Eggs, Ethics, and Supply-Chain Accountability
Canadian Business recently reported that two major companies — McDonald’s and Target — have dropped egg supplier, Sparboe Farms, after concerns arose regarding animal welfare at the company’s egg-production facilities. It’s a small PR hassle for titans like McDonald’s and Target. But it’s clearly a huge hit for a company like Sparboe.
This case raises two important points, ones that go far beyond the relationships between mega-chains and their suppliers:
The first has to do with supply-chain responsibility. Notice that McDonald’s, for its part, doesn’t deal directly with Sparboe: it gets Sparboe eggs via Cargill Inc., the agricultural giant that supplies all of McDonalds’ eggs. This raises an interesting question about supply-chain ethics. Any company is clearly responsible for, and should be accountable for, its own behaviour. And a company is pretty clearly also partly responsible for, and should be accountable for, the behaviour of its suppliers, at least to the extent that it knows, or should have known, about those suppliers’ behaviour. But what about the behaviour of their suppliers’ suppliers? The modern trend is toward nearly infinite responsibility, up and down the supply chain. That much is clear. But the moral principle behind such responsibility is less clear.
Sensible thinking about supply-chain accountability has to differentiate, I think, between retrospective culpability, on one hand, and responsibility to make changes going forward, on the other. Is McDonald’s responsible for brutal behaviour by employees of a supplier’s supplier? No. But do they have a responsibility to take action, now that they know about it? Yes.
The other point has to do with the blurry boundary between practices that are unethical, on one hand, and practices that are in some more vague way unacceptable to the public, on the other. Animal welfare issues are a great example of this. Philosophers continue to debate the moral significance of animals and their suffering. Some will tell you that all suffering, human or not, is of moral significance. Others will tell you that ethics is a human device for making social living more congenial and sustainable. On the latter point of view, animal suffering might be ugly, but it’s not unethical, except to the extent that we have an obligation not to tread upon other people’s sensibilities. But this distinction matters little, in many cases: a company’s suffering can result from either — either from behaviour that is actually unethical, or from behaviour that is simply seen as being so.
The Business Ethics Blog 
Chris, the longer version of your blog, in Canadian Business, ends with the position that once a company knows about wrongdoing, it must act. But it is not responsible for knowing everything about every link in its supply chains. I’d like to add a third issue. My company must not seek goods or services from suppliers whose attractive pricing probably results from practices that are unacceptable to me. Unacceptable wages and working conditions, for instance. Unacceptable environmental practices, for instance. Even though those ‘for instances’ are legal in their local jurisdictions. This is along the same lines as the issue of sending prisoners to another jurisdiction that extracts information by techniques that we are not allowed to use.
Robert:
I agree — or at least I think that companies ought to ask questions when suppliers’ prices are so low that they imply something fishy. It’s just like when an acquaintance offers to sell me a TV at a ridiculously low price. I should probably worry that it “fell off the back of a truck,” as the saying goes.
(FYI, the content of the two versions of the blog entry is the same — the 2 key points are just ordered differently.)
Chris.