Last November, Lebanon’s Health Minister revealed a shocking truth. “The Lebanese citizen’s food is not only dipped with sweat, but also in diseases and microbes,” he said.During a news conference, the minister named and shamed numerous supermarkets, bakeries, butchers and restaurants that had been violating food safety standards as revealed by a nation-wide inspection campaign.Since that day, several inspection campaigns have followed, eventually prompting lawmakers to approve a new food safety draft law that aims to reform the way the government handles food safety issues.If approved by Parliament, the draft law, which aims to improve coordination between ministries over food safety, will pave the way for the government to form the Food Safety Lebanese Commission (FSLC).
The commission will be administered by a seven-member board of food safety experts and will be responsible for overseeing the implementation of the law, which will have a significant impact on economy and public health given the size of Lebanon’s food industry.
The $1.7 billion Lebanese food industry accounts for almost 20% of factories in Lebanon and employs 25% of the total workforce while food products represent the largest category of exports.Promoting food safety, however, is not the government’s responsibility alone. In fact, the private sector assumes a greater responsibility in this regard.
How should organizations operating in the food industry shoulder this responsibility?
By simply incorporating Corporate Social Responsibility into their daily business operations. In other words, companies are required to integrate ethical values and standards related to food safety throughout the supply chain starting with farming, industrial production, the distribution of products to end consumers and ultimately waste disposal.
Why should organizations shoulder this responsibility?
Because failing to do so can have significant negative repercussions on their businesses in terms of brand reputation, lower sales and consequently smaller profits.
Corporate Responsibility in the Food Chain
In the context of CSR the food sector faces specific challenges in particular for three reasons. First, the food sector has a high impact and strongly depends on natural, human and physical resources. Second, as food covers basic human needs people have strong views on what they eat.
This leads to a complex set of requirements for the food sector regarding the production of the raw materials (animal welfare), the environmental (e.g. energy and water use; waste) and social (labor conditions) conditions along the whole value chain as well as the quality, healthiness and safety of products. Third, the food chain has a unique and multifaceted structure. Since small and large enterprises differ in their approach to CSR, this implies potential conflicts regarding CSR involvement in the food supply chain.
Pressure exerted on companies to take up CSR differs depending on which industry they operate in and its economic, social and environmental impact. When it comes to the food industry, the public’s expectations are high.
Given rising public scrutiny, it is not surprising that especially leading food companies with strong brands and large multinational retailers are actively involved in CSR initiatives in the realms of environmental as well as social issues. They intensively use formal communication channels such as standards, codes of conduct and reports to inform interested parties about those endeavors.
Furthermore, ethical issues relating to procurement processes have been under special public scrutiny because of the danger of power abuse and unfair practices. Bargaining power in the food sector rests often with large processors and retailers while their suppliers, partly located in developing countries, can often only accept the offers they receive.
Firms with a positive CSR record are more able than opportunistic rivals in attracting morally motivated employees, customers or supply chain partners. As a consequence moral hazard and thus agency and transaction costs are reduced.
Also in the case of external pressure from organized citizens which can take effect via governmental policies or through NGOs, CSR can be an integral part of profit maximization.
Large food processing like Coca Cola and Nestle, and retail companies suffered in the past significant losses to their brands and their overall reputation because of inadequate labor conditions and/or lack of environmentally responsible conduct in their subsidiaries in developing countries. Also, insufficient quality of products sold in those countries has led to considerable pressure from activists in Western countries and partly resulted in boycotts of products of the corresponding companies.
Sustainable Food Supply Chain
The Food and Agriculture Organization (FAO) of the United Nations defines a sustainable food value chain as “the full range of farms and firms and their successive coordinated value-adding activities that produce particular raw agricultural materials and transform them into particular food products that are sold to final consumers.”
According to the FAO’s definition, food products should also be “disposed of after use, in a manner that is profitable throughout, has broad-based benefits for society, and does not permanently deplete natural resources.”
Therefore, a supply chain is considered sustainable only if it is profitable on the financial level, culturally acceptable on the social level and has little or no negative impact on the environmental level. Four major links characterize the supply chain starting with production, aggregation, processing and ultimately wholesale and retail distribution.
Lebanon’s Deficient Safety Measures
In Lebanon, food safety throughout all links of the supply chain has been found to be deficient to varying degrees, studies show.
For instance, fruits and vegetables grown in Lebanon have been found to have excessive rates of pesticides, fertilizers and sewage irrigation, according to a study funded by the National Council for Scientific Research.
The study also revealed deficient hygiene measures in the harvesting and storage phase particularly due to the mishandling of food processing equipment. The unsafe agricultural practices and lack of hygiene in the storage phase leaves end users with fruits and vegetables that could be contaminated with salmonella, E. coli, listeria and staphylococcus.
When it comes to the distribution stage, inspection teams from the Health Ministry and Consumer Protection Department at the Ministry of Economy have exposed several wholesalers and numerous retailers for manipulating food labels and falsifying expiry dates.
Several fine dining restaurants have also been fined for violating food safety mainly in terms of hygiene measures and proper employee training.
While the adoption of best practices and safety measures by each company across the food chain is a challenge, an even bigger challenge is the synchronization and consistent implementation of rules through all points of the food chain.
Effective communication through the food chain is necessary to ensure that the reputation of one company is not harmed because of the malpractice of another company in the supply chain.
It is important to note that while not all companies have complete control over suppliers and sub-suppliers due to information gaps, they remain responsible for the quality of products they deliver to end consumers.
Avoiding Information Gaps
Compliance with the ISO 22000 International Standards is one way to ensure effective communication throughout the food chain in order to deliver safe food products to the final consumer.
The ISO 22000 specifies requirements that enable an organization to plan, implement, and operate a food safety management system aimed at providing products that are safe for the consumer. It allows organizations to effectively communicate food safety issues to their suppliers, customers and relevant parties in the food chain.
This ISO 22000 also integrates the principles of the Hazard Analysis and Critical Control Point (HACCP) system. The hazard analysis establishes an effective combination of control measures to identify and assess all hazards that may be reasonably expected to occur in the food chain, including hazards that may be associated with the type of processes and facilities used.
A study by the American University of Beirut shows that large sized industries are much more aware than SMEs when it comes to food safety management systems such as HACCP.
The study identified cost, the lack of prerequisite programs and poor infrastructure as the major barriers to the implementation of HACCP. The implementation of ISO 22000 standards and HACCP play an even more vital role in terms of food safety particularly In developing countries such as Lebanon where government regulations and law enforcement is traditionally weak.
A number of Lebanese organizations have recently increased their efforts to raise awareness about the importance of international standards in terms of food safety.
Among those organizations is the Lebanese Standards Institution (LIBNOR), a member of the International Standards Organization (ISO) that uses ISO 22000 standards to publish its own guidelines for Lebanese establishments.
LIBNOR recently inaugurated in cooperation with the Ministry of Industry a new food safety training center for business owners and workers in the food industry.
The training center will focus on the proper implementation of standards and provide training courses for the private sector to improve food safety. LIBNOR has also built a new website aimed at educating clients and the public on the basics of proper food safety standards.
Several organizations have followed in LIBNOR’s footsteps. Beirut and Mount Lebanon’s Chamber of Commerce, Industry and Agriculture started last December organizing classes on food safety in cooperation with the health, tourism and industry ministries, Lebanon’s Central Bank and the Lebanese Franchise Association.
The classes are offered free of charge by two food safety training companies Boecker and G.W.R Consulting and aim to improve worker training and awareness on food handling.
However, to ensure food safety, businesses need to extend their efforts beyond training employees toward improving working conditions. Working conditions can be improved through the adoption of Occupational Health and Safety Assessment Series (OHSAS) 18001.
OHSAS is an internationally recognized standard to establish management practices that ensure the health and safety of workers by minimizing workplace risks.
Workplace risks include for instance long and physically demanding working hours that result in employee fatigue and poses a safety threat when workers use sharp equipment.
While the Ministry of Labor oversees the implementation of labor standards that include provisions on worker health and safety, studies show that law enforcement is significantly weak.
However, firms have other incentives to improve employees’ working conditions.
In addition to ensuring food safety and being socially responsible in the workplace, improved working conditions result in enhanced operational efficiency, reduced accidents and production time loss, lower insurance premiums and a better brand reputation.
All those factors ultimately contribute to higher business profits.
Efficient Communication
Food companies risk public criticism in a large number of diverse areas. To neutralize the threats or exploit the opportunities due to public concerns requires a comprehensive approach to CSR by addressing environmental and social issues relevant for internal and external stakeholders and – just as important – by communicating them in an appropriate manner internally and externally.
To increase trustworthiness of CSR communication companies can involve third parties, for example backing up labels by a third party certified standard. In addition credibility of CSR communication is influenced by stakeholders’ perception of a company’s authenticity, commitment and motives with respect to its CSR endeavors. Though the vital role of communicating responsible behavior to stakeholders, as firms move from a passive, unresponsive CSR strategy to a responsive and further to a proactive one, CSR communication becomes more crucial.