5.4 Cooperation with Other Companies

Why should you cooperate in a pre-competitive manner with other companies to sustainably source a particular commodity?

There are two main reasons for which companies should seriously consider options for cooperation:

Alignment of standards and certification
It is confusing and time consuming for farmers to have to comply with different (sustainability) requirements for different customers. Alignment of standards and certification systems is attractive to both farmers and the companies sourcing from them. If they can comply with a standard accepted by multiple companies, farmers reduce their cost of compliance and possibly reduce their dependence on a single company. For the interested companies, there is a chance that the sustainability criteria are better understood and met by the farmers, which may result in lower costs for the companies involved.
Better support to farmers
If efforts to support the farmers in implementing the sustainability standard(s) can be coordinated and shared between various companies, more resources can become available and more results can be achieved at lower cost for each company.

Example 17 below shows how companies cooperate to achieve these two goals within SAI Platform.

Example 17. Cooperation amongst companies within SAI Platform

What is SAI Platform?

SAI Platform was launched in 2002 by Groupe Danone, Nestle and Unilever who decided to join forces to “promote the development of sustainable agriculture worldwide”. 13 years later, the organisation has over 70 members representing organisations from the whole food value chain, from farmers to retailers. Together and in a strictly pre-competitive manner, these groups identify good agricultural practices (which are called “Principles and Practices” - P&Ps). Thereafter, they implement these P&Ps independently throughout their supply chains – using other supporting tools and services also jointly developed within the Platform.

Alignment of Standards

At the start, the focus of SAI Platform members was to reach a common understanding of sustainable agriculture, and thereby to align on the definition of P&Ps for specific commodities. Drawing from key existing internal and external standards, companies jointly elaborated a very complete set of P&Ps along the economic, social and environmental pillars of sustainability. This was done for beef, combinable and vegetable crops as well as coffee, dairy, fruit etc. The P&Ps were tested on the ground through various companies’ pilot projects and programmes, and improved.

Many companies thereafter fully adopted these joint P&Ps or drew from them to elaborate or revise their own internal codes, often feeling that this made them stronger and more credible. Several firms reported that it was easier to ask their suppliers and the producers at the start of the value chain to comply with requirements that are similar to those of other buyers, rather than asking them to comply with a multitude of different codes.

Support to Farmers

But member companies quickly felt the need to do more than align standards. Together, they chose to create other tools designed to help farmers implement the standards. A series of technical and practical tools were developed, such as an Agriculture Standards Benchmark Study, a Water Impact Calculator, a Financial Tool on farm sustainability etc.

Three specific tools were developed by the Platform members in order to help farmers assess their level of implementation of the P&Ps, and the sustainability impacts of such implementation:
- a concise and simple Farm Sustainability Assessment (FSA) to check compliance of their practices with the P&Ps;
- the Sustainability Performance Assessment (SPA) guidelines to measure the real impacts of practices on the sustainability of a farm.

- the Farmer's Partnership Guide to explain different hurdles and drivers classified along four categories: psycho-social factors; economic factors; resources factors; and political factors.

And Many More...

Within SAI Platform, food and drink companies jointly develop many other products and services aimed at promoting sustainable sourcing. This guide is a good example of such other products. It is also part of a larger training programme including a two-day Master Class entitled “Embedding Sustainable Agriculture Strategies in Companies” jointly developed with the Swiss business school International Institute for Management Development (IMD) – see Example 21.

Since sustainable agriculture is a continuous improvement process based also on continuous learning, SAI Platform regularly organises seminars and webinars for its members, inviting experts from around the world to address the most important sustainability issues. Topics discussed at these events have included: soil health, sustainable pest management, water and agriculture, organic vs. sustainable, biodiversity.

Source: http://www.saiplatform.org.

 

Before deciding for or against cooperation with other companies, you may ask yourself the following questions:

  1. Is my company clear on competition law?
  2. Do other companies source from the same farmers as your company, whether the same raw material or another raw material from the same land (including rotation crops)?
  3. Is there any opportunity to align your company’s sustainability requirements with the requirements set by the other companies? What are the pros and cons?
  4. Do these other companies already provide support to farmers to achieve sustainability requirements, or do they plan to do so? Do they have knowledge and/or capacities from which your own support activities could profit? Can your company bring in knowledge and/or capacities from which the potential cooperation partners can profit?
  5. Is there a willingness on the part of the potential cooperation partners to work together on standard alignment and/or farmer support?
  6. Are there any legal (especially: antitrust) or commercial barriers against cooperation in this field? If so, can they be overcome?
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