimate relationships with vendors and manage risk through greater transparency.
The guide also includes case studies from global organisations such as clothing firm Gap. One example from Barclays explained how the bank introduced a fair wage programme, which improved the living standards of its contract cleaners across the UK.