Agenda

1
Agenda

• Steve Homer
• Flamingo in two slides
• The day it all went wrong
• A solution emerges

• Caroline Driver
• Business Ethical Audits local partnership to
  Regional business solution

2
Flamingo Group CG Scope

• Both Social and Environmental
• Our own companies worldwide
• Our supply partners world wide 225 companies
  and over 1200 sites
• Governments, Trade Unions, Non Governmental
  Organisations, the media and anyone interested in
  the activities of Flamingo and their suppliers
  worldwide
• International certification bodies, private
  labels, trade associations and working groups.

3
The Flamingo Group

• 300M turnover
• 9000 employees
• 6 Farms in Kenya
• 1 Farm in S Africa
• Sourcing in 23 countries across 4 continents
• 4 UK packing sites
• Supplying 7 UK supermarkets
• 1M packs of vegetables per week
• 1.5M bouquets of flowers per week
• 18 Million Flower Stems Per Week

4
Flamingo Operations Our Challenge

• Ability for the business to react at short notice
  and remain flexible without carrying surplus
  stock or logistics capacity.
• Our orders arrive at 10pm and have to be
  delivered to depot within 24 hours. Forecast
  accuracy is 75
• Provide our customers with an order service level
  of 97 or higher
• Real time supply chain 24/7 365 days a year

5
Or from here to here..
..In 72 Hours
6
Licensed to trade
7
Flamingo success story

• Established in Kenya for 23 years Investment in
  Kenya in excess of 100m over the last 20 years
• Totally vertically integrated between Kenya and
  the UK from growing to airfreight to marketing to
  distribution.
• Geographically diverse land bank of over 2,700ha,
  97 of the land is owned
• Reduction in chemical use by 80 through our own
  integrated pest management company

8
And then one day..

• Write to your local supermarket asking them to
  put pressure on Kenyan flower growers to improve
  conditions.
• Marie Claire Magazine March 2003

9
First Reaction

• Contact PR company
• Issue statements
• Contact customers
• Damage limitation
• All UK focused activity
• Corporate denial

10
It just got worse.

• Supermarket task team sent to Kenya
• Interviews with NGOs and workers
• Increased allegations and anecdotal evidence
• Dysfunctional and weak local trade union
• Industry disengaged with local community
• Lack of trust in the whole Kenyan industry

11
What did we do wrong ?

• Reliance on single stakeholder view
• Industry standards ( Kenyan Flower Council )
• Industry auditors ( Blue Chip Europeans )
• Closed doors
• Not listening to detractors ( NGO nutters )
• Looking at the positives ( Best in the industry )
• Underestimated the new media age
• SMS messages, Yahoo webmail
• 24 hour news media

12
Provenance
13
A unique solution emerges

• ETI suggestion to find a local independent
  partner
• Participatory audit process using local auditors
  with awareness of local issues, attitudes and
  tensions.
• Pre-audit awareness
• Flexible audits tailored to the Flamingo workers
  and not the Flamingo customers
• Text based reports not tick boxes
• Africa Now a livelihood NGO more acceptable
  than a frontline campaigning organisation

14
Our Concerns about NGOs

• Disorganised never been in business
• No concept of commercial timeframes
• Campaigning organisations looking for trouble
• Idealistic not Pragmatic
• Dont know our business

15
What we got.

• Auditors who knew about local tensions of race,
  tribe, gender Most worker tensions uncovered
  were cultural or accidental and not management or
  institutional
• Cost effective solution and more diligent
  auditors . Auditors with an interest in using
  their skills to suggest a solution to the
  problems, same cost as blue chip auditors and no
  PR company
• Credibility with our UK customers and media
  Independent verification and a positive story of
  and enlightened company facing up to its own
  limitations.
• An emotional health check of our company Not
  just a certificate to hang in the foyer of head
  office.

16
Successful partners
17
Africa Now