by David Batstone

"A law of indiscriminate profit is being globalized, and by its application
all too many corporations contribute to the abuse of human rights in poor
countries."

This declaration sounds like it came straight off the podium of the
anti-globalization protests that fill the streets upon the occasion of a
World Trade Organization meeting. Actually, it was a CEO of a major
corporation who shared this opinion with me: Riccardo Bagni, the chief
executive of Coop Italia, one of the biggest commercial enterprises in all
of Europe.

Coop Italia, with headquarters in Bologna, is made up of a group of
cooperatives operating in the banking, insurance and retail sectors. The
conglomerate operates around 50 superstores, 1000 supermarkets and 200
discount stores covering the entire country of Italy. Its total sales turned
the tills for close to $10 billion for 2001.

The cooperative movement was born in Italy more than a 100 years ago to
stimulate fair market conditions for workers who did not have ready access
to capital. Taking up this legacy, Coop Italia launched in 1947 as an
international buying office for the cooperatives that were still in
business. Phenomenal growth over the years has pushed the company into
constant organizational change. But the original ethos of the enterprise
stands firm: "Coop Italia is a company comprised of people, not capital,"
Riccardo tells me.

Coop Italia's standout efforts to improve labor practices around the globe
give his claim credence. The company purchases food and non-food products
from nearly 2500 suppliers worldwide. In 2001 it bought nearly $50 million
in goods from Asian countries alone; most of its textiles and rugs, for
example, come from China, India, Pakistan and Bangladesh.

The company first began considering a code of conduct for its supplier
network back in the mid-1990s. Riccardo had been appointed vice-chairman for
the company's non-food products with a direct responsibility for private
brand management and quality assurance. He made it a priority to set
consistent labor standards wherever Coop Italia conducted business in the
world. "I wanted to make sure that the respect of workers, especially for
those belonging to the weaker ends of society, was a prime value at our
company," he says.

Most Italians love soccer, so Riccardo could not think of a better venue
than the World Football Championship in 1998 for introducing the concept of
'fair trade.' Coop Italia heavily promoted and stocked on store shelves the
'Ethics Ball,' made in Pakistan at a higher than normal production price to
ensure a living wage. Coop Italia also made sure that no child labor was
involved in the ball's production.

The Ethics Ball campaign never was intended to be a one-off marketing ploy.
In 1998, the company established a system to oversee all of its
international purchasing. It began working closely with second-party
agencies to monitor and verify compliance. For suppliers found to be
operating in violation of its code of conduct, Coop Italia provides
intensive training on how they can adopt plans that will move them
progressively toward compliance.

One such incident arose with a fruit supplier in Africa. Del Monte Kenya
provides Coop-brand pineapples. Even though the corporate parent, Del Monte
Foods Company, had signed off on Coop Italia's code of conduct, independent
auditors inspecting its plantation in Kenya found major problems. The
violations related especially to safety conditions and the workers' right to
form a union. Del Monte Kenya at first denied the audit report, then
resisted making changes. Local human rights organizations and the Kenyan
government backed the workers and turned up the heat on the fruit producer
to make changes. Coop Italia helped facilitate negotiations among all the
parties, and Del Monte Kenya made corrective actions.

The globalization of labor is a matter of fierce debate these days. As
happens in many debates, the extremes grab the spotlight - unrestricted free
contract vs. sweatshop exploitation. Fortunately, a vanguard of corporations
is showing how positive, long-term partnerships can be built with workers
and the social sector to mutual advantage.

Contact David Batstone at:
batstoned@rightreality.com

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"Do what you love in the service of people who love what you do."
-Steve Farber, The Radical Leap

Welcome to Our New Partner in India!

Investors India, an English monthly focused on small and medium investors,
will publish David Batstone's Right Reality column starting in March 2005.
Published out of New Delhi, Investors India belongs to Bajaj Capital, a
40-year financial intermediary that attracts 600,000 retail investors to its
kiosks across the country every year.

Disposable plates with a conscience

Ahhh..it's nearly springtime and soon windows will be thrown open and
outdoor entertaining will begin. This year, we suggest entertaining in high
style with disposable bamboo veneerware plates.
Voted as one of Fortune Magazines 25 Best Products of the Year (December 20,
2004), Bambu veneerware plates incorporate innovation and practicality in
materials, function and form. For parties or everyday use, these sturdy
plates are made from organically grown bamboo, fabricated without chemicals
or dyes, are UV sanitized and biodegrade in 4-6 months. The best benefit?
They look fabulous dressed up or perfectly naked. Dispose of or reuse - the
choice is yours. Read more.

(Brought to you by Greenfeet)

Essay: Do Corporations Have an Ethical Obligation to Assist Those in Need?

At the recent World Economic Forum in Davos, one particular topic drew
unusually strong support - the need for organizations across the board to
contribute more to the war on global poverty and illness. Part of this push
towards greater social advocacy is directed squarely at corporations, whose
resources are seen as necessary to address such specific problems as the
AIDS crisis in Africa and the lack of vaccines for children in the
developing world. At the same time, critics of the corporate social
responsibility movement respond that a company's main duty is to its
shareholders, not society at large.
Wharton Business School professor Nien-hê Hsieh tackles this topic during a
seminar on "Multinational Corporations and the Ethics of Assistance," in
which he noted that two principles justify corporate social responsibility:
Rescue and fairness.
Read the essay.

Survey: U.K. Workers Trust Bosses Less than U.S. Counterparts
Watson Wyatt says research finds that U.K. workers' attitudes towards senior
management are significantly worse than those of their U.S. counterparts,
with less than a third expressing trust and confidence in their leaders. The
study also points to how a lack of trust hurts employee morale and the
bottom line of the business.
Read more.

Research: Keys to a Successful Corporate Volunteer Program
Executives tend to underestimate the impact several key components may have
on the success of their volunteer programs, according to a recent research
study conducted by LBG Associates and VolunteerMatch. The study identified
the following predictors of volunteer program success:

Recognition of Volunteers
99.9%

Program Structure (employee-friendly)
94.9%

Budget Levels
81.1%

Level of Employee Participation
78.1%

External Communications
75.2%

Providing Paid Time-Off
68.0%

Work-Release Policies
52.1%

Internal Communications
45.4%

Training
40.7%

Staffing Levels
13.2%

Measurement & Evaluation
13.2%

Senior Management Participation
3.1%
Read more (PDF).

Case Study: Serving the Bottom of the Pyramid in Brazil
In fifty years, Casas Bahia has grown from one man selling blankets and bed
linens door-to-door to the largest retail chain in Brazil, offering
electronics, appliances, and furniture. With its emphasis on serving the
poor customer, its low prices, and credit determined by payment history
rather than formal income (70% of CB customers have no formal or consistent
income), Casas Bahia grosses over a billion US dollars a year, and has
invoked deep loyalty in its customers.
Download free the University of Michigan Business School case study on
CasasBahia. (PDF)

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