How sustainable are the links in your supply chain?

There is always a lot more than what meets the eye in determining whether a particular product or practice is truly sustainable. Most products depend upon a varied and often dispersed network of suppliers to provide critical inputs. If any of the links in the supply chain employ unsustainable practices can the final product be deemed sustainable? (GW)

Sustainable development of tea industry in China

by Brian Ho
Corporate Social Responsibility in Asia
February 3, 2010

Tea originated in China, and today the country is the world’s biggest producer and has the most tea farmers (around 80 million). Despite this, few consumers (either in the Chinese domestic market or internationally) have clear picture about the tea supply chain (which involves processing, matching, packing, transporting, and selling), and thus have no idea how tea consumption affects the livelihood of tea farmers. This is in stark contrast with the coffee industry, where the supply chain has been the subject of keen interest for many years.

Generally speaking an ordinary tea farming household in China occupies around 2-3 hectares, but generates an income of only around 50 per cent of an average farming household. The livelihood of tea farmers is thus one of the critical issues concerning sustainability of the tea industry in China.

Another issue is supply chain management. The sustainable development of supply chains in China has been a hot topic for around 15 years. However, the focus has been on manufacturing, especially in labour intensive sectors. This is starting to change, with attention broadening to other sustainability issues such as food safety and traceability of products, and with it the social responsibility of companies in the primary sector. In the past few years, international buyers and sourcing agents have been starting to conduct social and environmental audits during the production process in tea processing companies. Unfortunately, the general view is that the labour conditions and environmental issues raised during these audits are of insignificant concern for Chinese management.

It is in this context, then, that the “First Seminar on Sustainable Tea in China” was and held on 23 January. The event was hosted and organised by the China Tea Marketing Association, Solidaridad China (an initiator and driving force behind Fair Trade, and an active player in organic agriculture), and UTZ Certified (one of the largest coffee certification programs in the world). The major aims were to explore opportunities to promote the sustainable development of the tea industry in China, which the organizers believe can result in a fair and balanced development model addressing both social and ecological concerns.

More than 60 representatives locally and internationally joined the seminar, including representatives from local government departments such as the Ministry of Commerce and the Ministry of Agriculture. Of particular interest was the inclusion of local producers; for instance, the Wu Yu Tai Tea Company (a well known Chinese brand) was invited to present about its experience in managing the supply chain. There was also an interesting research report by a professor from the Yunnan Agricultural University on the livelihood of farmers’ in southwest China.

Speakers from the international community working on sustainable tea also shared their experiences and knowledge. Solidaridad, which has supported sustainable products over a long period of time, explained how it had developed a global sustainable tea program. Organisations overseeing international standards and certifications on sustainable products (such as UTZ and the Ethical Tea Partnership) explained how their standards and certifications work and provided helpful information to companies that attended.

One of the outcomes of the seminar was that the China Tea Marketing Association will set up a specialised working group with members from the local and international tea community to examine and design a working plan and measures to promote the sustainable development of the tea industry in China.

One of the participants at the seminar was from an NGO called Inno Community Development Organisation, which has its headquarters in Guangzhou and branches in Shanghai and Beijing. Inno is the originator and developer of the first online purchasing platform for fair-trade products in China (www.fairtradecn.org), and the organisation believes that there is great market potential for sustainable tea in China. Inno also provides companies with fair-trade products through procurement of office refreshment such as coffee and tea.

Along with Inno, CSR Asia is expecting more and more Chinese customers will be interested in such sustainable products.