Unilever Indonesia: links between international business and poverty reduction

Oxfam, Unilever and Unilever Indonesia (UI) have collaborated on a research project to increase their understanding of the impacts of business on the lives of poor people and to explore the potential links between international business and poverty reduction.

The report explores how, and to what extent, the operations of Unilever Indonesia have an impact on poverty – both positive and negative – in Indonesia. It looks at the impact of UI’s entire value chain, from its interactions with small-scale producers in the supply chain to those with low-income consumers.

Key findings from this study include:

• UI’s core workforce includes approximately 5000 people, of whom 60% are direct employees, and 40% are contract workers. Indirectly, the full-time equivalent (FTE) of about 300,000 people make their livelihoods in UI’s value chain.

• More than half of this employment is found in the distribution and retail chain. This includes an estimated 1.8 million small stores and street vendors.

• The closer and more formally workers in the value chain are linked with UI’s operations, the more they benefit from the company. Contracting out employment may reduce a company’s ability to monitor the situation of contract workers or suppliers’ employees, and thus result in gaps between corporate policy and practice.

Reprinted with permission from Unilever.

www.unilever.com/ourcompany/newsandmedia/unileverindonesia.asp