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The WEC Supply Chain Management Partnership John Mizroch President & CEO World Environment Center World Environment Center Mission The World Environment Center advances sustainable development by encouraging environmental leadership, helping improve environmental, health and safety practices worldwide, and fostering the efficient use of natural resources to protect the global environment. WEC was founded in 1974 as an independent, non-profit, nonadvocacy organization with a grant from the United Nations Environment Programme (UNEP). WEC Board of Directors Mr. James C. Lime Chairman Pfizer, Inc. Mr. Walt Rosenberg Hewlett-Packard Mr. J. David Runnalls IISD Ing. Armando Garcia Segovia Cemex, S.A. Mr. Karl F. Schmidt Johnson & Johnson Dr. Dieter Hubl Schering AG Mr. Samuel L. Smolik Shell Chemical Prof. Nicholas Robinson Secretary & Treasurer Pace Univ. School of Law Ms. Elizabeth A. Lowery General Motors Corp. Mr. Barry Worthington USEA Mr. Wayne S. Balta IBM Corporation Mr. Stephen W. Raab InterGen Energy, Inc. Mr. Daniel Gagnier Alcan Aluminum Ltd. Mr. Achim Steiner IUCN Fis. Sergio Reyes-Lujan Instituto Mexicano del Petroleo Dr. Bernard Tramier Vice Chairman TotalFinaElf World Environment Center Programs Three core programs through which the Center supports its Mission: International Environment Forum (IEF) WEC Gold Medal Award (GMA) Capacity Building for the Environment (CBE) Capacity Building for the Environment Programs Criteria for Selection: High Visibility High Impact Beneficial to Our Members Promote Sustainable Development Importance of SMEs In Mexico, micro, small, and mediumsized enterprises • comprise approximately 99% of the private sector • generate 80% of employment and • produce 50% of GDP. Importance of SMEs – 2 • In Brazil, SMEs cover 79% of nonagricultural employment. • In Vietnam, SMEs make up 96% of total enterprises and contribute 26% of the GDP. Importance of SMEs – 3 • SMEs typically account for 50% or more of GDP in developed market economies and and the more advanced transition countries. CP and Sustainable Development History and Background The 1992 Rio Summit provided impetus for the use of Cleaner Production as a strategy for implementing sustainable development objectives. In the 1990s, public institutions, including USAID, UNIDO, and the Swiss Government, spent hundred of millions of dollars to establish Cleaner Production Centers (CPCs) in developing countries. These CPCs represent existing, albeit underutilized, resources that can assist with project implementation. The Rise of Corporate Global Power KEY FINDINGS: Of the 100 largest economies in the world, 51 are corporations; (based on a comparison of corporate sales and country GDPs). The Top 200 corporations’ combined sales are bigger than the combined economies of all countries minus the biggest 10. The Top 200s’ combined sales are 18 times the size of the combined annual income of the 1.2 billion people (24 percent of the total world population) living in “severe” poverty. General Motors - the world’s biggest corporation is ranked 23rd and is bigger than the economies of Denmark, Norway, Poland or Saudi Arabia. Source: Institute for Policy Studies, December 2000 WEC Participating Companies Abbot Laboratories Aventis SA Alcan Alcoa Amerada Hess AstraZeneca AT&T Beiersdorf AG Black & Decker Boehringer Ingelheim Bristol-Myers Squibb Cargill Cemex ChevronTexaco Citigroup Dow Chemical Eastman Kodak F. Hoffmann-La Roche General Motors GlaxoSmithKline Hewlett-Packard IBM Inco Ltd. InterGen Energy Inc. Johnson & Johnson Johnson Controls Limited Brands Merck Merrill Lynch Motorola Novartis Occidental Otto Pemex Pfizer Inc. Phillips Electronics N.V. Ricoh Corporation Schering AG Schlumberger Ltd. S.C. Johnson & Co. Syngenta International Total The Old Model Demonstration Projects: more than 1000 demonstration projects across a wide variety of industrial sectors have been undertaken. Roundtables and Partnerships: Cleaner Production roundtables have been established worldwide to facilitate discussion and the exchange of information and know-how among professionals; numerous innovative partnerships have also been established. Training Programs: Cleaner Production courses, training programs (including train-the-trainer programs), and higher education programs have proliferated around the globe. The Old Model – 2 Journals and Websites: numerous journals and websites dedicated to Cleaner Production concepts and information exchange have been established. Cleaner Production Centers: Perhaps the most notable efforts to promote Cleaner Production in developing and transitional economies have been those of Cleaner Production and pollution prevention centers established by a number of large-scale publicly-funded programs. The Old Model – 3 Cleaner Production Centers designed to offer the following basic services: • awareness raising • training • technical assistance • advice on financing • information dissemination • policy advice Old vs. New Model Financial Burden Old Model USAID – Larger Burden Private Sector – Small Burden SMEs – Little or No Burden New Model USAID – Small Burden Private Sector – Moderate Burden SMEs – Larger Burden Global Potential for Leveraging the Partnership It is estimated that the 100 largest multinational corporations in Mexico, together with their first, second, and third tier suppliers account for more than 70% of all industrial production for export. 13 countries in the developing world account for 90% of all developing country exports. Est. Size of Some Supplier Bases • Hewlett-Packard: 52,000 • Motorola: 36,000 • Ford, GM, DaimlerChrysler, Renault, Nissan, and Peugeot-Citroen: 150,000 (~25,000 each) WEC Supply Chain Management Partnership What Is the Initiative? To promote the adoption of Environmental Management Systems and Cleaner Production techniques among Small and Medium Sized Enterprises (SMEs) that supply major multinationals in developing countries The Partnership United States Agency for International Development World Environment Center Multinational Corporations Governments and International Organizations Technical and Academic Institutes Suppliers Roles & Responsibilities WEC/PA Serve as catalyst Develop relationships Provide technical assistance and training Provide support and follow-up Roles & Responsibilities – 2 WEC/PA (continued) Provide case studies and tools Corporations are not monolithic entities; they have stove-piped divisions that often lack effective communication – WEC/PA keep corporate partners focused and communications flowing Roles & Responsibilities – 3 USAID, Other Government Agencies and International Organizations Provide seed funding Serve as a catalysts Develop policies and approaches that support and promote these private sector initiatives Roles & Responsibilities – 4 Multinationals Develop policies for suppliers Identify suppliers for participation Appoint local managers Provide oversight and management Provide technical assistance Roles & Responsibilities – 5 Suppliers Select, plan, and execute projects Fund projects Report periodically to client (multinational) Roles & Responsibilities – 6 Local Technical Partners Provide training Provide technical support Pilot Partnership Programs Underway Mexico Johnson & Johnson Alcoa Brazil Dow Chemical Johnson & Johnson China General Motors Pfizer, Intel and others have expressed interest Next Steps Encourage multinationals to adopt model for all suppliers in country Encourage multinationals to migrate program throughout company (worldwide) Next Steps – 2 Encourage participating multinationals to assume a global leadership role Develop in-country partnerships involving industry associations, leadership companies, government agencies and international organizations in order to promote widespread dissemination of the model