Corporate Social Responsibility in the Global Supply Chain

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A key priority for the Asia-Pacific Economic Cooperation (APEC) is to help member economies prepare for a transition into a free economic environment. The APEC region has witnessed economic integration into a global economy. With this, new challenges have emerged, including pressure for lower cost production, efficient use of resources, and a requirement to follow international rules, practices and standards.

The APEC Capacity Building Network project Corporate Social Responsibility in the Global Supply Chain advocates supply chain management in Corporate Social Responsibility (CSR), through the application of efficient management practices with multiple stakeholders, including both large- and small-scale industries. Different perceptions and understandings of CSR exist across the 21 member economies of APEC and the industry sectors which serve as key elements in CSR. This project was seen as a chance to compile some of the positive practices of CSR within the supply chain in the form of case studies. These case studies would thus yield a greater understanding of current issues and different approaches for addressing them within APEC economies.

This project was convened in Manila through a workshop on the Asian Forum on Corporate Social Responsibility in September 2006. The workshop examined the scope of cases and highlighted practical aspects of introducing CSR in the context of international supply chains.

Workshop Outcomes

• Cases should focus on the integration of CSR into the management of supply chains.
• The purpose of the cases is to provide examples of good or innovative CSR practices in the context of supply chain management.
• While the primary focus of the study should be on the practical dimensions of managing CSR in the supply chain, the cases may also address broader stakeholder relations such as government, NGOs, civil society, and public policy environment of CSR in the economy.

The following case studies are from eleven economies and were prepared by experts nominated from HRD-CBN and other APEC groups.  The full report document is available for download at the APEC Publications site.

Title

Presenter (Economy)

Summary

Preface

Compendium Paper

CSR and the supply chain: the case of the Global retail supply chains managed by the Hudson’s Bay Company (HBC)

Pierre Vanasse (Canada)

Corporate Social Responsibility within the supply chain of the Canadian economy has been discussed extensively. Canadian consumers have demanded that retailers carefully select and audit suppliers to ensure they adhere to global standards within the supply chains they use.

Retailers such as Hudson’s Bay Company (HBC) have responded with enthusiasm. HBC maintains principles of corporate social responsibility that translate into procedures and policies for managing global supply chains while avoiding the exploitation of workers from other economies. The HBC goes through considerable lengths to ensure that products sold to Canadians come from socially responsible supplies and economies, which adhere and accept socially responsible practices and labor standards.

CSR in Chilean Fresh Fruit Supply Chain

Daniela Acuna, Rajiv Maher, Dante Pesce

(Chile)

In Chile’s emerging economy, fruit exports play an important role. However, working conditions of small fruit producers and exporters are mostly determined by their buyers and their end customers. In order to secure a place in the developed economy market, Chilean fruit producers and exporters have found it a necessary to “green up” as part of the supply chain of larger retailers.

This case describes a program themed Chile Good Agriculture Practices (Chile GAP). The program aims to strengthen the social and environmental performance of agricultural practices in Chile to satisfy the social and environmental requirements of buyers.

CSR and the Supply Chain in Changyu Pioneer Wine co. Ltd

Niu Zhejiang

(China)

This case study looks at the concept of corporate social responsibility as it develops in China. Some have been releasing their CSR reports annually, though many still do not understand CSR.

This case focuses on Changyu Pioneer Wine Co. Ltd, a well established brand in domestic and international markets. In their supply chain, vintage grape planters, sales agencies, foreign importers and exporters are the key players. Thus Changyu is faced with challenges in its relationship with stakeholders as the company implements its corporate social responsibility initiatives. The case study describes how the implementation of CSR helped Changyu generate not only economic but also social benefits both domestically and internationally.

Greening the Supply Chain and Beyond: The Case of Asia Pacific Resources Holdings international (APRIL)


Chrysanti Hasibuan-Sedyono

(Indonesia)

The behavior of Asia Pacific Resources Holding International (APRIL) is outlined in this study as a counterpoint to the perception in the global market that many Indonesian companies are ignorant of or choose to ignore corporate social responsibility. As a major producer of fiber, pulp, and paper, APRIL believes that it has a fundamental role in meeting the world’s growing demand for its products, while integrating sustainability in its operations. The APRIL case study emphasizes the application of CSR in the concept of managing forest resources as sustainable plantations that harmonize commercial, social and environmental development for a winning strategy.

CSR and the Supply Chain: How a Japanese Sporting Goods Company has successfully engaged with international NGOs

Amemiya Hiroshi

(Japan)

This case deals with major issues in global supply chain management. These issues include obtaining support from internal stakeholders: management, employees, factory managers, and trading partners. Creating trust is a key success factor in engaging with both the internal and external stakeholders. ASICS was responsive and moved quickly in the early 90’s labor scandals of “sweatshop” issues. Led by Mr. Tanooka, the company’s CSR team made great efforts to establish a working group in Japan together with its main competitor, Mizuno. This working group shared information related to the issue, the result has shown that neither ASICS nor Mizuno have been seriously attacked by campaigns or international organizations. This issue develops a way for the CSR team to reach their goal.

CSR Management/Supply Chain Management at Fuji Xerox (Fuji Xerox of Shenzhen)

Adachi Naoki

(Japan)

This case study focuses on the importance of building the capacity of factory workers in basic work-life skills in order to create a working environment that supports the diffusion of corporate social responsibility throughout the supply chain.

Fuji Xerox was under pressure to come up with an effective plan for ethical sourcing and turned to CSR. Issues addressed in this case include how to pursue CSR in overseas manufacturing operations and how to integrate CSR into corporate management and solve management issues.

Establishing Greener Supply Chain: Case of Fujitsu Limited

Ikuta Takafumi

(Japan)

This case focuses on CSR activities at Fujitsu Limited. This case shows Fujitsu’s achievement in the establishment of the green supply chain. The green supply chain is the reason for the existence of the EMC which facilitated frequent communication with suppliers that led to mutual understanding and solutions to common concerns.

Implementing Corporate Social Responsibility in Small and Medium Suppliers through the value chain of a Large Mexican Firm

Laura Iturbide

(Mexico)

This case study features a cement producer in Mexico (CEMEX) and the implementation of CSR.  CEMEX is the largest cement producer in Mexico and the third largest in the world. CEMEX’s success can be linked to its commitment to the community and sustainable development.

In 2006 CEMEX decided to participate in a pilot program with nine other “keystone” firms to support implementation of CSR measures among ten of it's small and medium suppliers. The study focuses on the methodology employed by CEMEX and the nine other companies in implementing CSR measures among SME suppliers in their value chains.

Corporate Social Responsibility in an International Supply Chain

Alan J. Stenger

(New Zealand)

This case discusses how good Corporate Social Responsibility (CSR) practices were instituted in a supply chain extending from China to New Zealand and Australia. It shows how this was accomplished through the forceful and consistent efforts of a supply chain logistics intermediary, ABS Logistics.

ABS Logistics helped a New Zealand manufacturer, Woodward Laundry Products, contract out a portion of its manufacturing to a Chinese firm, Congua Metals Company, with the assistance of a North American sourcing company, Hayden International Sourcing. Through supply chain management, ABS Logistics developed its own CSR policy and convinced Woodward Laundry Products to institute a similar policy.

Corporate Social Responsibility in Peru FORZAs Minority Inclusion Program

Pedro P. Franco

(Peru)

The case is about a Peruvian company known as FORZA S.A. which offers corporate security services. It's inclusion program for people with disabilities is one of several CSR activities undertaken by the FORZA Social Responsibility Association and consists of offering positions to the disabled as operators in the information and control center (CIC).

AMANCO DEL PERU S.A. CASE: “Amanco for a better Peru”

Israel Velarde (Peru)

Amanco is the Latin American leader in the tube systems business and also in “construsistemas” (construction systems) in Central America. Amanco is recognized as one of the leading organizations worldwide to have introduced CSR throughout its operations.

Corporate Social Responsibility in Supply Chain Management: A Case Study on NTUC FairPrice Cooperative Ltd.

 Chua Ker Sin

 (Singapore)

The case study focuses on NTUC FairPrice Cooperative Ltd, which is the leading supermarket retailer in Singapore. The company is known as a “supermarket with social conscience.” Its supply chain activities focus on developing effective strategies to improve product quality and safety by working closely with suppliers in implementing standards and good CSR practices.

Somboon Group (SBG) of Companies in the Auto-parts Industry in Thailand

Cheocharan Ratanamahatana, Chotirat Ann Ratanamahatana

(Thailand)

The focus of this case is the Somboon Group (SBG), a Thai automotive parts manufacturer that supplies major automobile assemblers, primarily but not exclusively Japanese companies, and serves the after-market. SBG’s experience illustrates the critical importance in international business of corporate social Responsibility (CSR). All of SBG’s business partners throughout the supply chain are required (both directly and indirectly) to implement CSR practices.

This case study explores the critical success factors in securing support for CSR from the top management of all SBG business partners.

BITIS in Viet Nam: Creating Values through Good CSR Initiatives in Supply Chain

Ngo Thi Minh Huong

(Viet Nam)

This case focuses on the experiences and practices of a Vietnamese Shoe-making enterprise, BINH TIEN Consumption Goods Production Company Limited.

It is an example of the development and implementation of an effective CSR strategy in the context of Viet Nam’s rapid integration into the global economy and the concurrent transformation of BITIS from a modest local enterprise into an organization linked to a global supply chain. Given Viet Nam’s fast-paced economic reform and recent accession to the World Trade Organization (WTO), Vietnamese enterprises are finding new ways of doing business in a more sustainable and competitive manner.

Annexes