• CR & SME's

CR & SME's

This paper examines how Western firms sourcing products from developing countries can achieve sustainable procurement. It argues that sustainable procurement has a role to play in poverty reduction. The paper considers the history and trends that underlie sustainable procurement, and looks at the links between corporate social responsibility and sustainable procurement practices. It examines three case studies in which Dutch businesses procure supplies from Sierra Leone, Mali and South Africa to identify the factors that drive sustainable partnerships in value chains, including:

• why partnerships were established between businesses in the Netherlands and the South
• the changes that were needed in organisation and marketing
• the additional costs of applying sustainable procurement principles and the actors who bear these costs

Drawing lessons from these case studies, the paper highlights several challenges faced by producers, business and support agencies involved in sustainable procurement, including:

• convincing the market of the value of sustainably sourced products, and developing a common code for sustainability that would require all companies to buy in a sustainable way
• introducing good agricultural practices and promoting standardised procedures to improve quality and traceability and to cut losses
• private investment is not sufficient to strengthen the suppliers’ technical and management capacities and additional support from governments, donor agencies and NGOs is needed.
• understanding and adapting to cultural differences in doing business, needs flexibility and an open-mind.
• investment and operational costs for start-ups in developing countries are generally high and it is difficult to find funding to invest in strengthening such suppliers
• several activities in each of the case studies were financed by donors raising the problem of hidden costs as it is difficult to get a clear picture of the true investment needs and economic feasibility of these chains
• not including farmers in value chains is a sustainability failure in quality and social terms. It undermines the farmers’ commitment to supply high-quality products on a reliable basis.

The paper suggests that though it is not possible to draw exhaustive conclusions, the findings offer several ideas that may help further development of sustainable procurement from the South including:

• sustainable procurement requires transparency and a fair distribution of power in the chain
• as well as the primary value chain actors, it is important to involve other stakeholders – researchers, government, support agencies, etc. – to improve sustainability
• efficiency, high quality and social responsibility need to be considered in the structure of an organisation and its supply chain in order to add the highest possible value to the chain
• involving and strengthening small-scale producers upstream is essential because as long as they are not included in the chain, there will be losses in terms of quality, reliability of supply, and social welfare

• Full text of document
• Publisher details
• Send to a friend