The Need for Transparency and Accountability in Global Supply Chains
In December 2020, the U.S. Supreme Court heard arguments about whether Nestle USA and Cargill should be held responsible for child labor on the West African farms from which they buy their cocoa. The details of the specific case are devastating. Regardless of what the courts say on legal liability these companies may have in their home countries for such practices abroad, which is a mixed record across jurisdictions, there is no question that society is increasingly looking to global companies to take accountability in cases like these. In addition, for companies like Nestle and Cargill, the judges on the court of public opinion are also consumers, and they can make decisions every time they go to the supermarket.
And yet before we can begin to address accountability, we have to acknowledge and remedy the dearth of reliable information — both for consumers and, in many cases, for companies that are increasingly expected to be accountable for practices at all points in their supply chains, no matter how geographically distant they may seem. Across many different supply chains, large multinational companies are often unable to answer questions about their last-mile suppliers and producers, and they typically face a steep information cliff at the trader level.
Solidaridad, an international nonprofit organization working to create fair and equitable supply chains, is working hand in hand with smallholder farmers, workers and businesses to close those information gaps, while also supporting a more environmentally and socially sustainable economy for all. Solidaridad has learned that several key factors lead to increased transparency and accountability in global supply chains. This transparency not only speaks to the interests of increasingly conscious consumers but also reduces risks for companies.
To do their work, this organization leverages digital tools that are locally relevant and context- and commodity-specific. These tools are integrated into core programming to improve production and help producers access financial information, while also incentivizing the production of data. These tools provide more insight about the overall supply chain, but more importantly, they offer value to producers while protecting their interests. This requires a very fine balancing act, which Solidaridad works to accomplish with all involved parties.
Cross-sector collaboration: better outcomes
Solidaridad has been an active member of Bonsucro, a global multi-stakeholder nonprofit that focuses on sugarcane sustainability. Working with Bonsucro, farmers, producers, NGOs and big brands collaborate to help more sugarcane producers become sustainable. In an effort to make Bonsucro certification more attainable, the Farmer Support and Loyalty tool was developed, in which farmers fill out a brief survey to generate a tailored work plan report (while the tool also captures important data).
Gathering information at this supply-chain level can be a significant challenge, but this tool has not only made this data more available, it also generates a beneficial return-value to those farmers and workers who use it. This concept of making data a two-way street has permeated Solidaridad’s approach to supply chain transparency.
Information exchange: creating value for all parties
In Central America, the Top Cana project, rooted in the sugarcane sector, is a digital platform focused on the transfer of knowledge, including technical assistance, and training for rural producers and their families on farm management. The project also embraces the use of social media as a means for producers to ask questions to experts and share best practices with peers.
At the time of launch, Solidaridad’s Monique Vanni, remarked, "By using a digital platform to collect data and generate mechanisms for continual improvement, not only can we support producers in the field but we also help build a platform, where supply chain stakeholders can meet to exchange and align ideas.”
Allowing producer associations to apply shared knowledge to their own realities and adapt their projects accordingly has led to improved soil management and the scaling of good agricultural practices. It has also led to greater use of technical assistance and other services, such as financing, which are facilitated by tailored, accessible information on the platform. Incentivizing this type of engagement, such as delivering information for transparency along the supply chain, is critical, when farmers and workers weigh the many obligations they must meet each day.
Outside of agriculture, there is also a tremendous need for greater transparency in other supply chains, including minerals. In West Africa, Solidaridad launched The Gold Solution—a suite of digital tools designed to promote adoption of best practices by mines and miners, while improving their access to markets and finance and increasing the transparency of supply chains.
The Gold Solution has three components:
- An Interactive Voice Response platform that is compatible with basic feature and Android phones, which allows miners to receive practical guidelines on responsible mining practices, such as safe working conditions, responsible use of mercury and environmental management in their local dialect.
- An Android-based application to help mine managers track responsible practices at their sites and to also provide information to regulatory bodies on mines’ compliance to set standards.
- A web dashboard for key stakeholders, such as industry actors, donors and credit institutions, to track the activities of small-scale miners.
By connecting the dots from miner to mine to upstream actors, the quality of information improves throughout the supply chain, and relationships strengthen.
Sustainable and accountable environments
As millions more people around the world face numerous challenges and vulnerable employment situations amidst, the urgency is higher than ever to demand equitable and environmentally sustainable working conditions for all. The debate continues in courts about exactly how domestic companies are held accountable for wrongs committed abroad, and the loopholes that often exist to protect key parties.
Yet, regardless of the outcome, these conversations highlight a critical need for greater transparency in supply chains, which may be facilitated through the creative use of digital solutions and fair, mutually beneficial exchanges of information. This potentially gives all of us—companies, producers, consumers, governments and non-profit organizations alike—key tools to make better informed, smarter decisions and to ultimately hold each other accountable, regardless of our reach in the world.