Vol. 5 Num 568 Sat. December 31, 2005  

Corporate Social Responsibility - III
Vendors encouraged to adopt ethical practices

Responsible corporate houses not only embrace ethical business practices themselves but also encourage their vendors, product and service suppliers and other third parties to internalise those.

Directors of Moni Printers and Packages Ltd, a vendor of Novartis (Bangladesh) Ltd, were not aware of the human rights, environment and labour standard issues -- key elements of corporate social responsibility (CSR), let alone implementing those in their factories.

But after starting to work with Novartis, one of the leading multinational pharmaceutical companies, they found if there is a will, there must be a way. A lot of changes have already taken place in the factory of Moni Printers in the past couple of months.

There are first aid boxes, fire extinguishers and adequate exit in case of fire at Moni Printers now. Hearing alarm, coming out of the building in case of fire and above all ensuring an environment that is safe for the workers are still a far cry for the small and medium business houses in the country.

"We don't have any child worker now in our factory although it is very common in printing industry," said Akram U Khan, executive director of Moni Printers.

"We check our machinery every day before starting work and clean them every month. Workers don't work after 7pm," he explained. "We had to increase the number of employees to let them enjoy weekly and other public holidays."

As per the deal with Moni Printers, Novartis officials can inspect its factory anytime and ask the workers whether they are forced to work beyond schedule, said the executive director of Moni Printers that employs about 150 people with an annual turnover of Tk3.20 crore. Workers get gratuity, festival bonus and adequate compensation in case of termination.

"We had to spend additional money for all these changes but Novartis came up with all supports and finally we are benefited," said Akram.

In case of supplying goods it is ensured that value added tax (VAT) has been paid properly, he said adding that without VAT document, Novartis would not accept any consignment.

"We are going to shift our factory to Ashulia where we will have more and modern facilities," Akram revealed.

As a commitment to Global Compact in 2003, Novartis has extended support to its suppliers by giving priorities to those who believe in the same societal and environmental values it has adopted.

"Our corporate citizenship policy, code of conduct and commitment to the 10 principles of the United Nations Global Compact embrace supports and enact a set of core values in the areas of human rights, labour standards, environment and anti-corruption," said Rasna Hasan, manager (Corporate Affairs) of Novartis.

Novartis had assessed 140 existing suppliers and collected relevant information about them through a standard questionnaire in early 2004. It provided them with extensive information of corporate ethical practices through an orientation programme during phase one.

The assessment criteria were mainly based on Novartis standards, national and international laws and regulations.

After one-to-one orientation session, Novartis also extended its support to designing its management system in light of the criteria.

"Our objective is not to conduct a one time exercise but establish a continuous process for improvement. After completion of phase one, we have selected 125 vendors who best compliment our basic guiding principles," Rasna explained.

The second phase concentrated on building basic understanding on human rights, fair working conditions, and health, safety and environment protection.

These 125 vendors have been classified in four categories based on duration, volume and level of risk associated with their operations. Novartis continues dialogue on random basis, and carries out assurance visits.

"We will work together to improve the level of compliance with a budgeted time limit in case of unsatisfactory performance. And we will discontinue relationship in case of failure to improve," Rasna maintained.

Differences in varied nature exist in business practices in Bangladesh and this is why it is more important to work collaboratively with third parties to achieve the goals of corporate citizenship on a long-term and sustainable basis, she went on.