New Tool for Responsibility in Agricultural Supply Chains

In March 2016, the OECD-FAO Guidance for Responsible Agricultural Supply Chains (the RASC) was launched at the OECD in Paris. Developed through a multi-stakeholder advisory group and public consultation process, the RASC Guidance provides a useful framework for putting into practice the numerous voluntary norms and standards that have been developed in the past decade for the agriculture sector and businesses generally.

The RASC applies to activities throughout the entire agricultural supply chain. It relates to all types of enterprises and encompasses both upstream and downstream segments. 

When combined with such instruments as the Principles on Responsible Agricultural Investment (CFS-RAI), the OECD Guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights, and the Voluntary Guidelines on the Responsible Governance of Land, Fisheries and Forestry (VGGT), they give agribusinesses and agricultural investors a comprehensive framework for approaching responsible business conduct.

The core of the RASC Guidance is an enterprise risk management framework and model code of conduct.

Businesses should find that the basic framework is consistent with their existing risk management and compliance systems. It proposes a five step framework including (1) establish strong ERM systems, (2) identify, assess, and prioritize risks in the supply chain, (3) design and implement a strategy to respond to identified risks, (4) verify supply chain due diligence, and (5) report on supply chain due diligence.

Nothing revolutionary in that approach. That’s probably a good thing, as it should facilitate its interoperability with other management systems currently in use.

Beyond this basic process model, the RASC also contains an annex highlighting risks specific to agriculture and offering ways of mitigating them.

Examples include guidance on traceability in the supply chain, working conditions for farm laborers, safeguarding land tenure, and supporting animal welfare. 

A separate annex provides guidance on approaches to ensuring the free, prior, and informed consent (FPIC) of indigenous peoples in relation to investment or activities affecting their lands, territories, or other resources. Included is a helpful summary of existing normative guidance on FPIC and related resources.

While the RASC provides insights into particular issues in the sector, the variability of businesses to which it applies means that it is pitched at some level of generality. Take the question of verification. The RASC states that

“the verification process may include audits, on-site investigations, and consultations with government authorities, civil society, members of the affected community, and workers’ organisations at local, national and international level.” 

Unlike more prescriptive systems for responsible business conduct, this phrasing leaves firms to decide for themselves what steps are required.

In the absence of clear norms and standards this lack of specificity might be a shortcoming. Yet with the emergence of a host of authoritative instruments in the agricultural sector, it has the virtue of defining a clear process and model, while allowing a degree of flexibility needed to put those norms into practice.

Although I believe the RASC to represent progress in defining responsible agricultural standards, it is still early days. While I would not be surprised to see further iterations of the RASC over time, it seems likely to have immediate utility for firms implementing responsible agricultural practices.