How far should we take CSR in supplier selection decisions? Veolia and SNCF in the spotlight

Here's a topic that I was going to feature as a brief piece, probably with a little 'how ridiculous' commenting, but actually on reflection got me thinking much more deeply.

It was triggered by two reports.  One here in the Guardian, saying that Labour and Green councillors in  Edinburgh want to exclude Veolia from bidding for public contracts because,

"An arm of the company is involved in the construction of a light railway between Israel and the occupied territories, said the deputation. They argued that the council could deem such activities constituted grave misconduct, and therefore refuse to allow them to participate in any tendering process."

The motion was defeated, but there will be further work done to assess the legality of such a step - which is obviously favoured by many councillors.

Then, in California, a politician is pushing that firms bidding for a railway contract must disclose involvement in taking people to concentration or prisoner of war camps between 1942 and 1944.  As the Telegraph reports,

"The proposal is specifically aimed at SNCF, the French national railway operator, which is expected to apply for a contract to run the new $45 billion (£30 billion) high speed link between Los Angeles and San Francisco."

So...a number of questions from a procurement perspective.  For how long should we hold firms responsible for their historical actions?  I 'm sure some US firms - or their predecessor organisations - acted in a manner we would abhor now in terms of equality or civil rights issues.  Or crimes against Native Americans perhaps?

And what about UK firms whose ancestors were involved in the slave trade, oppressing the Scots, or slaughtering the Irish? And the many German, Italian or Japanese firms who contributed to the World War II effort in some manner?  If we go back far enough, I don't suppose any country in the world is totally free of sin.

I don't pretend to know the whole story of SNCF and I wouldn't for a moment play down the feelings of Holocaust survivors or those - including some of my best friends - who lost relatives in the Holocaust. But where do we draw the line from an elapsed time point of view in business and procurement terms, and how strongly should we hold current management or shareholders responsible for past actions?

The Edinburgh issue is perhaps even more complex.  How far should we go to encourage suppliers to 'do the right things'?  And in many cases, how can we tell what those 'right things' are?  Palestine is a horribly complex issue; I wouldn't want to judge the rights and wrongs of what Veolia has done.   But if we found a potential supplier was involved in rainforest clearance, or was involved in trading 'blood metals / minerals'?  At what point should we say, "sorry, you're off our list"?

Corporate Social Responsibility is throwing up these and other difficult issues.  It suggests that we will see more focus on supplier information management (good news for firms like Dun & Bradstreet and Achilles); but ultimately, procurement professionals and others will have to make some tricky decisions about the sort of firms we want to do business with, and how the 'power of the purchaser' is best used for the greater good.

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