Ethical Sourcing - Mayer House Business Media Ltd.

Ethical trade became a growing issue during the 1990s because companies with global supply chains – in particular those in the clothing and food sectors – were coming under increasing pressure to ensure decent working conditions for the people who produce the goods they sell. A number of NGO and trade union campaigns raised consumers’ awareness of poor working conditions in factories and farms in developing countries – factories and farms that produced goods for leading companies in Europe and North America.

As a result, a growing number of companies have decided that they can no longer turn a blind eye, and have adopted some form of ethical sourcing policy to address growing public concern over supply chain labour issues. Pressure on companies has been maintained as NGOs and trade union organisations, both large and small, and both in developing as well as developed countries, have continued to campaign on these issues. Moreover, corporate investment companies are increasingly screening their investments according to a range of social and environmental criteria, including a company’s efforts in addressing supply chain labour conditions. Together, these trends are making it more and more difficult for companies to ignore ethical sourcing issues.

 

The Ethical Trading Initiative (ETI) is an alliance of retailers, brands and suppliers, trade unions and charities that work together to promote and improve the implementation of corporate codes of practice which cover supply chain working conditions. They provide practical tools and guidance to help buying companies implement the ETI Base Code.

“There are limits to what companies can achieve by working alone.  ETI members have committed to work in partnership to find solutions to the problems that occur in individual workplaces, but that also affect entire countries and industries” says Dan Rees, Director Ethical Trading Initiative.

 

BTC Group have signed up to the nine principles of the ETI Base Code, which are as follows:

Membership of the ETI enables BTC Group to actively contribute to and learn from projects conducted in regions where the ethical rights of workers are of utmost importance. Members learn how to put ethical trade into practice and to increase their impact by working in collaboration with other ETI members.

Jon Birrell, Senior Marketing Manager at BTC Group, comments “It is becoming increasingly essential for companies to consider the working conditions under which their promotional merchandise and corporate clothing are manufactured, and this is not just limited to multinational corporations.  BTC Group’s membership demonstrates our commitment to progressively improving conditions in our suppliers’ work places”.  

BTC Group celebrated their 30th anniversary in 2007 and are proud to be the largest privately owned promotional merchandise & corporate clothing supplier in the UK with an excellent reputation for quality and customer service.  Membership of the ETI was the next logical step in expanding their corporate responsibilities after achieving ISO 14001 for their integrated Environmental Management System.  

BTC Group also benefits in other ways from improved labour practices in their supply chain, for example, increased supplier productivity and better industrial relations – and from a reputation for fairness.

 

Companies take responsibility for their supply chain labour conditions in many different ways. That is, there are many different approaches to ethical sourcing, and while some approaches are undoubtedly more effective than others, there is no one “right way”.

Nevertheless, a company’s ethical sourcing strategy usually involves adopting a “code of practice”, that sets out minimum labour standards that they expect their suppliers to comply with. Ethical trade is still a relatively new field, and as yet there is little universally accepted “best practice” in terms of how to develop, monitor and implement a code of practice.

The ETI believes that there are a number of basic principles that underpin any effective and credible approach to ethical sourcing. These include the following:

ETI considers voluntary codes of labour practice as complementary and not an alternative to the proper enforcement of national and international labour laws, and believes that such codes should be implemented in ways that help, and not hinder, the application of law.

ETI believes that codes of labour practice should be based on internationally agreed labour standards, and that the most relevant standards are those set out in the Conventions of the International Labour Organisation (ILO). 

ETI believes that the tripartite structure of the ILO, involving both employers’ and workers’ representatives as well as governments, together with the technical expertise of this organisation in all matters relating to the world of work, make the ILO the authoritative and legitimate source of international labour standards. The ETI Base Code is based on the principles underlying key ILO Conventions.

However, ETI’s experience also underlines the importance of involving local stakeholders – their perspectives, knowledge and concerns – in the implementation of the codes.

ETI sees the adoption of a code as just a starting point. A true commitment to ethical sourcing also involves committing adequate resources, communicating the code throughout the sourcing company and the supply chain, ensuring that relevant staff have appropriate skills, monitoring your suppliers, helping suppliers make improvements, reporting on what you find in your supply chain, and supporting the verification of these findings. 

ETI believes that companies committed to ethical sourcing must require their suppliers to meet agreed standards within a reasonable timeframe, and that performance in this regard should ultimately be a pre-condition for further business. 

However, ETI recognises that the observance of some provisions in the ETI Base Code may not be immediately realisable in all cases. Some suppliers may be unable to meet all the terms within a short time or, in some cases, they may be constrained by national law. Therefore, reasonable timeframes and the existence of any constraints not controllable by the supplier may be taken into account.

Nevertheless, ETI believes that failures to observe certain standards require rapid corrective actions if the sourcing company is to continue any business relationship with the supplier concerned. These include the use of forced, bonded or involuntary prison labour, as well as physical abuse or discipline, and extreme forms of intimidation.

ETI also believes that code implementation – from the design of an ethical sourcing strategy and monitoring and verification procedures, to the agreement and implementation of corrective action plans – is strengthened by the involvement of stakeholders other than companies. Key stakeholders are those organisations who represent workers (trade union organisations), and other organisations who work to defend workers’ rights and address workers’ concerns (e.g. relevant NGOs).

 

ETI's members include organisations from the fair-trade movement.  But ethical sourcing and fair-trade are different. Ethical sourcing tries to ensure that decent minimum labour standards are met in the production of the whole range of a company's products. By contrast fair-trade is primarily concerned with the trading relationship. Fair-trade ensures that producers are paid a decent price that at least covers the true costs of production, despite often serious fluctuations in world commodity prices. 

Many consumers will always be prepared to buy special fair-trade products, while expecting that mainstream products are safely and decently produced.

For further information about ETI please visit www.ethicaltrade.org