CSR Corporate Social Responsibility as most effective strategy to implement EU Directive 1099/2009 on farms

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On January 19, 2012, EFSA published their assessment report on the new Directive EU 1099/2009. This documents provides valuable background information on how this directive was established and how it has been influenced by the stake holders. It also demonstrates the future direction of the EU when it comes to safeguarding animal welfare within the near future.

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CSR Corporate Social Responsibility as most effective strategy to implement EU Directive 1099/2009 on farms

  1. 1. CSR Corporate Social Responsibility as most effective strategy to implementEU Directive 1099/2009 on farmsOn January 19, 2012, EFSA published their assessment report on the new Directive EU 1099/2009.This EU directive concerns welfare management related to food producing animals and animals usedfor experimental purposes. Although the mainfocus is on welfare during the slaughter process, thenew directive will have a major impact on handling sick and cripple animals on farms. Because thecosts involved in euthanizing these animals, this subject is not particularly popular under farmers(most farmers even don’t know that killing animals on the farm is restricted to only those methodsdescribed in directive EU 1099/2009). The question what the best strategy will be safeguardinganimal welfare of these farm animals in the near future. According to our vision, Corporate Social Responsibility CSR is probably the most important part of the EU strategy to implement the directive on farm level. Retailers who included animal welfare in their corporate strategy proved that that enforcing this strategy throughout the entire production chain (including farmers) can be extremely successful to underline what their customers demand. By doing so, these pro-active retailers have a bigger impact on implementing animal welfare that branch organizations of veterinary services.Impact assessment Directive EU 1099/2009The Impact Assessment provides a perfect overview on EU’s strategy for the Protection and Welfareof animals. It describes the discussions between the EU Commission, the EU Council, the EuropeanEconomic- and Social commission and the representatives of the European stakeholders on how toimprove animal welfare standards within the EU. The comparison of the options provided in thereport indicates that there is no single option that is able to address all problems effectively andefficiently.The main outcome is that all participants agreed with the problem definitions, but they also couldnot agree on one-fits-all answer. The problems are too complex and the opinions of the mainstakeholders too diverse, but there are clear indications how the EU foresee how the EU strategy for2013 - 2015 will be implemented: – High EU standards on animal welfare as competitive advantageThe competitiveness of EU producers should not be limited to production costs. Animal welfare is anattribute that could be part of competitive advantage if properly marketed. Focusing the productionto high margin products and development of know-how on animal welfare could contribute tosafeguard productions in regions where competition on price is in any case not sustainable. – Governance, participation, good administrationThe report refers to the Lisbon Treaty where it comes to address the involvement of the civil society.This treaty has developed a new governance approach where the civil society is more involved in theprocess of setting common rules. This is particularly relevant for animal welfare where civil societyhas constantly and increasingly expressed its interest in the field. – Import meat from countries that follow the EU StandardsThe report mentions the competitive advantage of New Zealand and Australia, who introduced highanimal welfare standards over 10 years ago and who are today very competitive exporters of live Visit www.N2GF.com For more information
  2. 2. animals, milk and meat. The EU concludes that high welfare standards are compatible with highcompetitiveness on the world market, and thus, the industry within the EU should follow the samestrategy. – Concentrate on the main meat export countriesRaise awareness of animal welfare in those countries that export to the EU. There are only fewcountries that export meat products to the EU today: Brazil and Thailand provide 90% of the poultrymeat imports; Brazil and Argentina 60% of the beef; and New Zealand 85% of the sheep meat. Thiscould be done in bilateral agreements, but it is more likely that they will use the mechanism that hasbeen proven successfully in the UK: through strict demands from large international retailers whodemand their producers to follow their CSR strategy. 55% percent of all animal based products areproduced following the guidelines of the retailers. Those rules are much stricter than the current andfuture EU rules when it comes to the implementation of animal welfare standards throughout theentire production chain. – Through CSRSocial responsibility as an integral part of the wealth creation process which, if managed properly,should enhance the competitiveness of business and maximize the value of wealth creation tosociety.General objectives of the EU strategyThe proposed new EU strategy (2012 – 2015) on animal welfare would have two general objectives: To give animals a level of protection and welfare that reflects European societal concerns To ensure fair competition for the EU animal sector in the context of the internal market.These general objectives touch upon economic, social, environmental, public health and consumerwelfare objectives, also with an international dimension.Overview on the European poultry and livestock marketEU Market: Number of animalsLive animals are used for economic purposes by various industries and businesses. In terms ofnumbers of animals, the farming sector is the largest user, with at least 2 billion birds (chickens,laying hens, turkeys, etc.) and 334 million mammals (pigs, sheep, goats, cattle, fur animals).EU Market: Economic valueIn economic terms, livestock farming in the EU is worth € 149 billion every year. Of this, pigs andpoultry (subject to specific EU provisions) represent 38% (i.e. € 57.6 billion). Animal output valuerepresents 41 % of the overall agricultural output (€ 363 billion in 2008).EU Market: EmploymentIn terms of employment, it is estimated that some 4 million people, most of them farmers, handleanimals in the course of their business activity while 16.4 million people work regularly on 7.3 millionagricultural holdings (9 million Annual Work Units in 2007). Work related to animals should includearound 3.7 million people. In addition to the farming sector, there are around 200.000 peopleworking with animals in slaughterhouses. Visit www.N2GF.com For more information
  3. 3. EU Market: TransportsTrade of cattle transported between Member States and with third countries in 2009 has beenestimated at 4 million heads. The equivalent number for pigs has been estimated at nearly 28 millionheads.Key issues on communication with EU consumersLack of knowledgeEven though consumers later have become interested in animal welfare and scientists now knowmore about the issue, the market place still does not encourage producers to change their housingsystems, as this would imply new investments and sometimes additional production costs. Anotherreason for this could be that there is little information to consumers on how animals are treatedduring production processes. Many farmers also lack information about alternative systems andoften do not see any advantage in changing their processes into a more animal friendly way. Animportant problem is that, as in the example concerning pigs, the use of modern, more animalwelfare friendly systems of production often conflicts with economic pressure on operators to reducecosts.Improving knowledge on animal welfare: Common interestOn January 19, 2012, The Commission presented an impact assessmenton the European UnionStrategy for the Protection and Welfare of Animals1, including the main findings of the evaluation, inwhich the following problems related to the EU policy on animal welfare were identified: insufficientenforcement, competitiveness of farmers, lack of communication to consumers and stakeholders.European consumersAnimal welfare is a Community value. The protection of animals is a matter of public concern thataffects consumer attitudes towards agricultural products. In the survey, the EU acknowledged thatalthough animal welfare is a worry for 64 % of the population, animal-welfare-friendly productsusually have a low share of the market.The gap between consumer views and market sharesThere is a clear gap between consumer views and market shares in this regard. Studies show thatconcern for animal welfare is only one of the factors affecting the consumer’s choice of a product. Onthe consumer side, except for eggs, there is no specific EU instrument that could encourageconsumers to express a choice in favor of more animal welfare friendly products.Unclear communication with the consumersConsumers across the EU are confronted with a great variety of animal welfare attributes, but theyhardly understand what is behind all these claims of the producers. They may rely on authorities orparticular brand names, assuming that high animal welfare standards are part of the product’sattributes. To allow consumers to understand and compare such attributes and to allow producers tomake credible claims as regards animal welfare, the credibility of animal welfare claims should bevisualized through a system that allows comparison.1 http://ec.europa.eu/food/animal/welfare/actionplan/docs/impact_assesment_19012012_en.pdf Visit www.N2GF.com For more information
  4. 4. Animal products produced outside the EU are not blocked at the border, even when they areproduced without respect for animal welfare The efforts of the EU to harmonize the level of animal welfare within the Community and to increasethe welfare standards may have effect on the competition with producers from outside the EU.Measures adopted by the Member States in the field of animal welfare can have an impact that isfelt across national borders. In particular, they can create obstacles to trade between Member Statesand distort competition. Farmers’ organizations insisted therefore on including the costs and therisks of importing animals from outside the EU. Animal welfare organizations agreed with theFarmers’ organizations and stressed the need to widen the scope of EU policy, to give the public andstakeholders more education and information on animal welfare issues and under what animalwelfare conditions the products were produced, within and outside the EU. This would give theproducers the possibility to differentiate their products on the bases of better animal welfareconditions during production of animal based products.Four options for future EU strategy on improving animal welfareBased on the analysis of the problem drivers, the specific objectives of the new strategy on animalwelfare can be summarized as follows:Objective 1:EU non legislative actions; (strengthening Member States compliance to improveenforcement of the EU legislation) in a consistent approach across the Member States;Objective 2:Sector self- regulation (Benchmarking voluntary schemes) to provide for open and faircompetition for EU business operators that implement or go beyond EU requirements;Objective 3:Specific EU legislation (Establishing a European network of reference centers) to improveknowledge and awareness of EU business operators regarding animal welfare;Objective 4:New EU Framework Law (Streamlining requirements for competence and using animalwelfare indicators) to improve the coherence of animal welfare across animal species.Indicators for specific objective 1: to improve enforcement of the EU legislation Rate of infringements, rate of inspection; number of complaints addressed to the Commission on animal welfare; number of ongoing EU infringement proceedings. Annex 6A contains tables summarizing data submitted by the Member States for 2008 on the numbers of production sites subject to inspection, inspected production sites, inspected production sites without non compliance and detected non compliance that required immediate action for administrative or criminal penalties. Number of official national or regional guidelines on animal welfare aiming at enforcing EU legislation (this would need a specific collection work). For example, in the UK a number of local authorities have an animal welfare charter. Number of farms adhering to a specific animal welfare certification scheme or having an animal welfare component in their scheme.Indicators for specific objective 2: to provide for open and fair competition for EU businessoperators that implement or go beyond EU requirements Market share of EU producers having stricter animal welfare national rules and analysis of their investment and operating costs. Level of importation of products from third countries having lower legal standards the EU. Visit www.N2GF.com For more information
  5. 5. Number of animals covered by equivalent legal provisions in third countries. Eurobarometer surveys on the level of awareness of EU citizens and evolution on time.Indicators for specific objective 3: to improve knowledge and awareness of EU business operatorsregarding animal welfare Number of education bodies providing animal welfare curriculum for specific professions related to animals. Number of professional schools having specific animal welfare programmes in their curriculum. Number of companies having animal welfare as part of their corporate social responsibility. Research funding (see current level of resources in the baseline). Number of publications on animal welfare; Number of brevets registered related to animals welfare. Number of animals exempted from experiments due to the validation of alternative methods. Number of non-human primates used in scientific procedures in the EU.Indicators for specific objective 4: to improve coherence of animal welfare across animal species Level of discrepancies between national animal welfare standards on dogs and cats based on the most critical animal welfare problems identified by the Council. Level of discrepancies between national animal welfare standards on dairy cows and beef cattle based on the indicators of the welfare quality project. Level of discrepancies between national animal welfare standards on farmed fish based on the most critical welfare problems identified by the EFSA. Level of discrepancies between national animal welfare standards on rabbits based on the most critical welfare problems identified by the EFSA.Corporate Social Responsibility CSRmentioned in the impact assessmentThere are many ways to define CSR. What they have in common is that CSR describes how companiesmanage their business processes to produce an overall positive impact on society. The phenomenonCSR is a value concept that is susceptible to particular ideological and emotional interpretations.Different organizations have framed different definitions - although there is considerable commonground between them. The most used definition is the one defined by The World Business Council forSustainable Development. In its publication Making Good Business Sense by Lord Holme and RichardWatts, used the following definition: Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at largeThe European CSR model is much more focused on operating the core business in a sociallyresponsible way, complemented by investment in communities for solid business case reasons.Although commonly used in other settings, defining animal welfare as part of a corporate CSRsetting is not new. These are some of the pages where the EU refers to CSR: Visit www.N2GF.com For more information
  6. 6. Definition CSR2, page 62Corporate Social Responsibility: "A concept whereby companies integrate social and environmentalconcerns in their business operations and in their interaction with their stakeholders on a voluntarybasis".Overall summary, Page 125Overall summary: some important national players of the food chain at different steps (mainly foodretailers and food services) have included animal welfare in their CSR. The phenomenon isparticularly noticeable in the UK but not exclusively. Important other players of the food chain do notmention animal welfare in the CSR and the number of examples quoted below is not comprehensivebut should not be interpreted as representing the majority of the food sold in the EU.Option 2, Page 42The framework created by Option 2 could also be later used in a context of further EU initiatives onCorporate Social Responsibilityor Public procurement initiatives.Corporate Social Responsibility and procurement policy, page 101As regard Corporate Social Responsibility (CSR) or procurement policy, there is presently no EUinitiative to introduce animal welfare among the item that would be part of CSR or procurementpolicy.2 http://ec.europa.eu/enterprise/policies/sustainable- Visit www.N2GF.com For more information
  7. 7. Examples of Corporate Social Responsibility mentioned in the impact assessment Retailers UKpage 125: TESCO, Market share UK 30.7%page 126 - 127: COOP UK, Market share 8%page 127 - 128: Sainsburys, Market share 16%Total UK 55% market share for retailers with animal welfare included in their CSR Other EU Retailer organizationspage 125 - 126: Italy: COOP, Market share Italy 15%page 128: Germany: Rewe, second largest in Germany and Eastern Europe Fast food retailersPage 128; Mc Donalds, Market share worldwide 19% in 2007 (!!) largest fast food retailer in the worldPage 129: Burger King, market share worldwide 2%in 2007 (!!)page 130: Multinational corporations/global player: UNILEVER, global market leader in food categories, number two in laundry and daily hair care productspage 130: Multinational corporations/global player: IKEA, market share between 2010: 5 to 10% world wide, depending on commodity Visit www.N2GF.com For more information

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