How can global companies (positively) influence development? Engaging with Unilever
Oxfam works with lots of big private companies, but in the (frequent) discussions about the role of private sector in development, our relationship with one (very big) name keeps cropping up. Unilever. We’ve done a ‘poverty footprint’ study of Unilever’s impact in Indonesia, and more recently have engaged with it on its labour practices in Vietnam. Unilever is also one of the targets in our Behind the Brands campaign.
The latest report on its Vietnam operation has already triggered a flurry of blogs: Rachel Wilshaw (one of the authors) introduces the report. Unilever’s Global VP for Social Impact, Marcela Manubens, gives the company’s side of the story. Liesbeth Unger, a Human Rights and Business Consultant, wonders what’s in it for Unilever. Peter McAlllister, Director of the Ethical Trading Initiative argues that companies can’t go it alone – the key is to collaborate.
Briefly, we went back to Vietnam to see what progress Unilever had made since our 2011 study found a pretty significant ‘gap between the company’s high-level policies on labour rights and the reality on the ground for workers’. This time round we found evidence of ‘effective leadership’ from the company, a ‘strengthened commitment to respect labour rights’ and ‘exceptional transparency’ (Unilever allowed Oxfam to hold focus group discussions with key suppliers without the presence of company personnel, and to conduct worker interviews both on- and off-site.)
These process improvements had led to ‘increased levels of trust between workers and management, including significant efforts to improve the effectiveness of grievance mechanisms. A higher proportion of workers in its manufacturing operations are directly employed. Suppliers were found to be more aware of Unilever’s expectations on labour standards and have received training and guidance on the new policy.’
But as ever, our cup is half empty, and the report identifies three big issues:
- Unresolved tension between commercial and labour requirements of suppliers. Very few suppliers buy the business case for treating their staff better. Instead, they experience contradictory messages – the demand for low prices/fast turnaround times pushing overtime up and wages down, while Unilever’s sustainability guidelines say do the opposite.
- Fair compensation and women’s empowerment. Mixed results – wages have gone up, but lower skilled workers still struggle. And the shift to direct contracts (along with mechanization) seems to have actually reduced the number of jobs for women in its Oops.
- Time to look at the system, not the suppliers. This is the biggie. The report concludes
‘Systemic issues, including child labour, slavery and gender-based violence, as well as the labour issues covered in this report, are determined by political, social and economic factors that affect entire sectors, as Unilever acknowledges in its human rights report . The company understands this and has committed to tackle the root causes of negative human rights impacts and to report its progress publicly.’
This all echoes the thinking of Unilever’s hyperactive boss, Paul Polman. Earlier this year, I interviewed him for the private sector chapter in How Change Happens. It was fascinating. We sipped mint tea as dusk sank over the London skyline and Paul talked non-stop for 70 minutes. He is an instinctive system thinker, with ambitions that stretch far beyond Unilever:
‘We discovered quickly that we can’t do everything alone. We need to use size and scale of Unilever to get transformational (i.e. system) change. Move the world out of deforestation, get WASH on the corporate agenda. If you want to transform the tea or palm oil market, you just have to focus on the right 30 players, I call it the rule of 30.
You have to actively work on frameworks. We worked actively on COP21 because it’s a framework being put in place with governments – responsible companies often want regulation to be put in place. The notion that we’re against regulation is just not true. We want it to get over the free rider problem, but we have to work together to design it – it’s got to be the right regulation. So in the end you need these frameworks.
The job of a CEO has totally changed. You have to be systemic thinkers, able to work in partnership with national governments. I would not do anything in Unilever without a multi-stakeholder approach. We have to work with government and civil society.’
The implications for activists are significant I think. If system change is essential, then at least as important as what a particular company does is its own approach to activism, its agency in lobbying government (for good stuff or bad), or its willingness to work in multi-stakeholder fora with rival companies and others. We need to pay more attention to how companies influence the wider system, and their potential as allies in doing so.