Ethical trade means that retailers, brands and their suppliers take responsibility for improving the working conditions of the people who make the products they sell. Most of these workers are employed by supplier companies around the world, many of them based in poor countries where laws designed to protect workers' rights are inadequate or not enforced.
'Doing' ethical trade is much harder than it sounds. Modern supply chains are vast, complex and span the globe. Labour issues are themselves challenging. For example, what exactly is ‘a living wage'? What should a company do if it finds children working in a supplier's worksite? Evicting children from the workplace can, paradoxically, make their lives worse.
With a combined turnover of over £166 bn, our company members include supermarkets, fashion retailers, department stores and stone sourcing companies, as well as major suppliers to retailers of food and drink, flowers, clothing, shoes, homewear, promotional and other products. While many of our companies are based in the UK, we also have members from Australia, Germany, Spain, Sweden and USA.
, which is based on the standards of the International Labour Organisation (ILO). We work out the most effective steps companies can take to implement the Base Code in their supply chains. We learn by doing, and by sharing our experience. Our projects and working groups develop and try out new ideas, often piloting these approaches on the ground in sourcing countries. By taking part in these groups as well as in roundtable discussions, our members collectively establish good practice in ethical trade. We then develop training and resources to capture this learning, providing practical tools to help companies to put their ethical trade policies into effect.
We help workers to help themselves
Codes of labour practice can, and should, help create space for workers to bargain with management through trade unions. In several countries around the world we are supporting initiatives that raise workers' awareness of their rights and helping create work cultures where workers can confidently negotiate with management about the issues that concern them. We also broker resolutions where there are major breaches of trade union rights by companies that supply our members.
In today's global economy, all companies have issues in their supply chains. By joining ETI, a company is acknowledging these issues and making a commitment to tackling them. Our member companies report annually on their efforts and the results they are achieving at farm or factory level.
Up to a million homeworkers in the UK work help produce, package, assemble or process a diverse range of products, from clothes, shoes and electrical components to gifts and greetings cards.
ETI has written twice to the Uzbek High Commission on behalf of all ETI members to call on the Uzbek government to implement a meaningful ban of child labour and forced labour. Leading ETI member companies have also instructed their suppliers not to source cotton from Uzbekistan, and many are investing in processes to map the integrity of cotton sourcing to monitor this policy.
We created a safe space for talks between the Turkish supplier company Desa and the Turkish leather workers' union Deri Is after 44 union members had been dismissed. After months of protracted and often stormy negotiations, in September 2009 Desa signed a protocol agreement with Deri Is, committing to reinstating a proportion of the dismissed workers and giving first priority in any new hiring opportunities to the remaining workers.
In the mid 1990s, several well-orchestrated trade union and NGO campaigns and media exposes highlighted the exploitation of people making clothes, shoes and other products for major global brands and retailers. In response, the companies started to adopt codes of labour practice governing the working conditions of the people in their supply chains.
In 1997, a group of companies, trade unions and NGOs began a discussion about how codes could be made effective. They identified the need for a body that would establish consistent standards and guidance for ethical trade, which would combine the authority and expertise of the trade union and campaign movement with the practical know-how and buying leverage of big business.
Our own monitoring exercises and the current global economic climate point to the need for a radical response from the ethical trade community. There is a clear need for us to do more to help companies support their suppliers to build sound management structures and mature systems of industrial relations, and more broadly, to integrate their ethical principles into company buying practices. For example, lead times and price negotiations with suppliers can have a profound effect on hours of work and pay levels.
Towards greater transparency: the business case
This will provide a robust framework from which members can set their ethical trade strategic objectives, evaluate their practices and assess how these affect workers’ rights.
provide publicly available, authoritative and well-recognised reports on member companies to support their commitments and achievements.
Looking forward, this will enable our members to collaborate more effectively and be more open about business practices.
Furthermore, our outcomes relate to ‘hard to measure’ issues such as tripartite collaboration, influencing business practices and the treatment of workers through a cycle of continuous improvement.
Consequently, our ME&L framework is designed to help us gather relevant information in flexible and creative ways.
By doing this, we monitor our progress against our strategic objectives and identify lessons for our own improvement.
“There is no doubt that jobs will continue to be a force for good in developing countries, giving working people the chance to be part of the global economy. It is crucial we all keep the spotlight on business practices. I am determined that Britain will continue to play its part in improving the lives of employees in the developing world.”
