We present a summary of results below in Table 1 (international sourcing scenario) and Table 2 (local sourcing scenario). A comprehensive overview of additional environmental, social, and economic inventory data and sources of our analysis are provided in Supplement 1 (international sourcing scenario) and in Supplement 2 (local sourcing scenario). Calculation details on the environmental LCA are provided in Supplement 3 (Electronic Supplementary Material).
International sourcing scenario: environmental LCA
The production process comprises the manufacturing of a kitchen set in India. The scrap is not recycled. Furthermore, no emissions to air or water are reported. Results show that to produce 1 t of kitchen sets (which corresponds to 1000 sets), 3923 kg of CO2 is emitted. In the production phase, 99 % of the endpoint impacts are related to human health according to the ReCiPe analysis (see Supplement 3, Electronic Supplementary Material).
Steel materials are shipped from the steel manufacturing site (Jamshedpur) to the kitchen set manufacturer by train via Mumbai (last-mile delivery by truck). Finished goods are shipped in corrugated boxes from the factory to the port of Mumbai (India) by truck and then dispatched by sea to, among other locations, Kenya (Port of Mombasa). Last-mile delivery to refugee sites Kakuma and Dadaab takes place by truck. Based on the ReCiPe analysis, we can observe that the main midpoint impacts of this transportation mode mix are on the areas of climate change (CO2), marine eutrophication (NO
), and terrestrial acidification (SO2) (see Supplement 1, Electronic Supplementary Material), with climate change being the greatest of these.
In total, the production phase accounts for 97 % of the impacts related to climate change whereas the transport phase accounts for only 3 %. The endpoint impacts are observed mainly in the human health impact category.
International sourcing scenario: social LCA
The Indian steel manufacturing sector is characterized by a large number of trade unions (Singh 2008). However, it is unclear the extent to which they are effective as some suffer from inter-union competition and financial instability. Cases of child labor and forced labor are not found in the steel pot manufacturing industry; however, on average, 14.4 % of children ages 10–14 are in the work force (ILO 2015). In India, compliance with minimum wages is generally low (ILO 2014). Moreover, the gender wage gap is quite significant and women earn approximately 30 % less than men. Additionally, social security expenditures in India are quite low. According to company data, working conditions in the steel pot plant in India are above the sector/country averages presented in the information above. The working conditions are reasonably good, as the supplier guarantees good work ethics (though specific examples are not provided by the company) (Alpinter 2015).
The local community is mainly impacted by limited access to material and immaterial resources. In India, 35 % of the population has access to adequate sanitation facilities. The Ministry of Steel has planned projects to improve infrastructures as steel transport relies heavily on these. Potential material resource conflicts can arise when people are forced to leave their land; however, the indigenous people do not to seem to be at risk of this since the north, where they are living, is not an iron mining area.
There does not seem to be a public commitment to sustainability issues. There are no direct signs that the supplier applies codes of conducts (Alpinter 2015). The economic contribution of the steel pot manufacturing sector is unclear. India is the world’s fourth largest steel producer. The steel production industry seems to make a major contribution to the Indian economy and its GDP growth of 3.2 %. Because of mining activities, there is a risk of land acquisition conflicts.
Impacts are determined based on this social inventory data using the method described in Ciroth and Franze (2011) (see chapter 3, “Methodology” section; see Supplement 1, section 2, Electronic Supplementary Material). With regard to the worker stakeholder group, i.e., specifically on matters of child labor, fair salary, and forced labor, the company/sector perform well (PA score 2).Footnote 4 Regarding discrimination, the sector performs poorly (PA score 5), which results on average in an inadequate overall performance (PA score 4). As the poor performance on discrimination contributes to all impact categories, the impact on the end result (IA score 4) is quite significant.
Concerning the stakeholder group local community, the rather poor performance (PA score 4) and negative impact (IA score 4) of safe and healthy living conditions and the rather good performance with respect to indigenous rights (PA score 2) and positive impact (IA score 2) result in an average IA score of 2.9 (slightly positive/indifferent effect).
Lastly, when considering society, the poor public commitments to sustainability issues (PA score 4), the negative impact of prevention and mitigation of conflicts (IA score 4), and very positive effect of contribution to economic development (IA score 1) result in an aggregate lightly negative effect for society (score 3.4).
International sourcing scenario: LCC
The procurement cost of the Indian kitchen set is US$18.34. The transportation cost per unit for India–Kakuma and India–Dadaab is US$4.23 and US$3.23, respectively (see Supplement 1 for more details on transport costs, Electronic Supplementary Material).
Local sourcing scenario: environmental LCA
The production process comprises the manufacturing of a kitchen set in Kenya. No solid wastes or emissions to air are reported. However, treated water is reported as emissions to water, based on estimates by engineers. To produce 1 t of kitchen sets, only 363 kg of CO2 is emitted, resulting in climate change midpoint impacts and main endpoint impacts on human health. Regarding transportation, steel materials are shipped from the steel manufacturing site in India to Mumbai harbor by train (last-mile by truck), then dispatched by sea to Kenya (Port of Mombasa). Subsequently, the steel materials are transported by truck to the kitchen set supplier in Nairobi where the kitchen sets are manufactured. Last-mile delivery to refugee sites (Kakuma and Dadaab) takes place by truck. Based on the ReCiPe analysis, the midpoint impacts of transportation are in the areas of climate change (CO2), terrestrial acidification (SO2), and particulate matter formation (PM), with the dominant being climate change (see Supplement 2, Electronic Supplementary Material). The contribution of the production phase to climate change is 69 % and that of transportation phase is 31 %. The endpoint impacts are mainly observed in the human health impact category.
Local sourcing scenario: social LCA
The Kenyan industry sector has a significant number of trade unions and they seem to be quite successful in negotiating collective agreements. With regard to working time, employees are entitled to have 24 consecutive hours of rest per week and a regular work week is 52 h. Overtime is restricted to a maximum of 6 h per week and employers must pay overtime to their employees equal to at least 150 % of the wage. There is a medium level of discrimination in the country. At the sector level, women earn 8 % less than men, on average; and in the manufacturing industry only 26.3 % of the workforce is female. At the factory in Kenya men and women are paid the same.
As regards local community indicators, the steel industry encompasses about 13 % of the manufacturing sector. Because no raw materials are extracted locally, however, the local steel industry depends on imported raw materials. Only 29.4 % of the population has access to adequate sanitation facilities. Potential material resource conflicts could arise as conflicts in Kenya revolve around land issues; however, conflicts in Kenya currently stem primarily from differing community identities. Lastly, the crime rate in Kenya is relatively high compared to other countries.
Concerning public commitment to sustainability issues, it is notable that a National Environmental Tribunal has been in force since 1999 and is highly successful according to the United Nations. The supplier in Kenya, however, does not seem to be strongly committed as it did not sign any codes of conduct with regard to this matter. Kenya has reasonable GDP growth of 5.1 %. The general country profile shows that Kenya has been disturbed by corruption and that Kenya’s long-term position will be influenced by the extent to which its infrastructure is properly developed. Furthermore, Kenya is vulnerable for violence because of its proximity to Somalia and Sudan, which are known for the violent terrorist groups Al Shabaab and Al Qaeda. Land use issues revolve around natural resources, such as oil, metals, and water; however, these do not seem to relate directly to the steel manufacturing sector.
Once again, we assess impacts from the social inventory data using the method described in Ciroth and Franze (2011). Regarding the performance assessment of the worker stakeholder group, with respect to “freedom of association” and “working hours,” the company/sector performs well (PA score 2). Performance regarding “fair salary” is satisfactory (PA score 3) and performance regarding “discrimination” (PA score 4) is quite poor, resulting in negative impact scores for these two categories (IA score 4). In aggregate, the social impacts for workers are indifferent/lightly positive (IA score 2.6). As concerns the stakeholder group local community, very poor performance on access to material resources (PA score 5) and secure living conditions (PA score 6) result in aggregate negative social impacts for local community (IA score 4). Lastly, with regard to society, effects of public commitments are positive (IA score 2) and negative for corruption (PA score 5; IA score 4). Aggregating the social impacts of the three groups of stakeholders results in a social impact score of 3.23 for local sourcing in Kenya; this implies an indifferent-lightly negative effect.
Local sourcing scenario: LCC
Products are shipped directly from the supplier to the destination camps, Kakuma and Dadaab. The procurement cost of a kitchen set is US$23.10. The transportation costs per unit for Nairobi–Kakuma and Nairobi–Dadaab are US$2.14 and US$1.14, respectively (see Supplement 2, section 3 for more details on transport costs, Electronic Supplementary Material).