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Ebook The Business Costs of Ethical Supply Chain Management: Kenyan Flower Industry Case Study

Submitted by puput on Wed, 08/19/2009 - 09:01

The funder of this research, the Department for International Development (DFID), wishes to enhance the private sector’s contribution to sustainable development by encouraging business practices that embrace social, environmental and financial responsibility. Ethical supply chain management is a critical aspect of responsible business in developing countries.

Work by the Natural Resources and Ethical Trade Programme (NRET) and the Ethical Trading Initiative (ETI) has shown that trading partners in the North and South are willing to develop this approach to managing social and environmental performance, but have highlighted the need to understand the cost implications more thoroughly. In particular, there is concern that improved social performance will increase employment costs, and lead either to companies avoiding such approaches or to reduced foreign direct investment in developing countries.

This case study of the Kenyan cut-flower industry’s experience with its own “home grown” ethical labour and environmental code is one of three studies undertaken by NRET to answer the following questions:

1. How much does complying with ethical standards cost each participant in the supply chain?
2. How large are the gains in labour productivity, management efficiency and other factors that arise from introducing ethical standards?
3. How can the compliance costs be distributed among participants in the marketing chain (including the consumer)?

The other two case studies involve the South African wine industry and the Kenyan tea industry. Findings from these studies are presented in separate reports.

Contents
Summary
Introduction
Part1. Kenya Flower Suppliers

    1.1 Background
    1.2 Agriculture
    1.3 The flower industry
    1.4 The KFC codes of practice
    1.5 Costs of compliance
    1.6 Sensitivity analysis
    1.7 Benefits from compliance

Part 2 The UK – Buyers
Part 3 Key findings
References
Appendix 1. The KFC silver code of practice
Appendix 2 Compliance cost assumptions and workings

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