Supply Chain

Oxfam report indeed Ripe for Change, that is, by Oxfam itself

Oxfam report indeed Ripe for Change, that is, by Oxfam itself

Oxfam’s Ripe for Change report on supermarket ranking for global supply chains came out the end of June.  A lot of paperwork has been produced to convey the idea that supermarkets don’t take their responsibility for making the supply chain more sustainable socially. My overall impression after reading is that Oxfam is being significantly non-transparent and insignificantly relevant.

Significantly non-transparent and insignificantly relevant

It’s not an easy read. That’s OK. It’s also not a read that makes it easy to validate the sources. Numerous sources are being referred to, but it is in no way clear if those sources are actually adding up to the described issues. That is because Oxfam is writing on different issues in general, and not about issues per supply chain for specific country/product combinations. The latter would make it easier to validate the reasoning of Oxfam, now that is virtually impossible. You have to assume as a reader that the research and the interviews add up to the accusations of Oxfam, but you can’t actually check that. Oxfam should have taken care to produce a validation table stating:

  • The country
  • The product
  • The issue(s)
  • The sources
  • And any measure on how significant the issue is (could be % workers interviewed in a particular company, # of instances of a particular issue etc.)

One big non-transparency is that Oxfam is using expert interview without naming the people interviewed (see http://policy-practice.oxfam.org.uk/publications/ripe-for-change-methodology-and-datasets-620478) and showing the content of those interviews related to those names. Oxfam claims this is for protection purposes, but it also kills the possibility to validate that content.

Another source of non-transparency, more indirect, is the way the scorecard is set up (http://policy-practice.oxfam.org.uk/publications/ripe-for-change-methodology-and-datasets-620478). If you want to check the sources Oxfam uses for scoring, you hit upon a block. So you need to type the link they give you in your address bar to get to those sources. Also, the scorecard is not editable, making it impossible to create your own version including Oxfam’s omissions.

All that leads me to the conclusion significantly non-transparent and insignificantly relevant because Oxfam makes it almost impossible to validate their conclusions on both the major themes they address and the company scorecards. That leaves with a report that shouts out without knowing if Oxfam’s shouting is actually significant. All the issues are relevant, but that in itself doesn’t make them significant. Why is that important? That’s next.

Unrealistic expectations of retailers

Oxfam is mixing up what you can expect from retailers and manufacturers. Retailers have thousands and thousands of products to take care of. For most manufacturers we are talking a hundred or so and then very focused most of the time on some specific ingredients.

Why is that important? Because Oxfam expects the same action from retailers as from manufacturers. Look at the scorecard for workers under W4, 5 and 6. Again I need to type what that ask for there because their scorecard is copy protected. They talk about supplier engagement, human rights risk assessments, engagement with unions and living wage action. If you are familiar with retail and try to understand what they are facing, you would know that these expectations are totally unrealistic. No retailer, not even Walmart, would have the capacity to fulfill all that for all those thousands of products. That is exactly the reason that retailers are using standards like Fairtrade and Rain Forest Alliance to make sure the sustainability basics are in place in any supply chain. And yes, they are always issues going beyond those standards. Take living wage. Oxfam expects retailers to close the gap between current wage levels and living wage. It looks like Oxfam forgets about the work of ISEAL (https://www.isealalliance.org) with Fairtrade, Rain Forest Alliance, and others on that issue. Of course, the way to go is that in one way or the other standards include living wage requirements in their protocols. And NGOs support them in that effort. But you can’t expect retailers to arrange that for all those thousands of products. Again Oxfam shows that it is ignorant about what can be expected from retailers. Let’s assume that a retailer has 5,000 products sourced from different supply chains. Could be fruits, vegetables, flowers, chocolate, coffee, tea, wine, textiles etc. If a retailer wants to do all that Oxfam expects you would probably need 1 FTE per supply chain to be able to that. Of course, Oxfam wants to support, but my guess is that that is not for free and you would still need the internal capacity to handle that support. No, that’s why we work with multi-stakeholder initiatives like IDH (https://www.idhsustainabletrade.com/), TSC (https://www.sustainabilityconsortium.org/),  etc.

What does this boils down to is that what you can expect from retailers is to jointly work with manufacturers of grocery products, who usually have significantly more capacity per product, in their efforts to make supply chains more sustainable.  And retailers can then be expected to organize their private label supply chains. Oxfam expects them also to take responsibility for branded products. It beats me how why that would be a logical thing. It’s simple: every brand is responsible for its own products. Brand for their brands, supermarkets for their private labels. I hope Oxfam will be able to understand that. And then. For product groups like fruits, vegetables, flowers you don’t have a lot of branded products. That’s where retailers will have to devote a lot of effort already. So let’s leave it at private label only, please.

Ripe for change is Ripe for change

I think it is fair to say that the report of Oxfam needs serious editing. In terms of validation and in terms of expectations. Especially the latter creates expectations that can never be met. I challenge Oxfam to come up with a revised edition based on proper validation and realistic targets. If Oxfam wants to know more about retail, please come visit me. I’ll be happy to explain.

Roland Waardenburg

P.S. One big mistake by the way, Oxfam calculates the income of a cocoa farmer at 80% of a living income. That is totally wrong. If it is 40% it’s already high. See http://www.cocoabarometer.org/cocoa_barometer/Download_files/2018%20Cocoa%20Barometer%20180420.pdf

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