Integrating Human Responsibilities in the Framework of Social Solidarity Economy by Dr. Benjamin R. Quiones, Jr.

1 Manila, February 2013 Evaluation Report submitted to the Asian Solidarity Economy Council Abstract This evaluation report focuses on an action research conducted by the author in collaboration with partners of Asian Solidarity Economy Council (ASEC) and concluded in 2012. The action research reveals the dynamics of responsibility sharing among economic stakeholders at the level of community-based supply chains. Crucial steps in developing a culture of shared responsibility are: (i) the co-creation by stakeholders of a shared vision of an inclusive, resilient, and sustainable community; (ii) the formulation of a road map to concretize the shared vision and which elaborates the responsibilities of stakeholders in proportion to their resources, power, and knowledge; and (iii) the establishment of a feedback mechanism that constantly informs the stakeholders of where they are in the journey. The process of formulating a feedback mechanism paved the way to the construction of an evaluation tool for conceptualizing, measuring, and evaluating Social Solidarity Economy (SSE) performance. In 2012, ASEC pilot tested the evaluation tool on a limited scale of 15 case studies: 9 from Indonesia, 5 from the Philippines, and 1 from Cambodia. Discussed at ASEF (Asian Solidarity Economy Forum) Indonesia (Manado city, North Sulawesi, October 103, 2012) and at ASEF Philippines (Angeles city, Pampanga, October 26-27, 2012), the case studies provided concrete basis for the formulation of a shared vision of SSE. The action research illustrated the usefulness of the value chain analysis in evaluating SSE performance and its advantages over the individual enterprise method of analysis in capturing the dynamics of shared responsibilities of economic stakeholders in a collective effort to build sustainable communities. But the evaluation tool can stand a lot of improvement. ASEC welcomes the collaboration of other organizations and networks in extending the action research to other countries. Conceptual framework of SSE An important objective of the action research was to highlight the articulation of the principles of human responsibilities in the conceptual framework of SSE. At first glance, this appears to be a not so difficult task because by its nature SSE is a development approach based on shared responsibilities among its stakeholders. What makes the task a bit more challenging is that the concepts and practices of SSE differ across continents, and consensus seems lacking on how to define SSE. SSE case studies presented at the last three events of ASEF (Manila 2007, Tokyo 2009, and Kuala Lumpur 2011) largely highlighted the performance of branded initiatives such as microfinance, fair trade, organic farming, etc. but they routinely failed to explain the alignment of these initiatives with SSE. Thus at the end of the event, participants amassed more knowledge about the individual development initiatives but their understanding about SSE remained superficial. This calls to mind the tale about a study visit to learn the
1 The author is the President & CEO of ASEC (Asian Solidarity Economy Council) and Executive Coordinator

of RIPESS (Intercontinental Network for the Promotion of Social Solidarity Economy). The views expressed in this paper are those of the authors and do not necessarily reflect those of the organizations he represents.

nature of a forest. As told, participants returned from the study visit with more knowledge about trees but they failed to see the forest. In this light, much of the authors work during the period covered by this report (2012) devoted to tackling the fundamental issue of conceptualizing SSE. A closure of this task is of great importance inasmuch as only then can we begin to measure and evaluate SSE. The specific issue at the outset is: What are the dimensions of SSE? The American Heritage Dictionary defines dimension as a measure of spatial extent - especially width, height, or length magnitude, or scope. The contemporary approach is to view the dimensions of an economy based on the concept of gross domestic product or GDP. An international agreement on the dimensions of GDP made comparative studies of GDPs possible across territories and over time. But this productivity-centric and growth-oriented concept of the economy is widely criticized for its lack of insight into the social and environmental aspects of development. The action research was initiated in the year 2010 to ascertain how the principles of human responsibilities contribute to the fleshing out of the SSE dimensions. The author was involved in the action both as a researcher and development worker while at the same time learning from it, which in turn enabled him to further inform the actors. From around 300 stakeholders from more than 100 organizations in the Philippines, a random sample of 100 individuals were selected and invited to participate in a focus group discussion on concepts of SSE in September 2010. A total of 63 individuals responded positively and participated in the focus group discussion. Subsequently, they identified 33 descriptors of SSE. Of this number, 16 were the most common: at least two-thirds of the respondents cited each of the 16 descriptors as being part of their individual concepts of SSE. The 16 descriptors are shown in Table 2. Participants of the focus group discussion classified the descriptors into five groups, which then became known as the key dimensions of SSE. These are: - Socially responsible governance: SSE policies and practices of governance that guide and enable SSE stakeholders to protect the environment and meet their development rights in a sustainable way and in accordance with their common but differentiated responsibilities and respective capabilities. - Edifying Values/ethical principles: ethical principles that bind stakeholders to a concerted effort to demand and achieve their development rights and which prioritize the welfare of people and planet over profits and unsustainable growth. - Social development services to the community: services provided by SSE stakeholders to enhance the capacity of local citizens to live a dignified, sustainable ways of life. - Ecological conservation measures: steps or measures undertaken to maintain environmental protection. - Economic sustainability: economic contributions of stakeholders that increase financial sustainability of SSE enterprises. The present report highlights the steps taken after the key dimensions of SSE have been formulated.

Supply chain and the notion of shared responsibility The next crucial step after determining the key dimensions of SSE was to ascertain the appropriate scope of analysis. In contemporary economics, the scope of analysis is either at the microeconomic (the primary enterprise or household) level or the macroeconomic (aggregate of enterprises or households) level. At the 3rd Asian Solidarity Economy Forum (ASEF) on October 31 - November 2, 2011, ASEC members unanimously chose the community-based supply chain as the basic SSE unit of micro-economic analysis. The macro-level SSE can then be perceived as the aggregation of SSE supply chain networks at the national and global levels. A supply chain is a fundamental unit of any economic system. It involves the basic economic activities of input supply, production, distribution/logistics, finance, and consumption, all of which contribute to the creation of value added to existing resources of a community. Such value added increases peoples welfare when it meets what Amartya Sen calls the peoples development rights. A supply chain also requires the cooperation of various stakeholders (input suppliers, producers, distributors, financiers, and final users/ consumers) to ensure that the resulting product is of good quality, it meets the needs of the people, and it is accessible. In other words, an important condition for the sustainability of a socially inclusive and resilient supply chain is that it meets the rights of stakeholders. But this is not sufficient. The sufficient condition is that stakeholders fulfill their responsibilities. In fact, ensuring the sustainability of a socially inclusive and resilient supply chain is a shared responsibility Towards the end of 2011, and owing to preparations for Rio + 20, the issue arose: Why is the notion of shared responsibilities fundamental to the transition from a growth-oriented economic system to a new development model? This issue was relevant to the discussions in Asia because SSE is seen in this continent as an alternative to the mainstream economic system that is oriented towards maximizing growth and personal gains. Incidentally, the Forum on Ethics and Responsibility (FER) has prepared well for this issue and provides some compelling reasons for the move towards the great transition. The specific arguments are well articulated in the FER documents Proposal for Charter of Universal Responsibilities and On Human Rights and Responsibilities, but two can be mentioned here to summarize all, as follows: (1) the scope of todays necessary changes is out of range of individuals and implies that all people and all public or private institutions become involved in them; and (2) consideration of the interests of others and of the community, and reciprocity among its members are the foundations of mutual trust, a sense of security, and respect of each persons dignity and of justice. The Principles of Human Responsibilities embedded in the Ethical Principles of SSE One of the realizations in the early stages of the action research was that the principles of human responsibilities are embedded in the ethical principles of SSE. A shared responsibilities approach presupposes the adoption of common ethical principles as inspiration for the behavior and rules of the stakeholders of an economic system. These common ethical principles, articulated in FERs Universal Declaration of Human Responsibilities, can be summarized as follows: (1) Individual human beings and everyone together have a shared responsibility to others, to close and distant communities, and to the planet, proportionately to their assets, power and knowledge; and 3

(2) the possession or enjoyment of a natural resource induces responsibility to manage it to the best of the common good. From this realization, it was evident that the shared responsibilities approach cannot be fully undertaken by just one sector of the economy alone. It is important for all sectors the public sector, the private business sector (including micro, small, medium, and big enterprises), the civil society sector, and the self-managed enterprises of the poor, socially excluded, and the economically disadvantaged - to collaborate in transforming the economy. Inasmuch as the public sector is heavily influenced by the market-oriented private business sector, and given that these two sectors together pursue the growthoriented model of development, it is vital for the SSE movement to take the bold initiative of eliciting and consolidating support from sympathetic government agencies, private businesses, NGOs, and self-managed enterprises of the poor, socially excluded, and the economically disadvantaged. It is in this context that ASEC vigorously promoted the notion of the SSE supply chain as the focal unit of action for effecting shared responsibilities (solidarity) at the community/ territorial level. A stylized supply chain is illustrated in Diagram 1 below. All economic supply chains take resources from the biosphere, including base metals and nonrenewable energy, as inputs for commodity production. They also throw out wastes into the biosphere from every stage of production to end-user consumption. Because the supply of energy and base metals is not infinite, a development model oriented towards sustained growth will reach its limits as natural resources are depleted. Stakeholders of the supply chain will, therefore, have to take a decision whether to continue with the profit-growth model or to make a transition to the triple bottom line model.

The SSE supply chain is unique because it includes self-managed enterprises of the poor, socially excluded, and economically disadvantaged as co-equal stakeholders.

Measuring and Evaluating SSE supply chains Following the 3rd Asian Forum in Kuala Lumpur in October 2011, ASEC sought to focus future case studies on measuring and evaluating SSE. The author suggested an evaluation system that uses the performance indicators of the 5-dimensional framework of SSE and a scorecard for each of the 16 descriptors of SSE. The scorecard assigns possible values of each performance indicator as follows: 0 - not practiced; 1 - weak practice; and 2 - strong practice. Thus, a tool for evaluating SSE performance was constructed. On the first quarter of 2012, ASEC conducted roundtable discussions among local partner organizations in Indonesia, Malaysia, Philippines, Cambodia, and Sri Lanka to determine the extent to which their frameworks of SSE harmonize with the aforementioned 5 key dimensions of SSE. Surprisingly, participants of the roundtable discussions unanimously endorsed the 5 key dimensions of SSE as a common framework for defining SSE. They also agreed to use the 5-dimension framework and its accompanying tool for evaluating SSE cases in their respective countries. Capitalizing on this positive response, ASEC pilot tested the evaluation tool on 15 case studies (9 in Indonesia, 5 in the Philippines, and 1 in Cambodia) 2, all of which were subsequently presented at the Asian Forum Indonesia (Manado, North Sulawesi, Indonesia, October 1-3, 2012) and also at the Asian Forum Philippines (Angeles City, Pampanga, Philippines, October 26-27, 2012). Findings and Results Firstly, the action research disclosed the importance of creating a learning environment (i.e. ASEF and country level forums and/or roundtable discussions) where like-minded individuals can exchange ideas and share experiences. The ASEF and accompanying roundtable discussions served as the media for communication and feedback on the promotion of SSE shared vision. Continuing forums and discussions allowed participants to consolidate their vision of SSE, to ascertain the gap between shared vision and current practice, and to take appropriate actions to close the gap. The role of a change agent in creating a learning environment cannot be overemphasized. Change agents for SSE have emerged in some Asian countries (e.g. Universiti Sam Ratulangi in Indonesia, the Jaringan Masyarakat Ekonomi Malaysia, and the On Eagles Wings Development Foundation Philippines Inc.). It might be relevant to cite Daft (1998) that the process of change in organization development follows a peculiar pattern: from individual, to groups, to organization. Indeed, the SSE vision crystallized first in the minds of individuals, and as individuals shared their SSE visions with other people, groups of adherents were formed, and these groups in turn influenced organizations. It is also enlightening to cite Senge (1990) who pointed out that the sharing of mental models through open discourse facilitated by change agents is instrumental in cultivating positive attitudes towards the shared vision.
2

Sixty (60) case studies were submitted by students of Sam Ratulangi Universiti under the guidance of Dr. Peggy Mekel, then Director of International Business Administration (IBA) for presentation at the Asian Solidarity Economy Forum (ASEF) in Manado, Indonesia held on October 1-3, 2012. The case studies were screened and only 9 qualified for evaluation by an international team comprising of representatives from international organizations. Each of the 5 case studies from the Philippines were evaluated by a team of 5 composed of delegates of ASEF Philippines 2012 (Angeles city, Pampanga. October 26-27, 2012), while the lone case from Cambodia was evaluated by ASEC Vice-Chair Datuk Dr. Denison Jayasooria.

Secondly, the action research revealed marked differences in the performance of individual enterprises belonging to the same supply chain in terms of the 5 key dimensions of SSE. This is evident in the case study of free-range chicken supply chain by the On Eagles Wings Development Foundation Phil. Inc. Table 1 shows the distribution of functions of the various stakeholders of the supply chain. Accordingly, the not-for-profit organizations (OEWF, NTM, and SVC) registered strong performance in the dimensions of socially responsible governance, edifying values/ethical principles, and social development, whereas the for-profit companies (BDC, Agri Chexers, and BHF) were strong in the dimension of economic sustainability but weak in the areas where notfor-profit organizations were strong. Despite these differences, or perhaps because of them, the organizational stakeholders of the free range chicken supply chain sought for and found a way to collaborate, thus establishing a common ground for advancing SSE. Table 1. Inputs provided by various stakeholders of the free-range chicken project
Input Supply Type of input Chicken Chicken coop Production Technology Incubator Feeds, veterinary supplies Training Utilities Human resource Financing Project coordination Partner BHF Hardware shops BHF Hardware shops Agrichexers OEWF Utilities company, coops BHF, NTM, OEWF SVC, BDC OEWF, NTM Production Production process 99 hens, 11 cocks Construction of chicken cage Raising of free range chicken Incubation of eggs Feeding of chicken Capacity building Power, water supply Workers Project finance Management Product Chicks Chicken cage Live chicken for sale Chicks for dispersal Live chicken/ chicks for sale Experts Power, water Labor Loan, investment Project Managers Market/ consumption Destination NTM OEWF, NTM OEWF, BDC, NTM, SVC, BCO BCO NTM NTM NTM NTM NTM NTM. BCO

Source of information: On Eagles Wings Development Foundation Phil Inc (2012)

The above case illustrates a situation where different types of enterprises public utility agencies, private business enterprises (e.g. BDC, BHF, Agrichexers) , NGOs (e.g. NTM, OEWF), and self-managed enterprises of the poor (e.g. SVC, BCO) are engaged in business transactions with each other to make the socially inclusive supply chain work. The broader implication of this finding is that within the supply chain, the sharing of risks and responsibilities among various stakeholders could spell the difference between success or failure of the supply chain as an SSE initiative. Thirdly, the action research provided some empirical evidence on the fit between the SSE shared vision and performance. Evaluation results (see Table 2) show that selected SSE cases from the Philippines and Cambodia garnered high performance scores, ranging from a low of 1.40 to a high of 1.78 (highest score is 2.0), and comparatively better than most SSE cases from Indonesia. This implies that the Philippine and Cambodia SSE cases had features that closely resemble the ideal SSE. On the other hand, Indonesian cases had 6

lower scores (i.e. the SSE cases greatly differed from the ideal SSE) most probably because the student case writers were still grappling with the fundamental issue of how to distinguish SSE enterprises from those that are not. Fourth and lastly, the action research highlighted certain advantages of the value chain analytical approach. These are: Model of multi-stakeholder cooperation and solidarity: The value chain represents a multistakeholder model of cooperation and solidarity that is required for collective action to meet specific needs of the people. Complex socio-economic relationships: Value chain analysis helps in understanding the complexity of social and economic relationships among stakeholders within a given enterprise as well as among the several enterprises involved in the value chain. Shared risks and responsibilities: Value chain analysis enables deeper understanding of how risks and responsibilities are distributed and shared among the stakeholders in proportion to their resources, power, and knowledge. It also provides a broader view of the resilience of SSE generated by the mutually reinforcing actions of stakeholders. The burden of transitioning: Value chain analysis allows one to locate the cost burden of institutional change, in particular the cost of organization development, as the value chain transitions from the purely economic or financial (profit maximization) bottom line to the triple bottom line of social development, ecological conservation, and economic sustainability. Conclusion and Future Action The action research reported in this paper has explained the potential and limits of ASECs 5-dimensional framework of SSE and its evaluation tool for conceptualizing, measuring, and evaluating the dynamics of responsibility sharing among economic stakeholders at the level of community-based supply chains. The co-creation by supply chain stakeholders of a shared vision is a crucial step in a shared responsibility approach to building inclusive, resilient and sustainable communities. The evaluation tool has illustrated the usefulness of the value chain analysis in SSE performance evaluation and its advantages over the individual enterprise method of analysis. But the evaluation tool can stand a lot of improvement. ASEC welcomes the collaboration of other organizations and networks for extending the action research to other countries. The collaborative effort will truly contribute to a broad, participatory creation of a global vision of SSE, which incidentally is the main agenda of the 5th RIPESS International Forum on the Globalization of SSE to be held on October 1518, 2013 in Manila, Philippines It is hoped that this paper can make a modest contribution to the highly challenging process of advancing the transition to more inclusive, resilient and sustainable communities.

Table 2. Evaluation of 5 Dimensions of SSEs: Indonesia, Philippines, & Cambodia

INDICATOR GEG 1. Social Mission-oriented governance 1.1 the poor participates in ownership & management of the enterprise 1.2 the poor shares profits of the enterprise 2. Edifying values 2.1 cares for & shares resources w/ poor 2.2 strives to meet the needs of the poor 2.3 just and fair in business transactions 3. Social development services 3.1 financing of enterprises of the poor 3.2 marketing products of the poor 3.3 skills & mngt training for the poor 3.4 conduct values formation among poor 4. Ecological conservation measures 4.1 preserving biological diversity 4.2 use of clean production technology 4.3 reducing energy consumption 4.4 recycling & re-use 1.67 2.00 1.67 1.33 0.67 0.33 1.00 1.67 1.00 1.67 1.00 1.33 1.00 KUD 1.00 1.33 1.00 0.67 1.00 0.67 1.00 3.00 1.00 1.00 0.33 1.00 1.00 UDR 1.00 1.67 2.00 2.00 1.67 1.00 1.67 2.00 1.00 1.00 2.00 2.00 1.67 CVR 0.33 2.00 2.00 1.33 1,67 0.67 1.33 1.67 0.67 1.00 1.00 1.33 2.00 INDONESIA GRP 0.33 1.00 1.33 1.33 1.33 0.67 1.67 2.00 1.67 0.67 1.33 1.00 1.00 PPB 0.33 0.33 1.00 1.67 1.67 0.33 1.00 1.67 1.00 1.33 1.00 1.67 2.00 1.67 0.67 1.33 18.00 1.13 IVR 0.33 1.33 1.33 1.33 1.67 0.33 1.33 1.33 0.67 0.33 1.00 1.33 0.67 1.67 1.33 2.00 17.67 1.10 VSM 0.33 1.33 1.67 1.33 1.67 0.33 0.33 1.33 0.67 0.33 0.67 1.67 2.00 1.67 1.67 1.67 18.67 1.17 PPM 0.67 1.33 1.67 1.67 1.33 0.67 1.33 0.67 2.00 1.00 1.67 1.67 2.00 1.33 1.67 1.33 22.0 1.38 PHILIPPINES FID 1.4 1.8 1.8 1.8 1.6 2.0 1.8 1.4 1.8 0.8 0.4 0.6 0.2 1.8 1.6 1.6 22.4 1.40 CSS 1.0 0.25 1.5 1.5 1.5 0.5 1.25 1.25 1.5 2.0 2.0 2.0 1.0 2.0 2.0 1.75 23.0 1.44 CBC 2.0 2.0 2.0 1.8 1.8 1.8 1.2 1.8 1.2 1.8 1.6 1.0 0.8 2.0 2.0 2.0 26.8 1.68 OS 1.6 1.8 1.8 1.8 1.4 1.8 2.0 1.8 1.6 1.6 1.6 1.0 0.8 1.8 1.8 1.8 25.8 1.61 FRC 1.4 2.0 2.0 1.8 1.6 1.8 1.8 1.6 1.6 2.0 1.6 1.8 1.8 1.8 2.0 1.8 28.4 1.78 CAMB ODIA SEP 1.4 1.8 1.8 1.8 1.2 1.8 1.4 1.8 1.6 1.2 1.4 1.2 0.8 2.0 1.8 1.8 24.8 1.55

5. Economic sustainability 5.1 creates entrepreneurial activities for the 1.33 0.33 1.33 1.67 1.67 poor 5.2 the poor is part of enterprise supply chain 2.00 1.33 1.33 1,67 1.33 5.3 the poor gains financial benefits from the 1.33 1.00 1.33 1.33 1.00 enterprise SUM TOTAL Total Score 21.00 15.67 24.67 21.67 19.33 Average Total Score 1.31 0.98 1.54 1.35 1.21 Sources of basic data: Case studies from Cambodia, Indonesia, and the Philippines

REFERENCES
Asian Solidarity Economy Forum, Philippines October 2012. Compilation of case studies on SSE supply chains. Word documents. Daft, L.R. (1998). Organization theory and design (6th edition). Cincinatti, Ohio: South-Western College Publishing. International Business Administration, Sam Ratulangi Universiti. October 2012. Compilation of case studies on SSE supply chains. Word documents. International Forum on Ethics & Responsibility.( 2011). Universal Declaration of Human Responsibilities. Manuscript. Paris: Charles Leopold Mayer Foundation. On Eagles Wings Development Foundation Philippines Inc. (2012). Evaluation of the free-range chicken supply chain: A social & solidarity economy case study from the Philippines. Unpublished paper. Quiones, Benjamin Jr. (2012). Sowing the Seeds of Solidarity Economy: Asian Experiences. Kuala Lumpur: Social Entrepreneurship Centre, Binary University College. Quiones, Benjamin Jr. (2012). Organization development finding its way into the Bayanihan Learning Journey. Unpublished PhD thesis. Quiones, Benjamin Jr. (2012). Revisiting Solidarity Economy. Unpublished manuscript. Paper presented at the Asian Solidarity Economy Forum, Stotsenberg Hotel, Pampanga, October 26-27, 2012. Senge, P.M. (1990). The fifth discipline: the art & practice of the learning organization. New York: Currency Doubleday.

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