Cost of coffee.indd - RISC

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16 key ideas ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ ◆ Corporate social responsibility (CSR) is now a key element in business. It includes many of the traditional PR techniques companies use to create a positive image. These include funding community projects and other good causes, eg cancer research, sponsorship of sports, arts, education. As a result of consumer pressure and campaigns against the human rights or environmental record of TNCs, many now have of codes of practice on workers’ rights and the environment. Critics of CSR argue that these voluntary codes do not provide adequate protection and in many cases are a form of PR which counter criticism while preserving most exisiting business practices, and profit margins. They point out that modern CSR was born during the 1992 Earth Summit in Rio de Janeiro, when UN-sponsored recommendations on international laws to regulate corporate behaviour were rejected in favour of a manifesto for voluntary self-regulation put forward by the World Business Council for Sustainable Development, a lobby group funded by TNCs. Responses to the coffee crisis by the big coffee companies include: introducing certified fair trade or environment friendly brands, buying direct from farmers, sponsoring development projects in coffee growing areas, providing training to improve coffee quality and grow alternatives to coffee, stimulating demand by developing and promoting new coffee-based products, supporting research which counters the perception that coffee is bad for health, supporting sustainable agriculture initiatives, lobbying for an end to subsidies for US and EU farmers which restrict agricultural exports from developing countries. In 2004 Oxfam produced a follow-up report which analysed and scored the ‘Big Four’ coffee companies on their actions to help solve the crisis. Although some progress had been made, none scored higher than 50% and Oxfam continues its call for consumers to maintain pressure on the companies. See Appendix 5: Mugged, p55. In November 2003 the Co-op converted all its own brand coffee to Fairtrade. See Appendix 4: Co-op’s fairtrade coffee, p53. In August 2005 Kenco launched a new instant coffee brand, Sustainable Development, which uses Rainforest Alliance Certified coffee which pays farmers a premium for using environment-friendly methods. See Appendix 3: Sustainable development, p52. In October 2005 Nestlé launched a new Fairtrade instant coffee. The Fairtrade Foundation was heavily criticised for giving the Fairtrade Mark to a company associated with inappropriate marketing of breast milk substitutes in developing countries. follow-up ◆ Analyse both sides of the coffee crisis debate outlined in the materials included in the Appendices, as well as documents which can be downloaded from the RISC online reading room www.risc.org.uk/readingroom/coffee.html, and websites, see Weblinks, p78. In light of the seriousness of the crisis, how responsible do you think the companies are being? ◆ Follow the debate over Nestlé’s Fairtrade coffee: Appendix 7: Partners’ Blend, p62; www.babymilkaction.org/press/press7dec05.html; www.growmorethancoffee.co.uk. ◆ Produce a radio programme on the coffee crisis or a poster/story board for a TV ad to publicise the initiatives devised in the activity. ◆ Visit the Corporate Social Responsibility Forum website to get an insight into the values being promoted by CSR professionals: www.csrforum.com. ◆ Read Appendix 9: Behind the mask, p69, a critique of CSR based on case studies of Shell, Coca Cola and British American Tobacco. ◆ Write to coffee producers asking them to switch more of their brands to Fairtrade. ◆ The teaching pack Seeing Through the Spin: corporate PR in a globalised economy gives background information on PR techniques. Free download: www.babymilkaction.org/spin. ◆ Prepare a dossier of PR material disseminated by well known TNCs that have been criticised, to illustrate the range of PR techniques which can be used to counter opponents’ claims, eg adverts in media, website, newspaper articles. Nestlé, Shell, RioTinto, BP, GAP, Monsanto, McDonald’s, British American Tobacco all provide interesting case studies.
actionpage: mugged You are a team of senior executives from a leading coffee company. You are devising a strategy to: • deal with the crisis in the world coffee market • respond to well-publicised criticism from campaign organisations, eg Oxfam, Fairtrade Foundation, and particularly an Oxfam report, Mugged: poverty in your coffee cup (see summary below). Your proposals should include: • how far the company should implement Oxfam’s Coffee Rescue Plan, taking into account your need to maintain market share, profits and shareholder value • a public relations (PR) campaign to counter accusations of increasing profits at the expense of poor farmers, including: - a breakdown of the groups of people you should try to reach with your message - ideas of how you can maintain positive corporate image in the long term • how you propose to monitor the success or failure of your strategy. s Prepare a five minute presentation for your board of directors, producing visual aids that will help you make your case. Mugged – poverty in your coffee cup* There is a crisis destroying the livelihoods of 25 million coffee producers around the world. The price of coffee has fallen by almost 50 per cent in the past three years to a 30-year low. The coffee crisis has become a development disaster whose impacts will be felt for a long time. Families dependent on the money generated by coffee are pulling their children, especially girls, out of school. They can no longer afford basic medicines, and are cutting back on food. Some have turned to the production of lucrative drugs such as cocaine, chat or marijuana. Beyond farming families, local coffee traders are going out of business. National economies are suffering and some banks are collapsing. Government funds are being squeezed dry, putting pressure on health and education and forcing governments further into debt. The low coffee price creates a buyers’ market, leaving some of the poorest and most powerless people in the world to negotiate in an open market with some of the richest and most powerful. The result, unsurprisingly, is that the rich get richer and the poor get poorer. Ten years ago producer-country exports captured one-third of the value of the coffee market. Today, they capture less than ten per cent. Over the last five years the value of coffee exports has fallen by US$4bn. The big four coffee roasters, Kraft, Nestlé, Procter & Gamble, and Sara Lee, each have coffee brands worth US$1bn or more in annual sales. Together with German giant Tchibo, they buy almost half the world’s coffee beans each year. * this is an edited summary of the report – Oxfam International 2002 www.maketradefair.com 17
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appendix 8: robbing coffee’s crad
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appendix 9: behind the mask the rea
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• change the law to enable people
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Fair Trade in Action - KS 3-4 Fairt
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ackground reading* Behind the mask:
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useful contacts Anti-Slavery Intern
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International Coffee Organisation w
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