By Waka Itagaki
International organizations such as the United Nations (UN) and the World Bank have significant purchasing power. In 2014, the UN purchased $17.2 billion in their procurement process. Despite this purchasing power, international organizations have arguably not made the most of it to generate social impact across the world. “Buy Social,” a procurement process that seeks not only economic value but also social and/or environmental impact, has the potential to be transformative. This article highlights the benefits and challenges of Buy Social compared to “Socially Responsible Procurement,” and recommends that international organizations implement Buy Social.
There is no widely agreed term to describe this kind of socially conscious procurement. This article uses “Buy Social” but other names include “Social Procurement,” “Socially Impactful Procurement,” “Social Impact Purchasing,” “Social Purchasing,” and “Socially Impactful Purchasing.” It is important to note that Buy Social is different from Socially Responsible Procurement, which is already implemented by international organizations.
Socially Responsible Procurement applies negative or positive screens to bidders by using a “do no harm” approach. For example, the UN buys from companies that meet labor standards of the International Labour Organization (ILO). Socially responsible procurement typically only considers if a bidder is a business with social consideration, and does not measure the outcomes.
By Elena Rosenblum
In June, a Guardian investigation revealed abysmal labor standards in supply chains of the world’s largest shrimp farmer and Thailand’s largest agribusiness firm, Charoen Pokphand (CP) Foods. The investigation found that CP sources fishmeal from some suppliers that own, operate or buy from fishing boats manned under forced labor conditions — mostly from Cambodia, Myanmar, and Lao PDR – and sells the prawn to international supermarkets, such as Wal-Mart and Costco.
The incident casts light on one of the United States’ largest sources of shrimp, and highlights the need for more transparent global value chains (GVCs) and certification standards across industries.
Thirty-two percent of total U.S. prawn imports originate from Thailand, the world’s largest shrimp exporter, and 10 percent of these imports are farmed by CP Foods. A number of major supermarkets, Whole Foods, Carrefour, and ICA, have stopped buying from CP Foods and others are leveraging their market influence to drive a more transparent, sustainable, and humane supply chain.
Moreover, a number of supermarket and food-service firms including Morrisons, Tesco, and Costco US held a three-day meeting with CP Foods the week of July 28 to create a taskforce to tackle trafficking and forced labor in the shrimp feed industry.
For its part, CP Foods responded with an operations-wide audit and the introduction of frequent, regular, and independent audits of all suppliers. They also increased research efforts to develop alternative protein sources to end dependency on unethically sourced fishmeal. Continue reading