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Blog | Friday March 9, 2018

How Do You Empower 100,000 Women?

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In 2014, ANN made its 100,000 Women Commitment: a commitment to empower 100,000 women working in its global supply chain. Through a strategic partnership with BSR’s HERproject, ANN achieved this milestone in 2018.

Christine Svarer, Director of HERproject, sat down with Jeanette Ferran Astorga, Vice President, Corporate Responsibility at ascena retail group, parent company of brands Ann Taylor, LOFT, and Lou & Grey, to discuss the rationale behind the commitment, its impact, and next steps.

Christine Svarer: Can you tell us a bit about how your 100,000 Women Commitment came about?

Jeanette Ferran Astorga: Absolutely. Our commitment, and our partnership with HERproject, was driven by our core values as an organization. From our corporate leadership on down, we believe every woman deserves a chance to be her best self every day, and we’ve been clear about how important it is to us to help women have the confidence to shape their lives in the way they want.

We aim to give women confidence through fashion and inspiration, but that must be matched by standing with and supporting the women in our supply chain. When we discussed how to do this, we realized that empowering women with knowledge of and access to services around health was a critical step, so we decided to commit to HERproject, BSR’s flagship women’s empowerment initiative. We were drawn to the peer-to-peer training model that enables women employees to acquire and share knowledge and skills. We also liked that HERproject brings together companies, their suppliers, and local partners to deliver workplace-based trainings focused on increasing women’s knowledge and self-esteem, while also strengthening management systems to create inclusive workplaces.  

Svarer: Shared values, like a shared goal, are so critical for a strong partnership—at least in our experience. And it was clear from the start that our values aligned. We know that when women working in supply chains have the confidence and ability to shape their lives through choices they value, they can be a huge positive force for change.

Ferran Astorga: Exactly. And it’s important to flag that none of this would have been possible without a similar shared belief in empowering women. Before we started, we consulted our strategic suppliers and confirmed that we would have their support to make this happen, as they needed to make the commitment to allow time for training and to support staff toward becoming peer educators, who would then bring the curriculum to their colleagues. Overwhelmingly, we found that our suppliers wanted to be part of HERproject.

As this commitment to supporting women in our supply chain has developed, it’s been amazing for us to see how our suppliers have found their own ways to spark employee engagement. HERproject gives suppliers the framework and the guidance for the trainings, but the suppliers have really stepped up in terms of customizing the programs to meet their employees’ needs, whether through health fairs, or having local doctors come in and run health clinics, or nutritional sessions for men and women. That’s a mark of success for us—that the suppliers have made it their own.

Svarer: I really like the connection from the corporate level to vendors, suppliers, and on to women workers. That really aligns with our belief at HERproject that for women’s empowerment to take hold—but also to create resilience in global supply chains—everyone must pull in the same direction.

Ferran Astorga: I agree. Another way we try to ensure that alignment is through embedding performance in this program into our vendor scorecards. Our vendors are assessed on how they are driving the initiative and how they are supporting the peer educators; we measure it as part of their commitment to management systems and improved workplace practices. That’s part of our effort to go beyond compliance and develop leading practices.  

Svarer: Absolutely—and we’re seeing other companies tying their commitment to women into how they work with their suppliers. What has been central to our work with you is that you have made women’s empowerment part and parcel of good business.

Ferran Astorga: That’s certainly our vision—and it means looking at our policies, as well as our programs. Earlier this week, we published a revised Code of Conduct for merchandise suppliers for the ascena retail group, which includes ANN’s brands. On two occasions in the last few years, we worked with BSR to revise this code through a gender lens, ensuring that specific challenges and obstacles that women face are incorporated into our expectations of suppliers. We have just launched the latest version of the code this week in line with International Women’s Day with a pronounced reference to supporting women in the workplace, especially informed by the UN Sustainable Development Goals and a commitment to SDG 5.

Svarer: I think that revising your Code of Conduct twice over the course of this partnership highlights not just your commitment but also how ANN continues to improve its ability to empower women within its supply chain. ANN has continued to learn and improve throughout this partnership—as have we at BSR and at HERproject.

The longer-term nature of ANN’s commitment is critical in this respect. Empowerment is not achieved overnight, so it’s been such a privilege for us to work with a partner like ANN that is in it for the long haul.

Ferran Astorga: I agree. And our work is not done. We’re continuing to work with HERproject to explore new ways to reach and empower the inspiring women who work in our supply chain, and we will be sharing more later this year. Stay tuned!

Case Studies | Friday March 9, 2018

Empowering 100,000 Women in ANN’s Global Supply Chain

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Through its work with BSR and participation in BSR’s HERproject, ANN, parent company of Ann Taylor, LOFT, and Lou & Grey, was able to set—and achieve—its commitment to empower 100,000 women in its global supply chain community between 2012 and 2018.

The Challenge

ANN is a purpose-driven company that aims to help women “put their best selves forward every day.” Women comprise more than 70 percent of ANN’s supply chain labor force, and company leaders recognized this opportunity to help improve the lives of those women who are manufacturing their products.

ANN therefore set out to deepen its investments in women’s empowerment in supply chains. ANN started its partnership with BSR’s HERproject in 2012. Following discussions between BSR and company leaders, in 2014, ANN made its pioneering 100,000 Women Commitment, through which the company committed to empowering 100,000 women working in its global supply chain community.    

Our Strategy

BSR worked with ANN’s Corporate Responsibility team to design and implement a strategy to realize its bold commitment.

The first pillar of this strategy was a deepened investment in HERproject—BSR’s flagship women’s empowerment initiative, which uses peer-to-peer training to enable women workers to acquire and share knowledge and skills on health and financial literacy. HERproject brings together international companies, their suppliers, and local partners to deliver workplace-based trainings that increase women’s knowledge and self-esteem, while also strengthening management systems to create inclusive workplaces. ANN expanded its work with HERproject to include 58 factories in China, India, Indonesia, Vietnam, Bangladesh, and the Philippines.

In addition, through this partnership, ANN was instrumental in designing and implementing a new iteration of the HERproject platform, the “HERnetwork” methodology, implemented by “HERtoolkit.” HERnetwork and HERtoolkit were created to train local NGOs on the HERproject, allowing them to implement HERproject programs independently. Through the HERtoolkit, we were able to increase the reach of the trainings to women that would not have otherwise had access to these programs, and work toward sustaining the program as another resource for factories to use to reach the women.

Importantly, ANN became the first U.S. women’s specialty retailer to commit to the UN Women’s Empowerment Principles (WEPs)—seven principles that provide a holistic framework to empower women in the workplace, marketplace, and community. ANN committed to integrating these principles into its responsible sourcing practices to ensure its supply chain supports women. In 2018 ANN, under the umbrella of the ascena retail group, launched a revised Code of Conduct for suppliers that incorporates a gender lens, which ensures that specific obstacles that women workers face are incorporated into the company’s expectations of suppliers.

Our Outcomes and Impact

In March 2018, ANN announced that it had achieved and surpassed its 100,000 Women Commitment earlier than expected.

Through the widescale implementation of HERproject across six countries, more than 2,800 peer educators were trained, which led to a sharing of knowledge and skills with more than 104,000 women.

These outcomes led to impressive results for workers in ANN’s supply chain. Specifically, ANN and HERproject have measured the following:

• A 38 percentage point increase among women that have performed a self-examination to recognize symptoms of breast cancer
• A 26 percentage point increase among women in the use of sanitary napkins rather than scraps of cloth from the factory
• A 25 percentage point increase among women in awareness that HIV can be prevented
• A 50 percentage point increase among individuals in the feeling that they will be able to meet their families’ future expenses in the next two years

In addition, the 100,000 Women Commitment has helped suppliers of ANN improve their performance. ANN and HERproject have measured a 4.5 percentage point decrease in turnover and a 22 percentage point decrease in products requiring rework, signaling stronger efficiency and accuracy in products made by these women across 37 factories in six countries.

ANN also engaged its customers in this effort by communicating in stores, multimedia, and through a microsite about the ongoing success of the project.

Lessons Learned

The 100,000 Women Commitment demonstrated the motivating power of a bold commitment. Such a commitment enabled ANN to mobilize its key stakeholders and ensure continued investment in its supply chain women’s empowerment programs.

The implementation of the commitment also reinforced the power of the peer-to-peer methodology for reaching large numbers of women workers in global supply chains.

Finally, the project highlighted how investing in women generates positive returns—for women, their families, and their communities. The positive impacts on women’s health and financial behavior were also mirrored by positive business impacts for suppliers. HERproject gives suppliers the framework and the guidance to share knowledge on healthcare and financial literacy with their workers. The suppliers have taken ownership of the program by customizing it to meet their workers’ needs, whether through health fairs or having local doctors come in and run health clinics or nutritional sessions for men and women. As a result, ANN has strengthened its relationships with its suppliers and developed a model for generating systemic improvements for workers in global supply chains.   

Blog | Thursday March 8, 2018

On International Women’s Day, Let’s Press for Progress in Global Supply Chains

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Over the past several months, we have seen unmistakable evidence that women around the world continue to face mistreatment. On this International Women’s Day, let us commit to use these stories to strengthen our resolve to ensure that women—and men—everywhere are empowered to create workplaces, communities, and societies in which women can thrive and be treated with respect.

Last week in Bangladesh, we visited sites of HERproject, a BSR collaborative initiative to empower low-income women working in global supply chains. In meeting with partners and speaking with women working in the country’s apparel sector, we saw firsthand the promise of business action to promote women’s health, financial literacy, and autonomy.

HERproject was launched just over 10 years ago, in recognition of the fact that there was a massive opportunity to not only make sure that the vast numbers of women working in global supply chains have basic legal protections, but also that they can become agents of change for themselves and their peers. We are proud that in the past decade, HERproject, working in collaboration with dozens of local partners inside the supply chains of more than 60 global apparel and agricultural companies in more than 700 workplaces, has empowered more than 800,000 women.

Our travels through the endless sprawl of Dhaka allowed us to spend time with the women who are making HERproject a success. In one apparel factory we visited, we saw the training of 40 peer educators in a factory that employs 5,000—training that will enable them to help their colleagues access health care. Tapoty Roy, a line supervisor and peer educator who has worked in the garment sector for the last 15 years, proudly told us how she has become a valued resource for the 60 women she oversees. "They come to me and ask for support with work or their home life, and they know I will help.” The information transmitted through the program enables women to reduce absences, keep newborns healthy, and build confidence and pride that strengthens both their personal and professional lives.

And the program’s benefits are not just for women. Sweet Begum, another factory worker who invited us to her house, introduced us to her son-in-law, who explained that he is using what he learned from Sweet Begum to train the men in the factory where he works.

These stories and many others demonstrate HERproject’s premise: Women in global supply chains represent a powerful force for change that can help ensure that global trade delivers human progress. Through coordinated action in global supply chains, we can stand with these women as they improve their lives and the lives of those around them.

In a sector that employs millions of women, often in difficult working conditions and societies that struggle to ensure public health, there is much left to do. Systemic barriers to women’s financial autonomy, access to health care, and gender-based violence are all too often a reality. Moreover, women working in global supply chains are subject to additional challenges, as exemplified by the statistics that indicate that Bangladeshi garment workers face far higher levels of sexual harassment and violence than the reported national average in Bangladesh.

The example of the women we met in Bangladesh the past few days is inspiring. One peer educator in Gazipur explained matter-of-factly that she makes sure that all 60 of the women in her line in the knitwear factory implement everything she’s learned from the HERhealth training. Thanks to her and the thousands of other peer educators HERproject has worked with, hundreds of thousands of women have seen the possibility that better information, opportunities, rights, and conditions can bring to their lives.

But they will only fully succeed once their leadership is supported by their colleagues, family, and supervisors—as well as the companies for which they produce.

We firmly believe that if all players across global value chains—buyers, suppliers, customers, women, and men—#PressForProgress, we can achieve a future where employment and empowerment go hand-in-hand for women workers, and where an empowered female workforce is widely recognized as a driver for business success.

On this particular International Women’s Day 2018, the need for action has never been clearer. As we have seen in stark terms through the #MeToo and #TimesUp movements, there is a need to do far more to ensure that women are treated with respect and fairness, both within and outside the workplace.

This means more companies need to stand up and say, “We too will champion the rights, needs, and equal opportunities of women—not only in our headquarters, but across our supply chains.” In this context, we look forward to collaborating with you this year to empower even more women around the globe.

Blog | Monday March 5, 2018

Managing Supply Chain Water Risk: New Capacities for New Challenges

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In 2016, the ICT industry came under focus when environmental inspections found that 18 centralized water treatment plants in Shanghai had issues with heavy metals exceeding legal limits. As a result, the two large-scale electronics plants responsible for releasing these pollutants are in the process of being forced to stop operations. More recently, the Chinese government shut down an estimated tens of thousands of factories in 2017 as part of its broad efforts to more strictly enforce environmental regulations.

Incidents like this have put the spotlight on supply chain operational risks, prompting brands to pay more attention to the Institute of Public and Environmental Affairs (IPE) Corporate Information Transparency Index (CITI)—in particular IPE’s CITI Index Indicator 2.3, which focuses on issues around centralized wastewater treatment. Brands like Apple, Dell, Ericsson, and Foxconn have mapped their suppliers’ paths of wastewater discharge, incorporating suppliers’ centralized wastewater treatment facilities into the scope of their environmental compliance screening.

Last November, Dell and BSR invited a range of stakeholders to a roundtable in Suzhou, China, to explore how to address shared water issues in the Tai-hu Lake catchment area. Two important principles provided the foundation of this meeting: first, that water scarcity is a risk that needs to be managed to ensure supply chain sustainability. And second, that water is a common good with multiple competing interests. A growing movement of companies and international initiatives are specifically targeting water resource management as a key component of supply chain sustainability. 

It has long been recognized that water scarcity will be a defining issue of the 21st century. Climate change, population growth, and competing demands on limited water supplies have all contributed to water increasingly becoming a focus for supply chain sustainability. A study conducted by McKinsey found that 90 percent of air, soil, and land impacts associated with consumer goods are associated with supply chains.

Traditional approaches to managing the environmental risks of supply chains have taken one of two forms:

• Product stewardship focuses on reducing environmental impacts associated with product design, packaging, and material use.
• Process stewardship takes a life cycle approach to managing impacts associated with the production, distribution, and end-of-life product management.

Both approaches help companies identify how to manage risks, reduce impacts, and identify important cost savings. Today, increased transparency and disclosure requirements in places like China are underscoring the need for companies to better manage their water resources.

This has been highlighted by the UN Global Compact’s CEO Water Mandate, which recognizes the need for companies to engage on water issues through their direct operations, supply chains and watershed management, public policy advocacy, community engagement, and transparency.

By initiating discussions in the Tai-hu Lake catchment area, Dell has taken the next step in managing these risks more holistically. Going beyond product and process stewardship, the company is now dealing with the broader risks to its supply chain associated with watershed management. This type of environmental stewardship has been traditionally led by governments and requires more skills, tools, and resources than companies have traditionally used in product and process stewardship.  

Ultimately, managing water scarcity will require businesses and their suppliers to:

• Broaden the scope of risks in their supply chains to include water scarcity, floods, and related issues.
• Move from short-term thinking to managing risks over longer time horizons.
• Develop capacities in watershed management, stakeholder outreach, and public policy advocacy.
• Develop risk monitoring systems and capacities within their supply chains.
• Share risk information with other stakeholders in a watershed, including potential competitors.

Responding to this challenge not only addresses the broader concern of water scarcity, it is also addresses the fundamental ability for a company like Dell to continue to operate. This extends to the needs of suppliers’ employees and their families living in affected watersheds.

The challenges of water scarcity will require businesses to expand their supply chain sustainability efforts to include the notion of shared risk over longer periods of time. Dell has started the process of managing this shared risk through its stakeholder consultations with other water users in the Tai-hu Lake catchment area in China.

At BSR, we will continue to work with our members to identify the strategies required to respond to the ever-increasing set of global challenges that demand collaboration and innovation. Contact us if you’d like to learn more about how we can work with you on water and supply chain sustainability management.

Blog | Wednesday February 28, 2018

Collaboration: How Business Must Lead to Achieve Sustainable Development

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How does business lead?

When we think of leadership, we often think of a single, iconic leader. We celebrate leading companies for their bold actions on sustainability risks and opportunities; yet one of the most important ways business leads is through collaboration.

In the past year, it has become increasingly clear that the world is changing fast—and profoundly. We are faced with challenges like catastrophic climate change, increasing inequality, and the rapid emergence of new technologies that are disrupting societies and raising new, fundamental ethical questions. These are not new phenomena, but the pace and scope of change is picking up. These challenges also come at a time when established governance models are being questioned—or outright failing—which makes new leadership constellations all the more necessary.

In partnership with The Rockefeller Foundation, today BSR is launching a new report, Private-Sector Collaboration for Sustainable Development. This report is based on the premise that business must take a leadership role through collaboration, both to ensure the future of sustainable business and for the benefit of society as a whole. As we look to meet the UN’s Sustainable Development Goals (SDGs) and implement the Paris Agreement on climate change, it is clear that we must transcend the status quo of individual action to foster collaboration for impact at scale. We must mobilize, leverage, and direct the transformative power of business’s collective resources and capabilities toward these ends.

We need more business collaboration, but what we need most are well-designed, well-governed, accountable, and impactful collaborations. This report is a contribution in that direction. It sets out to identify the key success factors for collaboration and provide concrete guidance to business leaders on impactful collaborations. It has been informed by the rich experiences and thoughtful perspectives of practitioners from many parts of the private sector as well as insights from civil society organizations that have worked closely in partnership with companies.

Collaborative leadership has been a fundamental tenet of BSR’s 25 years of work to create a just and sustainable world. Our strategy emphasizes the need to ideate, design, and explore—and subsequently accelerate and scale—powerful collaborations that yield transformational change. We believe that the time is right to pursue such opportunities vigorously, aggressively, and with focus. We have written this report to provide guidance that we hope will encourage more businesses to engage in collaborations—and help them do so more successfully.

For The Rockefeller Foundation, building strategic partnerships is a core component of our strategic approach. We believe that creating coalitions that engage the full range of actors across a given system—from the private sector to government to civil society—can accelerate breakthroughs that deliver impact at scale. We hope that this guide to engaging the private sector in designing and implementing high-impact collaborations for sustainable development will serve as a catalyst for the next generation of transformative results.

We will only succeed in achieving the SDGs if we truly work together, combining our capabilities, resources, and assets. We invite you to join us to create shared solutions to global challenges—to lead through collaboration.

Reports | Wednesday February 28, 2018

Private-Sector Collaboration for Sustainable Development

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Why Read This?

In the past year, it has become increasingly clear that the world is changing fast—and profoundly. We are faced with challenges such as catastrophic climate change, increasing inequalities, and the rapid emergence of new technologies that disrupt societies and raise new, fundamental ethical questions.

To tackle these challenges, we must transcend the status quo of individual actions to foster collaboration for impact at scale. We need well-designed, well-governed, accountable, and impactful collaborations.

Drawing on BSR's 25 years of experience in designing, implementing, and scaling collaborative initiatives, this report identifies the characteristics of successful collaborations and helps companies better understand how to prepare for and contribute to their success.

Blog | Tuesday February 27, 2018

Next-Generation Private-Sector Collaboration for Sustainable Development: Q&A with Gavi

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This blog is part of a series of interviews on how the private sector contributes to sustainable development through collaboration. It is adapted from an interview with Moz Siddiqui, manager of global operational partnerships and health innovation at Gavi, as research for Private-Sector Collaboration for Sustainable Development, a new report from BSR and The Rockefeller Foundation.

BSR: What is Gavi, and why was it established?

Moz Siddiqui: Gavi, the Vaccine Alliance, is an alliance of UNICEF, the WHO, the World Bank, donors, recipient countries, civil society, the pharmaceutical industry, and other private-sector companies. It was established in 2000 to address declining coverage rates of vaccines and the huge disparity in access to vaccines for preventable diseases in the world’s poorest countries.

In 1998, the WHO, the WEF, UNICEF, health ministers, and the pharmaceutical industry convened to understand why children were still dying from basic preventable diseases. They realized that the key issue was affordability. At the time, sovereign donors supported states directly, and there was no coordination around vaccines. It became clear that solving the issue of vaccine affordability and access would require collaboration between the private and public sectors. In 1999, challenged by Bill and Melinda Gates, key UN agencies, leaders of the vaccine industry, representatives of bilateral aid agencies, and major foundations agreed to work together through a new partnership: Gavi was seeded.

BSR: How does Gavi work, and what have been your key achievements?

Siddiqui: Gavi believes that through vaccinations, one can build healthy societies and economies. Our model is to address the disparity in access to vaccines by aggregating and pooling the collective demand for vaccines in almost 70 countries. Gavi purchases vaccines and thus provides long-term, predictable demand for them. It ensures the appropriate supply of quality vaccines by minimizing their cost and ensuring that the highest quality requirements are met.

To date, thanks to its purchasing power, Gavi has been able to reduce the price for 10 essential vaccines (such as Hepatitis B and Measles) from US$950 to US$35. We’ve enabled vaccinations for 680 million children worldwide, and we’ve reached US$80 to US$100 million in economic savings through Gavi’s purchasing power, resulting in a knock-on effect of US$350 billion of economic savings.

BSR: How has Gavi evolved along the way?

Siddiqui: Over the years, Gavi has been able to scale and grow. But more essentially, Gavi has become a market creator and a market shaper. It is one thing to ensure an appropriate supply of vaccines in a country, but it is another to make sure that appropriate institutions and systems are in place to allow for products to be redistributed and reach the point of care. Gavi does that.

The Alliance has evolved into a collaboration that goes beyond ensuring the supply of affordable vaccines in developing countries to one that strengthens healthcare systems. This was enabled by understanding the role that the healthcare system plays in health. Very early on, Gavi realized that it was not enough to ensure access to products and “hand them over the fence,” but that there were systemic challenges for healthcare systems in low-income countries.

BSR: What are Gavi’s key success factors?

Siddiqui: First, it’s about governance and collective decision-making: Multistakeholder collaboration is in Gavi’s DNA, with very different actors coming together and engaging in collective decision-making. Second, it’s about acknowledging each organization’s core competencies: Gavi is a curious mix of public-sector, civil society, private-sector, and sovereign donors. The fact that the alliance has existed since 2000 is a testament to how well they acknowledge and leverage each other’s core strengths.

Third, it’s about creating shared value: Gavi is really good at aligning the incentives of different actors and providing market-based solutions. Recipient countries are the primary drivers of the collaboration. They pay a share of the cost of their Gavi-supported vaccines, and as a country’s income grows, its co-financing payments gradually increase to cover the full cost of its vaccines.

Predictable, long-term donor support is another cornerstone of our model. It provides the security for countries to adopt vaccine programs. It also makes it possible for manufacturers to make new investments in production capacity. As we purchase for 60 percent of the world’s birth cohort, Gavi has shaped the vaccine market for wider societal gain, too.

BSR: What would be the ultimate success for Gavi?

Siddiqui: Our vision is to immunize one billion children by 2020, saving millions of lives from preventable deaths. In order to do this, we need to build resilient heath systems and markets. So that we can continue focusing our efforts on the very poorest countries, it is our goal to transition 20 countries that have passed the benchmark of US$1,580 GNI per capita out of Gavi’s support and have them fully fund their vaccine purchases themselves by 2020.

To ensure vaccines are distributed to areas where they are needed the most, health systems strengthening is required. Therefore, as an Alliance, we need create resilient health systems by addressing not only pricing, but also public health infrastructure, and we must continue to empower partner countries to accelerate their work.

Case Studies | Tuesday February 27, 2018

The Maritime Anti-Corruption Network: Argentina Collective Action

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The Maritime Anti-Corruption Network (MACN) is a global business network working toward the vision of a maritime industry free of corruption that enables fair trade to the benefit of society at large. The network promotes good corporate practices through the MACN Anti-Corruption Principles and collaboration with key stakeholders, including governments and international organizations, to identify and mitigate the root causes of corruption.

As one of its efforts, MACN pursued a collective action in Argentina, which resulted last year in the successful adoption of a new regulatory framework for dry bulk shipping that reduces corruption risks for the industry and elevates the country’s culture of integrity.

The Challenge

In 2014, MACN recognized through its anonymous incident reporting mechanism frequent recurring reports of financial demands made during the vessel clearance process in Argentina.

Every cargo ship entering Argentine waters must pass certain inspections, including those carried out by the Servicio Nacional de Sanidad y Calidad Agroalimentaria (SENASA), the government agency that guarantees the quality and healthiness of Argentine agricultural products. SENASA performs an important regulatory function. However, several problematic incentives converged to undermine the integrity of the system:

1. Inspections were at the discretion of the inspectors and not objective, as the criteria for rejecting a hold were unspecified and unclear.
2. Failing an inspection was costly, since it meant ships were considered off-hire. Depending on market conditions, port costs and commercial delays accrued from each extra day in port could amount to more than US$50,000 per day.
3. Inspections were recorded with paper records, which made data aggregation difficult or impossible.
4. The system lacked a reliable appeal or reporting mechanism to allow companies to seek redress for alleged non-compliance.

Together, these conditions facilitated bribery (where ships in bad condition would pay to obtain clearance) and commercial extortion (where officials would not provide clearance to ships in good condition without a facilitation payment). 

Our Strategy

To address this challenge, MACN sought to understand the root causes and devise solutions with a coalition of champions. MACN and local partner Governance Latam, in collaboration with other industry stakeholders, catalyzed a collective action program to investigate the root causes of the problem and support SENASA in reforming its procedures to tackle systemic corruption.

MACN and Governance Latam first interviewed more than 40 ship owners (MACN members), port agents, private surveyors, public inspectors, maritime lawyers, maritime insurance officials, representatives of grain houses, and public officials from the maritime sector. These interviews established that a mid-level public-private network of individuals was responding to a corruption-drive incentive structure. As a result of this dialogue, MACN defined the objective of the project as the modernization of the inspections system to be less discretionary, more transparent, and more accountable.

MACN and Governance Latam developed a broad coalition to develop and agree on the key points for a new system that would be both integrity-oriented and feasible, balancing the commercial interests of multiple stakeholders in the context of a process that remains critical to Argentina’s foreign trade.

In parallel, we also prepared for the implementation phase, seeking funding to support training and the development of communication materials to inform stakeholders of the new practices.

Our Outcomes and Impact

Following a series of public consultations on the new regulation, MACN’s collective action resulted in a new regulatory framework in Argentina that reduces discretion in the inspection of holds and tanks, establishes a system of cross-checks to increase integrity, provides an escalation process when disputes occur, and creates an e-governance system to underpin the framework. Inspections will be conducted by registered private surveyors, and, in case of conflict, bulk carriers will be able to request supervision of these inspectors from SENASA.

Moving to a system of inspections primarily conducted by private surveyors has great potential to reduce solicitation and extortion, as incidents may be resolved in an expedited fashion. Facing an improper demand from a private surveyor, a vessel’s master or its local agent can simply call the surveyor’s office, report the incident, and request intervention by SENASA, making the private inspector and its employer subject to sanctions and even disbarment.

MACN believes that these changes will increase the efficiency, integrity, and transparency of inspections, reducing the possibility of ship delays for unclear or unfounded reasons and facilitating the smooth passage of vessels to the benefit of frontline crew, global trade, and the Argentine economy.

Since implementation of the new system, MACN has provided information to industry, inspectors, and other stakeholders explaining the changes, including hotline contact details. Thanks to funding from the A/S D/S Orient's Fond, Governance Latam has also provided training to more than 400 local industry, private-sector, and public-sector stakeholders, and the course has become official government training material for SENASA staff.

Lessons Learned

To effectively address corruption from country to country, we have learned that it is critical to recognize different interests and drive ownership for sustainable change. The following lessons in particular stand out:

• Understand how corruption works in specific instances by answering questions like these:
  • Who is actually getting the illegal payments, and for doing what?
  • What are the economic drivers of the corruption scheme?
  • How do incentives work for each stakeholder?
  • Why has the corrupt scheme endured?
• Understand the good-faith commercial interests of each group of stakeholders, as well as the operational and practical limitations to regulatory change.
  • Commercial incentives and operational practices may be as or even more important than legal risks in determining the stakeholders’ behaviors.
  • The pursued reform should therefore be business-driven as well as integrity-driven: It should make sense in the context of business, either by making it easier or less costly for the stakeholders involved to do business.

Further, once the above facts are established, a successful anti-corruption initiative requires a coalition of the willing and local ownership from government, civil society, and local business networks. Companies are just one part of a larger system, and the entire system needs to be engaged in the process for change—raising the bar on efficiency, integrity, and good governance.

Finally, while local ownership is critical for implementation, support from international headquarters is essential to ensure that all business partners are aligned on expected integrity practices, from the maritime companies, port agents, and inspectors to the cargo owners whose products are being shipped around the world.

MACN’s work in Argentina is a model example of how stakeholders can work together to successfully combat corruption for the benefit of society at large.

Blog | Wednesday February 21, 2018

Collaboration for Impact: A Conversation

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This blog is the first in a series of interviews on how the private sector contributes to sustainable development through collaboration. It is adapted from a roundtable conversation conducted as research for Private-Sector Collaboration for Sustainable Development, a new report from BSR and The Rockefeller Foundation. 

Dominic Kotas: What is important for you when you consider joining a sustainability collaboration?

Chiel Seinen: For me, it is important that there is clarity. I can only sell it to the top of the house if there is a clear purpose, objective, and timeframe. I need to know when it would be a success, and I need a mandate; otherwise, failure is guaranteed, if you ask me. A clear vision, mission, timeframe, and objectives are 99 percent of the battle.

Moira Oliver: I think you also need to have some clear deliverables in the short, medium, and long term, otherwise people will just see it as a nice idea but with no real practical impact. Is it worth their time and investment if it is not going to deliver some actual impact for their business?

Seinen: I agree. You can of course have an open-ended working group, so to speak, but then at least you need to know what will be delivered, and whether there is a moment to evaluate and potentially exit or disband the collaboration.

Kotas: And what makes collaboration work over time?

Eric Anderson: When I look at potential collaborations, I like to think: Are we covering the ‘why,’ the ‘what,’ and the ‘how’ of this issue? It feels like the ‘why’ is covered if you have a clear purpose, as you mentioned. When it comes to the ‘how,’ as Moira said earlier, the governance is probably the most critical part in ensuring that we can work together.

In terms of the timeframe, I think that the ‘why’ gets you to the starting blocks, and the ‘what’ might get you into the first year. But actually delivering successful outcomes is all down to the ‘how.’

Yukako Kinoshita: The governance is important, I totally agree with what you have said, because I think there is also the issue of competition to resolve. At the end of the day, you will be working with your competitors, and good governance is what resolves that tension; it makes us feel safe working together.

Oliver: In addition, if you do not have a stakeholder in there who everyone regards as key, that can have a real dampening effect. So it depends a little on who you have within that group of early adopters.

Kotas: How does that evolve? Do you want to see a collaboration grow the number of members?

Kinoshita: I think there is a risk that as you gain more members, you lose the action and impact, and the collaboration becomes more of an information exchange platform. When you have a very small group, you have a specific purpose and you can make an impact.

Anderson: Yes, completely. As I mentioned earlier, if you have an emerging issue that you want to lead on and really drive, my belief is that you can have more impact by convening a smaller group that moves independently to a certain point. Then, when you are ready to scale, you will have a strong business case to share.

Oliver: For me there is also growth in terms of the agenda and maturity. Even if an initiative has been running for a long time, what I really want to see is that it adapts and moves on to another level; that it does not just stay static in terms of its agenda.

Kotas: And what are your views on the future of private-sector collaboration?

Kinoshita: I am quite positive because of the SDGs—everybody is talking about them, and you feel like you can collaborate.

Anderson: I think there will be more collaboration in the future, but I think it might be more bespoke, issue-focused collaboration.

Seinen: My vision is that collaboration will be fully integrated into the way we run projects and the way we run business. And I think that while we will collaborate across geographies, not everything needs to be solved at a global level.

Anderson: I agree. We’ll need global perspectives, but the action will be increasingly tailored to local contexts.

To learn more about this topic and the upcoming report, please register for our Sustainability Matters webinar on February 28.

Blog | Tuesday February 20, 2018

Assessing Suppliers: Inclusive Business or Business as Usual?

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Many companies are beginning to evaluate their suppliers based on their social and environmental impacts, both positive and negative. Particularly when assessing suppliers’ claims to have a social impact through employment, it can be difficult to determine whether a supplier is an inclusive business, or just doing business as usual.

In January, the Global Impact Sourcing Coalition (GISC) visited one of our members’ operations in Kingston, Jamaica to learn from its approach to inclusive employment. Sutherland is a process transformation company whose services include contact center management. Like other members of the GISC, Sutherland has grown its operations through intentionally hiring and providing career development opportunities to people who otherwise have limited prospects for formal employment, thus reducing social inequality and contributing to the Sustainable Development Goals to provide employment and decent work for all.
 

Graduates from Sutherland Global Services’ Community Technology Centre in Kingston, Jamaica. Photo credit: Sutherland Global Services.

Our tour of Sutherland’s investments in inclusive employment in Jamaica demonstrated how inclusive suppliers are distinguished by three traits.

1. Intentionality: Inclusive businesses do more than just hire people from disadvantaged backgrounds. They do it with intent, assessing what barriers vulnerable populations have in securing employment and deliberately removing those barriers through their application and onboarding processes. They assess how they might best source new workers from their communities and set goals to improve their diversity and inclusion.
   
   For example, Sutherland supports a network of Community Technology Centers (CTC) in Jamaica to train young adults in at-risk communities in the hard and soft skills they need to secure their first job in a modern workplace. When the company evaluated how to improve the impacts of the program, it decided to make a commitment to ensure that at least 10 percent of CTC graduates find employment. As a result of this pledge, participation in the program spiked, and the company now benefits from a new pipeline of qualified, enthusiastic employees who would not otherwise have had the academic credentials for employment there. Sutherland Jamaica has also set internal goals to increase the number of youth it trains and sources from the CTC program.
    
2. Social impact focus: An inclusive business seeks to understand, measure, and continuously grow the social impact that it is having in its workplace and communities. It goes further than traditional workforce engagement to understand and provide for the needs of its employees and ensure that they are equipped with the training, resources, and life skills that they need to succeed and grow. It aims for continuous improvement to ensure a positive impact on employees, communities, and the business.
   
   When Sutherland launched the 'Earn While You Learn’ program for university students to work part-time to pay their way through college, its focus was not only on producing a qualified workforce, but also on increasing graduation rates at local universities, which had seen graduation rates plummet as students struggled to afford recently introduced tuition fees. The company partnered with the university to set up contact centers on campus grounds, created flexible part-time work schedules that enabled students to attend classes on a full-time basis, and assessed academic achievement in employee performance reviews to determine if they need more time off to attend to their studies. More than 400 people have found employment with Sutherland on campus, many of them unlikely to have been able to afford higher education otherwise.
    
3. Partnerships and collaboration: Finally, an inclusive business does not attempt to do it all on its own. It works in close partnership with other experts to identify areas of need, provide expertise, develop targeted services and interventions, and ensure that impacts are shared with the wider community.         

For example, Sutherland’s CTC program runs on partnerships with clients, governments, universities, youth training programs, churches, community centers, and civil society organizations to reach and train at-risk youth. On our trip, we heard stories from youth of the many actors in their communities—the pastors, community leaders, teachers, friends, and family members—who reached out to them to encourage them to participate in the program, and who share an equal role in their success. 

Of all of the company’s investments in inclusive employment, Country Head and Associate Vice President for Sutherland Jamaica, Odetta Rockhead-Kerr emphasizes, “Our clients are some of the most important partners. If they didn’t give us the business, they wouldn’t be able to impact lives. It’s their opportunity to be socially responsible.”

By participating in the GISC, client companies are able to identify and partner with suppliers that have made real commitments to inclusive employment, contributing to the sustainability and social development of the communities they source from. Visit http://gisc.bsr.org to learn more about how your company can start an Impact Sourcing program.