Examination of Witnesses (Questions 320
- 339)
TUESDAY 9 MAY 2006
MS SUE
CLARK AND
MR WALTER
GIBSON
Q320 John Battle: You do the bottling
for Coca-Cola?
Ms Clark: In some countries.
Q321 John Battle: What is your relationship
with them if you are part of the Coca-Cola supply chain because
sometimes they have been criticised for not carrying out a proper
ethical audit or being socially responsible and environmentally
responsible. Do you have a dialogue with Coca-Cola that fits your
environmental and ethical policies, or do theirs tell you what
to do?
Ms Clark: It is quite interesting.
We do obviously have a dialogue with Coca-Cola but Coca-Cola has
a range of bottlers and we are actually one of the big bottlers.
Very often they deal with very small local family-owned bottlers
and in these instances maybe there are issues on the ground. The
fact that we are a big multinational with our own principles,
when it comes to operating on the ground it is our values and
our principles that really hold sway.
Q322 Chairman: Just finishing off
on that, you have said Uganda and Zambia, are you spreading elsewhere
and what are your competitors doing? I understand that you had
about 99% of the market in South Africa so you had to go elsewhere
to expand your market, but what is the potential for following
this practice in other countries? Why not Mozambique or Malawi
or Nigeria or whatever?
Ms Clark: The issue is that every
market has a different solution and one of the key things to our
success is actually looking at things on a very local market basis.
There is not a one size fits all so we are looking at the development
of cassava as a substitute for sugar which will have application
in some of our markets, the use of maize has applications in Ghana.
It is difficult to give a one size fits all solution, but as I
have shown we are very much looking at each individual market
and saying what can we do here? I do not know if that answers
your question.
Chairman: That is helpful. John Barrett.
Q323 John Barrett: If I could turn
to Mr Gibson and ask some questions about the Global Partnership
for Handwashing with Soap, it never fails to strike me that when
we visit a number of developing countries and we go to visit hospitals
and ask what are the big killers, you might think it is going
to be HIV, malaria, TB, but people say it is diarrhoea that is
killing the kids and access to clean drinking water and basic
hygiene could make a massive difference. Unilever are part of
that Global Partnership for Handwashing with Soap and reading
the papers it says people do hand wash in some areas but on five
to 15% of occasions when it should be practised. Do you know what
the percentage is in this country?
Mr Gibson: It will be higher than
that but it will not be 100%, it is probably a lot lower than
you might think. In fact, my colleague, Dr Val Curtis of the London
School of Hygiene and Tropical Medicine has done some tests on
this amongst students and it comes out around 40 to 50%, even
among people who are studying hygiene.
Q324 John Barrett: It is a very interesting
partnership and I wondered if you could say a bit about how the
partnership actually works.
Mr Gibson: It is a wonderful thing
because there is actually a shared vision at the heart of it,
a shared objective, which brings the public sector and the private
sector together, and that is about reducing diarrhoea through
promoting handwashing with soap because, as you rightly pointed
out, diarrhoea is a major killer and there is lots of good scientific
evidence to say that the simple act of washing your hands with
soap at the right time, which is mainly after defecation or before
preparing food, would lower that incidence by about 50%, so the
task we have to do is to find the right way of promoting that
use of soap, scaling it up and reaching all the vulnerable people;
that is mainly small children and mothers who look after children.
The private sector interest is the increased use of soap will
expand the market; the public sector interest is promoting health,
reducing the burden of disease and thereby having an impact on
poverty because the diarrhoea in itself may lead to lower attendance
at school, particularly among girls, it leads to poor education,
it leads to lost time at work so there are lots of indirect consequences
apart from the health consequences, and so as a public health
agenda in terms of poverty it is really significant. There is
a coincidence of the public and private sector interest which
is around promoting the change in behaviour that is crucial and
that we are both interested in. It is finding the right interventions,
getting the evidence for them and driving that to scale. There
is recognition that neither the public nor the private sector
can do that on its own. We have our own initiatives as a business
to promote handwashing tied to some of our brands like Lifebuoy,
and we have been quite successful, we have reached 70 million
people in India with that campaign, but that is a drop in the
ocean compared to the size of the problem so we need the public
sector to assess, reach and have the impact of scale that we are
looking for. What we bring is the kind of skills that we have
as a business and one of the things that we have learned through
the Public Private Partnership (PPP) is that it is quite surprising
in a way learning about partnerships and what each partner brings.
There may be some surprises in terms of what your initial expectations
were, so one of the things that the private sector has found that
it can contribute really successfully to a partnership like this
is an understanding of marketing because behaviour change is in
our DNA and we understand how you go about an efficient marketing
campaign to get your message across, to design the campaign, to
understand consumer needs and the triggers of behaviour that you
are trying to press, how best to communicate those in an effective
way, how to run a mass media campaign.
Q325 John Barrett: Has the public
sector taken this on board or have they watched you doing it?
Mr Gibson: They have definitely
taken it on board. In fact, the PPP in handwashing has developed
a model of which this is a critical component, so every time you
go into a country there will be some kind of consumer or co-operative
research to try and understand the need and make sure that the
campaign is tailored to meet that need.
Q326 John Barrett: Have there been
any examples of where there has been a conflict? It seems like
the kind of example where everybody would be pulling in the same
direction, but have there been differences that have had to be
compromised and differences reconciled?
Mr Gibson: Between the public
and the private sector?
John Barrett: Yes.
Mr Gibson: There have been some
quite vigorous debates. I have actually just been to a meeting
in Washington of the steering committee for the PPP in handwashing
and the level of discussion now is really, really good and the
level of understanding of what each partner can bring to the party
as it were is now very good. We are at the point now where we
understand each other well enough to be able to do something really
quite big and significant.
Q327 Joan Ruddock: Do you actually
produce and make soap in the countries rather than import the
soap into the countries?
Mr Gibson: I would hesitate to
answer that for every country but we do produce locally in many
countries, that is true, I do not know if it is true in every
country.
Q328 Chairman: Is that true of the
packaging materials as well?
Mr Gibson: In many cases, yes,
the packaging would be produced locally, but it depends on the
type of packaging. I can give you a more detailed answer if you
would like.
Q329 Joan Ruddock: It appears to
me to be a very important principle; it was when you mentioned
Lifebuoy I could just see huge boxes of Lifebuoy soap being imported
into countries, whereas clearly it would help the business climate
enormously if you actually set up a means of making soap and distributing
it and everything else.
Mr Gibson: In a lot of our major
countries like India and Indonesia we would manufacture at probably
more than one site in the country, simply because of the distribution
costs.
Q330 John Bercow: I suppose as far
as children are concerned, Mr Gibson, there are two avenues for
encouraging good practice; one is through the home and the other
is at school for those children fortunate enough to attend.
Mr Gibson: Yes.
Q331 John Bercow: Is there a simple
plan in mind to try to disseminate good practice and the means
of delivering it amongst schoolchildren? You have a mass audience
there and a teacher who is presumably regarded as a role model.
It should not—to go back to my line of enquiry with the
previous witnesses—be something that requires the most enormous
sagacity to address, should it?
Mr Gibson: There are several elements
to arriving at the simple plan. I do not think we have the simple
plan but I would love to have the simple plan. There are several
elements: first of all you need an intervention that works and
is going to work in most places, so you need to have some kind
of universal message that children will relate to and react to
first of all, and that is something that we are working on with
academic colleagues who are leading that field, there is that
chunk of it. Then there is the question of how you communicate
that, how do you actually get your message to the children? Is
it best done through teachers or is it best done directly, and
we have not quite got the best model there. The other factor that
we need to bear in mind is that to do this in all the countries
where it is necessary you are going to have to work through a
lot of ministries of education, so it is not something that a
private sector company can do on its own, and that is another
benefit of these public private sector partnerships, opening doors
to these channels to get an agreed package of communication to
where it is needed. There are lots of good experiments going on,
I would say, but no firm consensus on how best to do it or a plan
of how to get to every school in the world. There are lots of
good things going on in many countries.
Q332 John Bercow: Can I very briefly
follow up because agreement on a model would help.
Mr Gibson: Yes.
Q333 John Bercow: But it is quite
important to concede the point that just because one cannot do
everything does not mean they should do nothing, and it may take
a long time to spread the practice as widely as it needs to be
spread, but at least making a start (a) achieves something and
(b) offers the prospect, does it not, of imitation—if people
see that something good is being done they might try to imitate
it elsewhere. This is in no sense a personal criticism of either
of our witnesses, it is just a frustration that has been burning
inside me for some time which I would like to put to you. Joan
has gone out of the room but I know that when we were on one of
our recent visits we both felt that something quite simple that
could have been done for a child was not, and when we raised it
with genuinely caring—presumably—representatives of
an NGO they looked at us rather blankly and said "Well, we
haven't been asked". The example I have in mind admittedly
does not relate to handwashing, but it is an example of a health
point. There was a queue of kids waiting at a feeding centre and
there was a young man, probably no more than 14, severely scarred
around the mouth with very, very badly chapped and bloodied lips,
who was an albino. That young man—Joan alerted me to him—was
standing in a queue and, okay, it was not normal practice there
to be wearing sunhats, but that kid was suffering, not just because
he was bloody hungry but because his head was going to be damaged
further, his health was going to suffer. We said to the NGO it
is scorching hot sun, the boy is an albino, does he not need a
hat and there was a prosaic, utterly unmoved response, "Well,
I suppose he might"—almost like what time of day is
it, "it is 12:20". If I had had a spare one I would
have given it to him, but I asked was there not a policy when
you see such small-scale problems to address them, to which the
reply was "Oh well, we've never been asked". If ever
there was an example, if you will forgive me saying so, of someone
working in a large organisation who no doubt had all sorts of
big plans and policies and resources at her disposal, who had
failed in a very human sense on a human scale to do something
about a small problem that was immediate, that was it. I was completely
shocked by it; can you offer me any sort of comfort that this
was an isolated case, or is it very commonplace, because I do
not regard it as a laughing matter?
Mr Gibson: Let us stick with handwashing,
shall we? What is Unilever doing? We are running a campaign which
we call Swasthya Chetna, which is currently mainly in India but
we are moving that into Africa, which is a way of quite cost-effectively
getting the message of handwashing primarily to schoolchildren,
so it started in India, it has gone into many thousands of villages
in India and it uses the children to propagate the message. As
far as we can tell it has been quite successful and we have reached,
we think, 70 million people using that approach. That is the limit
of what we can do with our resources. We have learned quite a
lot about how to talk to children in that process, what works
and what does not work, and we want to get to every child in the
world who needs this message in the same way that I think you
do. My submission is that to get to your simple plan there are
some stages you have to go through. We will keep doing Swasthya
Chetna, we will keep doing what we can, we will keep working with
the public private partnership and they will talk to the children
as well because part of that involves schoolwork, but to get to
the bigger plan of how you reach every child with a really compelling
message that you think will change behaviour, you need to bring
together all the actors, you need to have real evidence that the
behaviour change mechanism that we are going to use is effective
and is scaleable and that is the kind of thing we are trying to
achieve. That is the way I would like to get to the simple plan,
it is to get all the actors but it is not something that we can
do on our own.
John Bercow: I understand.
Mr Gibson: The PPP handwash is
a great start because it brings together a number of different
actors—the World Bank, Unicef, soap companies and USAID.
amongst others, and then at a country level the governments who
control access to schools, for example. It is quite a big challenge
getting to a simple plan, but I do agree that it is actually what
we are all striving for.
Ms Clark: Could I offer a slightly
different take on that question? When it comes to big businesses,
what you were talking about, the very local responses, it is all
about culture to be honest and as a big global business what we
can do is really try and develop that culture and those values
in local people, because you cannot mandate from the centre that
somebody has got to provide a hat or help an orphanage, what you
have got to try and do is develop that culture and visibly reward
that culture on the ground. An interesting example that comes
to mind based on your example is in Zambia where a local team
of finance people had got together, started to sponsor an HIV/AIDS
orphanage, found a little boy who was very badly burned from head
to toe, liaised with the team in South Africa, they managed to
get a specialist doctor to take the boy on, they raised the money
to get him there, it is very much a cultural issue about what
happens on the ground and the role of big business is really to
try and instil that culture and reward that culture.
Q334 Ann McKechin: Mr Gibson, you
have obviously carried out some very interesting research with
Oxfam which was reported on last year, and in the conclusions
you stated that the company could improve its interactions with
people living in poverty. I just wonder if you could perhaps give
us some indication of what you thought those changes could be
or key findings were for the company, and whether or not you have
carried it forward in your current business models.
Mr Gibson: To take the latter
part of your question first, we have a major kind of initiative
within the company at the moment to really understand how best
we can meet the needs of the bottom of the pyramid, so that is
being handled at the highest level in the company. The executive
committee is going to ask to bring together a group of very senior
people to work out a real strategy for doing that. I think one
of the things that we recognise and can share with you now is
that as I said earlier we need to get a much better handle on
the needs of people on really low incomes and not make assumptions
based on understanding from other situations in richer markets,
because it is not just about affordability, it is about the appropriateness
of your product, can you get it to the person, can it be kept
stable, do they have to travel a long way to get it, all those
sorts of things need to be taken into account. We are looking
very hard at that and we will probably do what we have always
done, I think, which is to try things. We will probably try some
practical experiments, we will probably choose some areas where
we think there is a particular need and we will try things, just
like we tried smaller unit doses to help people buy aspirational
products; we will try things in markets and see what works. That
is probably how we will get into it. We are quite keen to follow
up the research that we did with Oxfam, really to understand more
about the people at the extreme ends of the value chain and what
would make a difference to them. That is one of the things that
struck me on reading that report, that there were a number of
ways that you could improve.
Q335 Ann McKechin: One of the ways
that was suggested was the issue about contract workers who had
very different terms and conditions. Your own employees were obviously
enjoying excellent terms and conditions, but one of the contract
workers said "If I become pregnant or ill I lose my job."
That is surely one of the issues, the relationship between one
area of the chain to the next.
Mr Gibson: We try to keep a very
close eye on that and try and raise standards when we can. The
Government clearly has a role to play there—
Q336 Ann McKechin: In terms of the
labour laws, yes.
Mr Gibson: In terms of the legal
framework for employees, and they have tried very hard to impose
better standards on contract companies. It is more a question
of compliance than actually changing the law.
Q337 Chairman: In the report on this
survey in Indonesia it says that "For supply and distribution
chains to benefit poor people even more, there need to be other
social institutions and resources in place such as credit and
saving schemes, marketing associations, and insurance schemes
as well as diversification of income streams . . . [7]"
Is that something again that development agencies and the like
can assist with? Is that the kind of crossover point where the
partnership can work?
Mr Gibson: Yes, that was the kind
of thing I was alluding to earlier when I said that maybe there
is an opportunity for development agencies to get alongside some
of the enterprises that the private sector are starting, so they
clearly are trying to encourage enterprise on a small scale but
big companies also take initiatives—for example, the Kecap
Bango initiative that is mentioned in the report is another form
of enterprise and a different way of trading that benefits the
farmer. There might be opportunities for development agencies
to get alongside those and really, in a way, amplify the benefit
to those people through offering them other things that the private
sector cannot offer. There is perhaps more that can be done through
dialogue.
Q338 Chairman: Another one where
you have an interesting summary of Unilever's contribution is
Development Africa. Obviously it is your own take, but you talked
about trading between Nigeria and Ghana and the difficulty of
getting transport routes; you have said that it has taken time
to get transport routes established and it can still be a struggle.
Is this to do with roadblocks and physical things like that, or
is it the quality of the roads?
Mr Gibson: I am not a real expert
here, I have to confess, but I think it is about just a shortage
of good roads quite honestly, just very poor physical infrastructure
that makes transport very difficult.
Q339 Richard Burden: Could I ask
you two questions about the Investment Climate Facility which
you are one of the founding sponsors of. First of all from Unilever's
point of view what do you think the business case is for getting
involved in initiatives of that sort, but also specifically on
the Investment Climate Facility what added value do you think
that specifically brings over and above other initiatives of the
World Bank and so on?
Mr Gibson: The business case is
quite straightforward in the sense that we want to grow our business
in Africa. There are a number of obstacles to that that are not
entirely within our control and we can see the benefits of being
in a partnership like that where the objective is to encourage
investment in Africa and remove some of those barriers. It seems
like quite a powerful vehicle to help address some of the concerns,
so it will help us to hopefully be more successful in terms of
perhaps overcoming some of the barriers—the physical barriers,
the regulatory barriers, the trading barriers—which as an
organisation we cannot deal with on our own, but it is again coming
back to the benefits of partnerships where you have people who
have an influence in other sectors. I think that would help us
so, yes, it is an investment to help us grow our business in Africa.
How does it add value over other initiatives? It complements some
of the other initiatives because it is not directly seeking to
stimulate the enterprise itself, it is more just trying to create
a favourable climate in which enterprise can flourish and, as
far as I know, there are not too many other organisations that
are doing that.
7 Exploring the Links Between International Business
and Poverty Reduction: A Case Study of Unilever in Indonesia,
An Oxfam GB, Novib, Unilever, and Unilever Indonesia joint research
project, 2005, page 86, http://www.oxfam.org.uk/what-we-do/issues/livelihoods/downloads/unilever.pdf Back
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