Strategic Corporate Social Responsibility: 12/1/12

Wednesday, December 5, 2012

Strategic CSR - Organic food

This will be the last CSR Newsletter of the Fall semester.

Have a great holiday season and I will see you in 2013!

The article in the url below charts the evolution of the organic food industry in the U.S. from the perspective of one of its founders—Michael Potter, founder of Eden Foods (http://www.edenfoods.com/). The article reports that, in many respects, the terms “organic” and “big food” are becoming synonymous:

“The fact is, organic food has become a wildly lucrative business for Big Food and a premium-price-means-premium-profit section of the grocery store. The industry’s image — contented cows grazing on the green hills of family-owned farms — is mostly pure fantasy. Or rather, pure marketing. Big Food, it turns out, has spawned what might be called Big Organic.”

Many of the small and local brands, which many consumers probably believe remain ‘small and local,’ are now ‘big and remote’:

“Bear Naked, Wholesome & Hearty, Kashi: all three and more actually belong to the cereals giant Kellogg. Naked Juice? That would be PepsiCo of Pepsi and Fritos fame. And behind the pastoral-sounding Walnut Acres, Health Valley and Spectrum Organics is none other than Hain Celestial, once affiliated with Heinz, the grand old name in ketchup. Over the last decade, since federal organic standards have come to the fore, giant agri-food corporations like these and others — Coca-Cola, Cargill, ConAgra, General Mills, Kraft and M&M Mars among them — have gobbled up most of the nation’s organic food industry. Pure, locally produced ingredients from small family farms? Not so much anymore.”

The result of all this consolidation and commercial interest, according to Potter, is the dilution of the meaning associated with the organic label and all the health benefits that he believes stem from good, wholesome food. One example of how the influence of agri-business is affecting the final product is in the compilation of the National Organic Standards Board (http://www.ams.usda.gov/AMSv1.0/NOSB) (increasingly corporate) and the Board’s list of what substances can be included in organic foods and still continue to call the final product ‘organic’ (increasingly long):

“As corporate membership on the board has increased, so, too, has the number of nonorganic materials approved for organic foods on what is called the National List. At first, the list was largely made up of things like baking soda, which is nonorganic but essential to making things like organic bread. Today, more than 250 nonorganic substances are on the list, up from 77 in 2002.”

Take care

David

Bill Werther & David Chandler

Strategic Corporate Social Responsibility: Stakeholders in a Global Environment (2e)

http://www.sagepub.com/strategiccsr2e/

Instructor Teaching Site: http://www.sagepub.com/strategiccsr/

The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/

Has ‘Organic’ Been Oversized?

By Stephanie Strom

July 8, 2012

The New York Times

Late Edition – Final

BU1

http://www.nytimes.com/2012/07/08/business/organic-food-purists-worry-about-big-companies-influence.html

Monday, December 3, 2012

Strategic CSR - BP

I found the recent BP settlement with the U.S. government regarding the 2010 Deepwater Horizon oil spill in the Gulf of Mexico interesting because of the individual indictments they contained:

“Donald J. Vidrine and Robert Kaluza were the two BP supervisors on board the Deepwater Horizon rig who made the last critical decisions before it exploded. David Rainey was a celebrated BP deepwater explorer who testified to members of Congress about how many barrels of oil were spewing daily in the offshore disaster. Mr. Vidrine, 65, of Lafayette, La., and Mr. Kaluza, 62, of Henderson, Nev., were indicted on Thursday on manslaughter charges in the deaths of 11 fellow workers; Mr. Rainey, 58, of Houston, was accused of making false estimates and charged with obstruction of Congress.”

As the article in the url below indicates, this represents a shift in emphasis. While the prosecution of individuals for wrongdoing in business settings was common up until the 1970s, after Watergate (when companies were found to be using slush funds to bribe foreign government officials, as well as to donate secretly to Nixon’s re-election campaign), Congress began to hold companies responsible for actions committed by individuals on behalf of the organization:

“Legal scholars said that by charging individuals, the government was signaling a return to the practice of prosecuting officers and managers, and not just their companies, in industrial accidents, which was more common in the 1980s and 1990s.”

This focus on the organization was reflected in legislation, such as the Foreign Corrupt Practices Act (see: http://strategiccsr-sage.blogspot.com/search/label/FCPA), and standardized throughout the judicial system in the U.S. via the 1991 Federal Sentencing Guidelines. This has meant that individual culpability has been de-emphasized for the last few decades in favor of punishing the corporation:

“[Jane Barrett, a University of Maryland law professor and former federal prosecutor] noted that it was unusual for the Justice Department to prosecute individual corporate officers in recent years, including in the 2005 BP Texas City refinery explosion that killed 15 workers, where only the company was fined.”

This decision by the government to indict two BP Managers for manslaughter and hold another one in contempt of Congress, therefore, suggests a recognition that, since corporations cannot be thrown in jail, focusing on organizational liability and letting individual perpetrators off-the-hook is an insufficient disincentive to commit harm:

“They are the faces of a renewed effort by the Justice Department to hold executives accountable for their actions. While their lawyers said the men were scapegoats, Attorney General Eric H. Holder Jr. said at a news conference, “I hope that this sends a clear message to those who would engage in this kind of reckless and wanton conduct.””