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Sustainable Development Speech at Oxfam Conference

5 July 2004

Speech by Peter Neilson Chief Executive of the New Zealand Business Council for Sustainable Development

OXFAM New Zealand Fair Trade Seminar Auckland Business Centre 5 July 2004 9 a.m.

I'm delighted to be here today on behalf of the New Zealand Business Council for Sustainable Development (the Business Council) to help launch this seminar on fair trade.

The Business Council is an organisation representing nearly 50 New Zealand businesses committed to sustainable development.

By sustainable development we mean managing society and our businesses in a way that allows for this and succeeding generations to improve their standard of living and quality of life whilst preserving our environment.

Being a Business Council our starting position is that a business needs to be profitable in order to be sustainable. Sustainable businesses also need to be sensitive to the needs of their employees and the communities in which they operate and to minimize their impact on natural resources.

Many of our members have shown that a business that does respond to community aspirations, respects the environment and is socially responsible - can be more profitable. The Business Council’s style is to work cooperatively with other organisations which share our aims and recognise that seeking profits can be compatible with doing good. Our members, which include 6 of the top 10 New Zealand businesses by size, believes they can do well by doing good. A business which wants to exercise corporate social responsibility cannot just think about its own actions.

Many of our members have sought to promote sustainable behaviour amongst their suppliers by taking active steps to manage their supply chain. My colleague Lyn Mayes has developed a supply chain management guide and also organises regular workshops for organisations interested in managing their supply relationships in a way that promotes sustainability. It has been noteworthy in the last decade how, in particular, European based retailers are paying more attention to the circumstances in which the goods they sell are produced.

A similar movement is underway in the USA and although not to the same degree as in Europe ,some similar trends are beginning to appear in the higher income areas of Asia. As retailers increasingly develop their own brands it is likely that these trends will intensify and that suppliers to these chains will be required to provide assurances that their goods were produced in conditions acceptable to the final consumers.

I would like to congratulate Oxfam New Zealand for sponsoring this seminar and for promoting fair trade labelling which the Business Council supports.

Oxfam has been a credible and active thought leader in the Non Government Organisation (NGO) community on the issues of trade access, globalisation and fair trade. Oxfam has been a particularly influential NGO in the area of trade reform. While New Zealand as a richer country has been negatively affected by the barriers to agricultural trade in the USA or in the European Union, the impact of these trade restrictions are much more severe for the countries of the Third World. Such countries often face restrictions in getting access to the richer markets for their agricultural products while at the same time are being asked to open their domestic markets to investment and goods and services from the first world. Oxfam has been willing to point out the deficiencies of the argument against globalisation and trade that has seen Fair Trade used as a the slogan for those who want less rather than more trade and who often see business as the problem rather than as part of the solution.

For the poorest in the world the problem is not globalisation or free trade, it is in fact the exact opposite. The poor are being denied the opportunities to participate in world trade growth and globalisation because of restrictions on access to richer markets for their goods and services. When the USA favours domestic sugar producers and denies farmers in other parts the world the opportunity to participate in the US market or when in our own region, Australia has barriers to tropical fruit imports to protect growers in Queensland, they deny the benefits of trade to Pacific island producers in a way that cannot be sanctioned.

Over the centuries trade has been our greatest ever engine for growth and for improved worldwide living standards. Improving living standards through the growth of trade is much more beneficial than any likely action of a government, whether by way of providing aid or in forgiving debt. Not only are potential trade flows larger then the value of existing aid flows but trade, based on mutual benefit is also likely to be much more sustainable.

Opening up India and China to foreign trade over the past decade has moved hundreds of millions of people out of poverty.

The very real challenge is ensuring that those currently poor in the world are able to participate in the benefits of growth and trade.

The two greatest opportunities to lift the living standards of the poorest in the world is to allow the products of those countries, to have access to the first world markets and to benefit from genuinely democratic reforms in their own countries. Oxfam has been notably active in each of these areas. Earlier in my career I have undertaken projects in countries as diverse as Vietnam, the Pacific islands, Indonesia and in sub-Saharan Africa namely Namibia. I am very much aware of the challenges that Oxfam faces in these and similar countries.

The other reason that the Business Council wanted to be involved in the seminar today was to share the experiences of our members in promoting goods and services designed to address ecological and social concerns.

Those lessons include;

1. The inherent quality of the product being promoted is important. Anyone who has sold Girl Guide biscuits door-to-door with their daughter as I have, knows it is that only a small minority of customers who buy the biscuits purely because the money goes to the Girl Guides. Yes I have had people who have declined to buy the biscuits and have made a donation because they wanted support the Girl Guides but they were people who currently were not eating biscuits (I blame Dr Aitkin’s). The vast majority of people who bought the biscuits did so because they were nice to eat. We know that most new products fail so you need to ensure that the product is inherently attractive to carry the fair trade logo.

2. The Fair Trade label needs to be recognised and have integrity. Labelling will work if firstly it has integrity for a consumer. The consumer has to have confidence that the product was produced under the conditions expected and secondly that people recognise what the label means.

3. After the initial promotion word of mouth recommendations work best. While many people will try something once, the word-of-mouth support of early users is very powerful in making a product, a market leader.

The Chairman of the Business Council Stephen Tindall has indicated that The Warehouse would be interested in promoting a Fair Trade labelled coffee and tea product line provided those issues can be managed.

I would like to thank Oxfam for inviting me today and to offer the Business Council’s support in helping promote Fair Trade. The message for all of us is clear: when you’re faced with a purchasing choice, all things being equal, choose the most sustainable one.

For Information

The NZBCSD was established in May 1999 and is a coalition of leading businesses with a shared commitment to sustainable development. It is a partner organization to the World Business Council for Sustainable Development which is an alliance of 165 international companies, from more than 30 countries.

The NZBCSD Guide to a Sustainable Supply Chain is available on www.nzbcsd.org.nz/supplychain. Companies interested in attending workshops or seminars should contact The Business Council on 09 488 7404.

Bio Peter Neilson

Peter was appointed Chief Executive in April 2004 to spearhead the Business Council’s strategic move towards policy development and advocacy work.

Peter is a former cabinet minister of revenue, customs and works, and was associate minister for state-owned enterprises and finance under the Lange Labour government between 1984 and 1990. Following a period as Leader of the Opposition Economic Advisor, Peter moved to private industry. Working initially in corporate finance, Peter then managed a number of international advisory roles, firstly with Ernst and Young (1994-2002) and subsequently with the New Zealand Institute of Economic Research.

Throughout his twenty-year career as an economist in both the public and private sector, Peter has sought to include social and environmental considerations into his projects and advice. His experience ranges from energy projects, transport solutions and sustainable forestry to social welfare, youth employment and prison reform.

Peter has a Bachelor of Commerce in Economics from the University of Auckland and has attended post-graduate courses in corporate finance and strategic management. He is 49, married with two children and is a passionate thoroughbred racehorse breeder.


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