Transcript Main Function of GSCM

Social Issues
Social Criticism of World Trade
 In 1999, the former UN Secretary General Kofi
Annan proposed the Global Compact operations in
four areas:
1. Human rights protection and avoidance of abuses
2. Labor practices including collective bargaining, elimination
of forced labor, abolition of child labor and elimination of
discrimination
3. Environmental support for precautionary steps, taking
environmental responsibility, and supporting development
and diffusion of environmentally friendly technologies
4. Anti-corruption in all forms including extortion and bribery
Other Initiatives Toward World Trade
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International Labor Organization
OECD
World Bank
The European Union
Global Reporting Initiative (GRI)
Corporate Social Responsibility
 A form of corporate self-regulation integrated
into a business model
 The deliberate inclusion of public interest into
corporate decision-making, and the honoring of
a triple bottom line: People, Planet, Profit
 Benefits of CSR including:
 To help recruitment and retention
 To offset risk related to environmental
accidents
 To build upon brand differentiation
 To obtain license to operate
Drivers for Corporate Social
Responsibility
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Ethical consumerism
Globalization and market forces
Social awareness and education
Ethical training
Laws and regulation
Crises and their consequences
Stakeholder priorities
Approaches for Corporate Social
Responsibility
 Community-based development project
 Establish education facilities for local
community
 Change from short-term relationships with
many suppliers to long-term relationships with
fewer suppliers
 Develop a certain level of environmental and
social responsibility together with their
suppliers
 Spend time on explaining and helping suppliers
to improve these requirements
Supplier Code of Conduct
 To govern environmental, health, safety,
management system, ethics and human rights
issues in global supply chain
 Different sources of Code of Conduct
 United Nations
 Industry wide
 Individual cooperation
Case Study :Building sustainable supply
chain in Brazil
ArcelorMittal’s supply chain is large and complex,
ranging from mining and raw materials to
highly sophisticated technological products and
activities, and at any one time the purchasing
department manages relationships with over
60,000 suppliers and contractors. Enforcing
high and consistent standards of corporate
responsibility in these circumstances is a tough
challenge, but ArcelorMittal has made that
commitment, and is working to achieve it.
ArcelorMittal’s Challenges
 The company’s position in the steel industry
brings unique opportunities and unique
responsibilities, and its ability to operate
successfully is immeasurably enhanced by a
reputation for responsible and ethical business
practice.
 In Brazil it can be challenging to persuade the
managers of small- and medium-sized
enterprises to introduce sustainability into their
management processes.
ArcelorMittal’s Approach
 working with 15 companies in its supply chain,
helping them to incorporate social and
environmental standards into their business
practices
 used a number of their tools and corporate
social responsibility indicators
 to help implement new processes and
measure progress
 took part in two regional seminars, where
companies from all seven sectors had the
chance to share expertise and knowledge
The Outcome
 Promoted a closer relationship between
ArcelorMittal and its suppliers, a relationship
built on trust and credibility
 All 15 companies in the group developed their
own codes of ethics and 11 created new
initiatives to save energy, water and paper
 Better dialogue between ArcelorMittal and
suppliers create a robust partnership
Discuss the following questions:
 What problems do AlcelorMittal address?
How does TEAR program help solve these
problems?
 What issues and challenges do corporate
social responsibility present? What can be
done to address these issues?
 What are the business as well as the
technology issues that should be addressed
when ArcelorMittal built sustainable supply
chain in Brazil?