Arla Foods to ensure responsible approach to African markets

Arla plans to grow in several African markets in the coming years, but this growth must be achieved in a responsible way that does not bring unintentional consequences for the local farming industry and its related communities. Therefore, Arla is implementing an updated human rights policy throughout its organisation to ensure that Arla’s global business does not leave a negative footprint in developing countries.

Arla intends to increase its current business in sub-Saharan Africa from the annual revenue of approx. 650 million DKK to approx. 2 billion DKK in 2017. This is to be achieved through sales of powdered milk and UHT milk, which is in high demand among the rapidly growing middle class in and around the big cities.

Today Arla sells products in Nigeria and the Ivory Coast, but Arla’s strategic focus is also directed at markets like Ghana, Senegal, Congo as well as other markets in East Africa.

It is the clear ambition of Arla that its activities and growth plans in Africa or other parts of the world do not bring negative consequences for the local farming sector. Therefore, Arla has introduced a list of initiatives to ensure the following:

• Arla will update its human right policy in its code of conduct in order to comply with the UNGPs and the OECD guidelines by 15 July 2015,
• Arla will introduce due diligence procedures complying with the UNGPs and the OECD guidelines by 31 October 2015 ensuring that Arla is well placed to manage the human rights impacts of its global business activities in accordance with international human rights guidelines.
• Arla’s human rights due diligence procedures shall identify and prevent as far as possible actual and potential adverse human rights effects caused by Arla’s business activities or to which the company may contribute, in particular in relation to our ongoing or planned activities in developing countries.
• Arla will pilot test its due diligence procedures by conducting and publicizing human rights impact assessments related to its business activities in Ivory Coast and Nigeria. The results of the assessments will be made public by 1 April 2015 and 1 May 2015, respectively.

“More and more African consumers demand types of dairy products that cannot always be produced locally in adequate volumes. We offer good nutrition through our powdered milk products, and simultaneously we want to ensure that our business does not have any negative effects on local farmers,” says executive vice president Finn Hansen, who is head of Arla’s international business group.

For the past months Arla has had a constructive dialogue with the NGO, Action Aid, which has confirmed the need to launch these initiatives.

“Arla is taking these active steps because it is important to us as a cooperative farmer-owned dairy company to be able to document to ourselves, our customers and consumers that we are doing things properly, even in this area as well. We have received advice from different NGO’s, including Action Aid, who have helped us focus on these things,” says Finn Hansen.

Action Aid welcomes Arla’s initiatives, and has high expectations for Arla’s work to implement an active human rights policy and publically report on the company’s human rights risks.

“A more responsible and sustainable food production is the key to fighting poverty and creating global development for the benefit of all. Therefore, it’s a very positive move that Arla is now engaging itself in a more systematic way to understand and hinder potential unintended negative effects of the company’s business for local farmers,” says Secretary General in ActionAid Denmark, Frans Mikael Jansen. He adds:

“Arla has done well to acknowledge that the time is right to support the company’s good intentions with hard data and know-how when it comes to driving a globally responsible commercial business. Arla is about to lead the way in its industry when it comes to responsibility. We believe both the company and the less advantaged of this world will benefit from this. Action Aid looks forward to following how Arla will implement this new approach and will offer any advice and guidance required.”

In addition to these initiatives, Arla is also working with other NGO’s to develop the local dairy sector in African countries.

Click here to read more about Arla’s position on social responsibility in developing countries and the company’s plans to implement a stronger human rights policy.