This assignment focuses on the challenges aimed at agricultural and agri-food businesses and corporations to demonstrate responsible practices – sometimes called corporate responsibility (CR) and to use recognised standards to achieve this. By reviewing the audit criteria of standards along with commentary by industry observers and researchers about standards adoption, you should write a short technical article aimed at business CEO’s to explain the benefits and constraints of specific standards.
You should focus your discussion on a particular business sector or supply chain (like the dairy or fresh produce) but you must consider the challenges to both small and large businesses and potential relationships along typical supply chains. The standards you should consider as a minimum are as follows:
- ISO 14001 and BS 8555 – generic environmental management standards
- SA 8000 – social accountability standard and the Ethical Trade Initiative framework
- Sector or supply chain specific standards linked to your agri-food sector with a focus on any environmental or social dimensions of sector standards e.g.
- Red Tractor or GlobalGAP for farms and
- BRC, IFS and ISO22000 for food companies
- You should also relate this to the Ethical Trade Initiative edevelopd by the UK government and industry as this may help you set the framework for comparison of standards – see annex
The review of the environmental and social standards has been undertaken by evaluating the available literature on the environmental and social standards and their adoption within the food and agri-business entities within the UK. The main purpose of their report is to provide the strategic guidance to the managers and owners of small business establishments that would eventually enable them to create and utilise a sustainable business framework within their chosen industry sector.
1.1 Supply chain management in dairy industries
First phase of dairy supply chain includes raw milk production starts from cold chain. Milk is collected from source and kept in storage tank in the organization. In order to secure milk in better manner, milk is kept in the cooling storage devices. Transport department collects milk from cooling tank with tankers trucks and transports the milk to organization dairy processor. In dairy processor stage, quality of milk is checked by the testing department to ensure higher quality of milk. After successfully tests, milk is transferred by the department to the final production line. It may be pasteurised, homogenized to produce consumer’s milks or even used to produce cream, chees
2.0 Environmental and Social Challenges facing the Dairy sector in UK
2.1 The supply chain and types of business
The diary production output in UK follows the 80-20 rule. As far as milk sourcing is concerned, the top 2% of the UK dairy processors bought almost 70% of the country’s total milk production. The main milk buyers in UK are Arla Food, Dairy Crest, Meadow Food, Müller Wiseman Dairies, Caledonian Cheese, First Milk and Glanbia Cheese. These top dairy processors maintain regular and direct contact with almost 70 percent of their milk suppliers and this essentially enables them to guarantee the milk’s hygiene and sustainability standards.
3.0 Critical Discussion
The environmental and social standards are playing a vital role in preventing unfair business practices within the dairy industry and this is playing a vital role in helping to ensure that the dairy industry is operating their business is a ethical and responsible manner which would be sustainable in the long haul. There are various environmental and social accountability standards which must be strictly followed and implemented by the different business establishments operating in the UK dairy industry (Henson & Humphrey, 2010).
These include the generic environmental standards such as ISO 14001 and BS 8555, the social accountability standards such as SA 8000 and the Ethical Trade Initiative Framework. Additionally, there are supply chain specific standards which are applicable within the dairy industry in UK and these include the Red Tractor or GlobalGAP (which applies in case of farms) and IFS, BRC and ISO 22000 (which are applicable in case of food companies).
The ISO 14001 is the international standard that deals with the organisational requirement for maintaining an effective environmental management system. The ISO 14000 family of standards provides the practical tools to the modern day organisations to manage and comply with their environmental obligations. The ISO 14001:2015 and ISO 14006:2011 are focusing on the existing organisational environmental systems to accomplish this objective. The other standards in the ISO 14000 family are specifically focusing on the diverse approaches such as environmental auditing, communications and life cycle analysis to tackle the modern day environmental challenges such as climate change (Marimon et al., 2011).
By implementing the ISO 14001 standards within their business, the dairy industry would be able to reduce the adverse impacts of their business operations on the environment. They would be able to operate in an environmentally responsible manner and contribute towards global environmental conservation efforts.
The BS 8555 standard deals with the implementation of the environmental management systems within organisations. The modern day consumers are extremely conscious and aware of the adverse impacts of the business operations of the global corporations on the environment and as a result they are increasingly demanding environmentally responsible products and services from the business establishments. The BS 8555 Certification acts as a strong proof of the organisational commitment towards eco-ethics.
The BS 8555 provides an effective way for both small and big business enterprises to spread the costs of implementing a generic environmental management system which eventually helps business establishments to conduct their business operations in a socially responsible and ethical manner (Barwise & Battersby, 2016). By implementing the BS 8555 standards, the dairy industry would be able to satisfactorily fulfil their duties and obligations towards the environmental and this would help them to ensure the future growth and sustainability of their business.
This is another important standard which are applicable to the modern day business establishments. The SA 8000 is the leading social certification standard for factories and organisations all over the world. This standard was incorporated by Social Accountability International in 1997 and over the years this standard has become the main framework which helps the modern business establishments to demonstrate their level of commitment and devotion towards the fair treatment of workers across diverse industry segments (Hiscox et al., 2008).
The SA 8000 standard considers eight areas of social accountability in the modern day workplace which is well supported by the corporate governance system imposed by the management which is continuously striving to drive improvement in all areas of the standard. The SA 8000 standard is widely popular among the global business establishments and is held in high esteem by business leaders as it helps them to ensure the highest levels of social compliance within their supply chains without compromising on their business interests (Hiscox et al., 2008).
The SA 8000 standard has been formulated keeping in mind the labour provisions that are contained within the Universal Declaration of Human Rights and International Labour Organization (ILO) conventions. By respecting, supporting and complimenting the national labour laws in UK, the SA 8000 is playing a vital role in ensuring ethical working conditions for the working class population in UK.
Ethical Trade Initiative Framework:
The Ethical Trade Initiative (ETI) Framework has been developed by the UK government and it acts as a guide for companies while helping them to prevent labour rights issues by managing and addressing all the risks that could arise from labour rights violations. Business establishments implement the Ethical Trade Initiative Framework through proper negotiation, engagement and collaborations between all their organisational staffs. The guiding principles of the (ETI) Framework include the following:
1) Employment is freely chosen and the concept of bonded or forced employment should not exist.
2) Workers have the freedom of association and the right to collective bargaining and the organisations must respect this right of their staffs.
3) The working conditions provided to the staffs must be safe and hygienic which should not pose a threat towards their health and safety. It is the responsibility of the employers to ensure the safety of the employees at the workplace (Van Bommel, 2011).
4) Child labour is strictly prohibited and organisations should never utilise any form of child labour within their business.
5) Workers should not be subjected to excessive working hours.
6) Employers should never discriminate among their employees and they should promote greater equality at the workplace.
7) Employees should be paid fair and standardised wages which would at least meet the minimum legal and industry benchmark standards.
8) Regular employment should be provided to the employees so that the employees are able to obtain a sense of job security at the workplace.
The ETI framework plays a vital role in ensuring the safety and well being of the thousands of people who are heavily dependent on the dairy industry for their livelihood and this helps in providing them with a sense of job security by eliminating the process of discrimination and unfair dismissals from the workplace (Van Bommel, 2011).
The Red Tractor standards are playing a vital role in maintaining the supply chain of the farming and dairy industry in UK. The Red Tractor logo has been widely recognised by the consumers in UK and over the years it has developed as a symbol of trust which guarantees that the food that the consumers are buying is safe and could be traced back to the original source. This Red Tractor standard is playing a vital role in ensuring ethical and sustainable business practices among the diverse supply chains that are closely associated with the dairy and farm industry in UK.
The Red Tractor standards recognise the aspect of bio-security and provide it with the highest levels of importance and this helps in strengthening the already existing guidelines and protocols regarding the livestock farms (Henson & Humphrey, 2010). The Red Tractor standards are reviewed in a periodic manner (every three years) by the Technical Advisory Committees (TACs) which includes farmers, vets, trade associates and retailers and this helps to ensure that all links within the farming and dairy supply chain are adequately represented while reviewing and amending the existing Red Tractor standards.
By implementing the Red Tractor standard, the Diary industry in UK would be able to conduct their business operations in a socially responsible and ethical manner. It would help the dairy industry in UK to tackle and address the various environmental and social challenges that they are facing within their business.
Recommendations for CEOs:
CEOs of both large and small dairy establishments must strictly obey and comply with all the standards that have been discussed above in order to ensure the future growth and sustainability of their business.
Marimon, F., Llach, J., & Bernardo, M. (2011). Comparative analysis of diffusion of the ISO 14001 standard by sector of activity. Journal of Cleaner Production, 19(15), 1734-1744.
Griffith, A. (2011). Fulfilling contractors’ corporate social responsibilities using standards-based management systems. International Journal of Construction Management, 11(2), 37-47.
Barwise, J., & Battersby, S. (2016). Environmental management systems. Clay's Handbook of Environmental Health, 281, 298.
Henson, S., & Humphrey, J. (2010). Understanding the complexities of private standards in global agri-food chains as they impact developing countries. The journal of development studies, 46(9), 1628-1646.
Hiscox, M. J., Schwartz, C., & Toffel, M. W. (2008). Evaluating the impact of SA 8000 certification.
Van Bommel, H. W. (2011). A conceptual framework for analyzing sustainability strategies in industrial supply networks from an innovation perspective. Journal of Cleaner Production, 19(8), 895-904.
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