7th World Conference on Sport and the Environment - International ...

Report
4.10.2. Sport and sustainable compliance
Auret van Heerden, President and CEO, Fair Labor Association
The famous economist Milton Friedman made the classic statement that “the social responsibility of
business is to make profits” and one could apply that logic to sport and say that the social responsibility
of sport is to promote sport. That is indeed a valid and valuable thing in itself. However, any business or
sporting activity takes place in a specific social context that cannot be ignored. (I use the term “social” in
its broadest sense here and include the environment). If that social context is badly regulated business
or sporting activity will inevitably be affected. In the case of business, many companies found that
their exclusive focus on profits meant that they overlooked key social factors that subsequently had a
negative impact on their business. To take a topical example, a business manufacturing in a country
where product safety regulations are not properly developed or enforced may find that their goods are
defective and have to be recalled, resulting in additional costs, potential legal liability and damage to their
reputation.
Consumers, in particular, want to be able to rely on the integrity of their favorite brands and so companies
who cannot be sure of the regulatory environment need to take additional measures to ensure that their
products meet up to market expectations. This issue has been magnified in recent years by a number of
factors. Firstly, more and more products are now produced in global supply chains and this increases the
risk that one or more of the links in that supply chain is located in an unregulated jurisdiction and may not
comply with a key regulation or standard. Secondly, the length of the supply chains makes it very hard
for the buyer to have visibility over all the suppliers involved. Thirdly, the amount of information available
to consumers is greater than ever before and they may well find out about a product defect through the
media or other sources. Once consumer confidence in a product or a source of products is shaken it is
very hard to restore.
Hence even businesses who follow Milton Friedman’s dictum and focus only on profits soon find that
their pursuit of profits cannot be sustained without taking into consideration social factors. If the public
agencies cannot ensure an acceptable or effective degree of social regulation then business may well
need to step in and make other arrangements to provide basic social goods. The extractive industries
have long been aware of this and have themselves undertaken the provision of social goods such as
roads, clinics and schools. Since oil or mining companies often operate in remote areas where public
infrastructure and services do not reach they have to deliver such services themselves just to ensure their
basic operations. The need for a private actor to deliver public goods is not as obvious when companies
operate in cities but the same implications exist if the context is not well regulated. Any company or
organization therefore has to ask itself a few basic questions about the context in which it operates. What
are the key social issues that may affect my activities? Can I rely on the public agencies responsible for
managing those issues? If not, what can I, as a private actor, do to ensure that they are managed so that
I can protect the integrity of my product and my reputation as a producer? In this regard any sporting
organization could be seen as a producer and sporting activity as their product so the same questions
need to be asked.
If the answer to any of the questions above is “no” then the enterprise or organization needs to take
additional steps ensure the viability and sustainability of their activities. Many companies already do this
in respect of product quality. They have quality standards and conduct quality controls in order to ensure
that their suppliers comply with those standards. In some contexts that approach has to be extended
to other issues as well and companies have used the same approach – they set precise performance
requirements and audit to ensure compliance. Where they find non-compliance they define corrective
action plans to address it.
Take the example of child labour. In some developing countries widespread poverty results in child
labour and any economic or social activity in that society runs the risk of being affected by child labour.
This has been the case in the Sialkot area of Pakistan which has long been a major producer of sporting
goods, in particular soccer balls. Clearly no company or social organization can eliminate poverty and
child labour but at the same time they cannot ignore the fact and the risk so they need to be proactive
and take steps to prevent it entering into their supply chain. In addition to prevention, they need to be
monitoring on an ongoing basis to ensure that the preventive measures are working and where they do
find non-compliance with their child labour standards they need to set up a corrective action plan to
remedy the problem. The implementation of that plan will almost certainly involve skills that the business
or sports organization does not possess and so they should partner with other groups who specialize in
that area. A good example of this can be found in the response of the sports community to the situation
in Sialkot. The <strong>World</strong> Federation of Sporting Good Industry (WFSGI), the ILO, UNICEF and some NGOs
<strong>7th</strong> <strong>World</strong> <strong>Conference</strong> on Sport and the Environment
International Cooperation and Development Dept.
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