India – country of contrasts and opportunities

India is a country of contrasts: Extreme wealth rubbing shoulders with extreme poverty. A country with respected universities and poor or no schooling for many children. The country also has a burgeoning middle class. As the second largest democracy in the world, India is a land of many challenges and fantastic opportunities.
In January 2010, the Council on Ethics made a field trip to India to gain an insight into the risks and opportunities that companies operating in India face in terms of both the environment and human rights. We wanted to increase our knowledge of child labour, environmental work and the way Swedish and Indian companies work with their suppliers on issues such as working conditions and the environment. We met Indian, Swedish and international companies, as well as stakeholder organisations.

Different ways of improving conditions for children

We discussed child labour and conditions for children with UNICEF. They explained how complex the problem is in practice. There is widespread social acceptance of putting children to work in India, and it will take a great deal of effort to change attitudes. Around 80 percent of all child labour in India occurs in agriculture. Going to school must be seen as a better alternative than work by both parents and children, which is not always the case at the moment. There may not even be a school in the village, or the teacher fails to turn up. The teacher not turning up is a common problem because he/she sometimes has a long distance to travel and little motivation to work in a village school in a rural area. If there is a school, it usually comprises a class of 100 pupils of various ages, and there is a widespread shortage of school books.

In order to improve education, UNICEF has drawn up teaching material designed to work for small self-study groups. UNICEF is also working to improve the health of women and children. In order to disseminate facts about HIV/Aids, the UN body has turned to the power of the soap opera, as well as passing on information at service stations in order to reach lorry drivers, who are an important target group.

They emphasise the importance of companies leading the way in showing that it is possible to combine good working conditions and environmental awareness with business success.

UNICEF is also working with companies to improve the situation of children. They emphasise the importance of companies leading the way in showing that it is possible to combine good working conditions and environmental awareness with business success. IKEA and H&M are two of the Swedish companies supporting UNICEF’s projects in India.

The mining industry often causes conflict

In our conversations with two Indian environmental organisations (the Centre for Science and Environment and Navdanya), we discussed Indian industry in general and the mining and agricultural industries in particular. Many states have considerable natural resources and extraction of these often creates conflict between mining companies and the local population. It is important for mines to be established in agreement with the local communities and in an environmentally responsible way. The Council on Ethics also met a mining company to discuss these issues.

Genetically modified seeds in agriculture

Around 70 percent of the population of India live in rural areas and they are often dependent on the land and/or forests for their livelihood. There is currently an ongoing debate in India about whether the need of the country for food will best be met via organic agriculture using traditional seeds or agriculture using hybrid and genetically modified seeds. We met environmental organisation Navdanya, which is a strong advocate of organic agriculture, and also one of the companies that produces and sells genetically modified seeds. As is so often the case in discussions about the environment and development, companies and stakeholder organisations have opposing views. Greater openness and transparency is important in reducing the information gap between companies, investors and other stakeholders, which was something we commented on during our meetings.

Environmental and social demands made of suppliers

India is a key market for many Swedish multinational companies. Many have long had production and sales operations in India, since India had high import tariffs up until the mid-1990s. The Swedish manufacturing companies that we visited continue to sell primarily to the Indian market. For other industries, such as the textile industry, India is an important country of purchase.

One area that we focused on was how companies work with their suppliers on working conditions, safety at work, human rights and the environment. We saw many examples of demands made by Swedish companies in these areas leading to positive change. These may be simple but important changes such as workers having access to clean drinking water, clean toilets and subsidised nutritious food. It may also be a case of Indian labour law being followed with regard to pay and overtime, and the use of personal protective equipment.

One of the suppliers proudly showed off three audits by its Swedish customer showing clear improvements. This work has also helped the supplier to attract new customers. Many suppliers stated that, thanks to their customers, they have now started making social and environmental demands of their own suppliers.
We are aware that we have visited “good” suppliers and that there are of course factories where conditions and the working environment are much worse. However, it is inspiring to see that change is possible and that it leads to good business along many links in the value chain.