The beginning of 2013 brought IKEA, ’the Swedish furniture giant’, significant problems. The company was ‘dragged into the European horse meat scandal’ after authorities from multiple countries ‘have discovered horse meat in Swedish meatballs labeled as beef and pork.’ This article will focus and discuss how ethical were IKEA’s actions and response to the occurring situation with a relation to the Ten Principles of the United Nations Global Compact.
The horse meat scandal started on the beginning of 2013 and touched multiple companies, including IKEA. In their case, ‘“It started off as a local problem, then became national, then international,” said Chris Elliott, the director of the Institute for Global Food Security at Queen’s University Belfast. “At the last count, something like 19 countries were involved either in the supply chain or in uncovering tainted products.”’ The problem was serious. But, actually, why? What’s bad about horse meat? Let’s discuss that first.
’Horse meat is comparatively cheaper and healthier than beef’ so logically the result should be cheaper and healthier meatballs right? According to the Time, ’In Britain and Ireland […] eating horse is largely regarded as a taboo. […] There was once a papal ban on eating horse, imposed in the eight century in what was thought to be an attempt to differentiate between Christians and pagans. It’s also restricted for Jews and Muslims, due to religious dietary customs.’ Moreover, horse meat, especially coming from unreliable sources, can contain ‘the potentially harmful drug phenylbutazone — an anti-inflammatory treatment used on horses that can cause serious blood disorders’ which entered France as a result of the scandal.
Mentioned unreliable sources actually narrow down to one supplier only. Despite that fact, according to Simon Coveney, the agriculture minister of Ireland ‘clearly there has been fraud on a massive scale across multiple countries in the UE.’ The question raised here is: Was IKEA involved in that fraud and broke the 10th anti-corruption UN principle stating that ‘Businesses should work against corruption in all its forms, including extortion and bribery.’?
Shortly after the scandal IKEA has published a press release about already undertaken measures and next steps of the investigation as well as changed supply chain model which would increase the lost quality control. The release quotes ‘Global IKEA Food Manager, Edward Mohr, saying that ‘We take this very seriously and are now making changes to further strengthening traceability throughout the entire food value chain’’
Was this response honest? This is for public to judge. My personal opinion aligns with ‘Clive Black, a retail analyst at Shore Capital, an investment banking company in London, who said that Ikea’s announcement was “another left field random outcome of the whole situation. Did Ikea want to sell horse meat? No. Have they been caught out by rogue elements? Yes.”’ Following this direction, IKEA was involved in the corruption but unintentionally. Did they then brake the principle? Not really.
However, ‘the tenth principle against corruption commits UN Global Compact participants not only to avoid bribery, extortion and other forms of corruption, but also to proactively develop policies and concrete programmes to address corruption internally and within their supply chains.’ Since IKEA itself only realised the occurring problem in their supply chain after the products were exported, it is clear that IKEA did not take proactive measures against unethical behaviour of their supplier. On the other hand, some may argue that the supplier is legally a separate identity so IKEA shall not take responsibility for it. As much as this is correct, IKEA is responsible for the choice of its supplier, agreed terms and control.
Coming back to the company’s response about the scandal, the question raised here is: Was IKEA’s response ethical? This could be measured by the 8th UN principle stating that ‘business and industry should increase self-regulation, guided by appropriate codes, charters and initiatives integrated into all elements of business planning and decision-making, and fostering openness and dialogue with employees and the public.’
Previously mentioned IKEA’s press release was published shortly after the scandal. However, the company did not keep silent until the release. Multiple statements were made through few various media. This is an example of openness and dialogue with the customers and general public which is in accordance with the mentioned UN principle. Moreover, the release not only mentions the already undertaken proactive measures introducing higher quality control (which relates to the ‘increased self regulation’ but also answers 21 potential attacking questions. In my personal opinion, IKEA acted in accordance with the principle and therefore the response was ethical.
Looking generally at IKEA’s actions and response, it did behave ethically enough. What does that mean? IKEA’s acknowledgement of the situation, dialogue with the public and withdrew products from all of the European restaurants are perfect examples of how the public would expect the company to behave. However, the lack of proactive actions and letting the scandal to occur in the first place leave a lot of place for questioning about how ethical IKEA is at heart as, both as an individual or a company, you do not become ethical from one day to another.