As the agricultural sustainability trend grows in popularity, so, too, do the legal implications of introducing sustainability practices to the supply chain.

A growing number of agri-food companies in the global food supply chain are adopting agriculture sustainability standards. The reasons for this movement are varied – factors include an emerging business interest in corporate social responsibility, consumer demand and a growing awareness of all that is involved in the making of a food product. These standards are published in marketing materials, advertisements, reports and on company Web sites.

Agriculture sustainability standards in these venues create legal risks for agri-food companies, however. This makes it imperative for them to seek legal counsel with expertise in the law underlying these risks and in the legal, policy and business contexts of production agriculture and the global food supply chain.

Agriculture sustainability standards derive from corporate social responsibility (CSR), a fashionable concept that is receiving much attention and scrutiny. More than a mere subset of corporate social responsibility, however, sustainability in the food supply chain is complex and fraught with unique legal, business and social considerations. For starters, it involves the entire food supply chain, which consists of a variety of stakeholders, including producers and all of the players within the food industry, government and, of course, consumers.

Also, this supply chain is global, cutting across cultures, societies and legal systems. Adding to this complexity is the moral dimension of food serving as the very sustenance of life and of sustainable agriculture production improving the human race and the planet.

It is likely that the use of sustainability will continue to grow. The driver for escalated use will be a growing ethical consumerism, especially in wealthier countries. As the relationship between consumers and farms continues to develop and as wealthier societies continue to become more urban, agri-food businesses increasingly will be viewed either as the stewards for agriculture and food or reviled as despoilers. Adopting sustainability standards demonstrates stewardship virtues that appeal to consumers.

Legal Challenges
Agriculture sustainability standards create corporate governance issues and public expectations. Such expectations may increase the risk of liability exposure. Standards also may define legal relations between a client and other stakeholders in the food supply chain. Finally, standards may leave agri-food companies within the global food supply chain more vulnerable to public scrutiny and stigma.

As expected, the first legal task in working with agriculture sustainability standards is coming up with a definition that suits the company and is truthful and not misleading, which is no small task. The difficulty lies in the scope and focus. Components typically found in definitions of agriculture sustainability include conservation and preservation of the environment, food safety and quality, biodiversity, animal welfare, economic viability and social justice. The definition often depends on which component is perceived as the most important.

False Advertising Laws
The case of Kasky vs. Nike demonstrates how formulating agriculture sustainability standards may result in litigation exposure for an agri-foods business. To counter negative publicity generated by news reports of Nike's labor practices in foreign countries, Nike issued statements in public materials that the workers in its foreign factories received a living wage higher than the local minimum wage, received free meals and healthcare, and worked under conditions that complied with local laws regarding occupational health and safety.

Based on these statements and advertisements, Nike was sued under California's Unfair Competition and False Advertising Laws for allegedly making false and misleading statements. The California Supreme Court held that Nike could qualify for First Amendment protection afforded to commercial speech only if it could establish that its factual statements were true in the course of the litigation.

In 2003, the U.S. Supreme Court sent the case back to the California courts, ruling that the issue was premature for decision. A few months later, the case was settled.

The result of the still-standing California Supreme Court decision is that factual statements about corporate operations – the type of information often found in private codes and possibly in agriculture sustainability standards for agri-food companies – could be construed at least in California as commercial speech and as such may be regulated to “prevent consumer deception.”

Agri-food companies should recognize that many advocates of agriculture sustainability view its principles with a single-minded focus and will carefully monitor an agri-food company's performance, whether it is the safety and nutrition of food products, animal welfare, environmental management or worker treatment. 

Practical Pointers
These issues demonstrate the need for the agri-food company to be cognizant of the development of agriculture sustainability standards and to seek help and consultation where necessary. The following practical pointers serve as a guide in this effort:

Understand the global food supply chain – Many of the issues in food safety, rural development, the environment and animal welfare have certain trend lines that drive sustainability concepts. Be cognizant of these trends and how they affect agriculture production and the balance of the food supply chain.

Assess the need for outside help – Using auditors, third-party certifiers and outside legal counsel can help guide formulation and enforcement and avoid liability and vulnerability exposure.

Periodically review sustainability standards – Given the changing dynamics of sustainability and changing global agriculture conditions, it would be prudent periodically to review corporate sustainability standards.

Recognize limitations in controlling upstream stakeholders – Agri-food companies should be cautious about promising certain sustainable practices and values that involve activity over which they have no or little control.

Fit the sustainability standards within business strategy and culture – As part of corporate governance responsibility, care should be taken to ensure that the zeal for incorporating sustainability values in the business strategy matches what realistically can be delivered. Expectations should be kept in check and standards should be weighed in the scale alongside economic considerations.

Be practical – Instead of making lofty agriculture sustainability platitudes, the agri-food company should be aware of the practical ways that it can support sustainability in socially responsible ways, such as adhering to environmental laws and regulations. Common sense should be applied to ensure expectations are legally and operationally reasonable and yet also appropriately capture the market value of sustainability.

Michael T. Roberts is the former director of the National Agricultural Law Center and a law professor, and is an attorney with Venable LLP in Washington D.C. He can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or 202-344-4684. Nancy S. Bryson is the most recent former general counsel to the U.S. Department of Agriculture and chairs the Agriculture and Food Law Group at Venable LLP. She can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or 202-344-4381.