| by Rosey Hurst & Mary Arnesen, Impactt Limited SOLD
OUT! New updated publication on this subject: Taking the Temperature Executive
Summary 1. Ethical supply chain management is becoming a mainstream
business issue. Companies are being prompted to act by a variety of factors, including
media and Non-Government Organisation (NGO) campaigns, changing stakeholder expectations,
increasing awareness among companies of factory conditions, the threat of legal
action and the desire to protect their reputation. 2. Key worker
welfare issues include forced labour, freedom of association, health and safety,
child labour, wages and working hours and discrimination. Agreed standards are
beginning to emerge in most of these areas, although controversy remains, particularly
on how to deliver standards of freedom of association and a living wage. International
labour conventions and national laws govern most of these areas. However, implementation
of laws and conventions is weak in most developing countries, and there are also
abuses in the developed world. 3. Various methods are emerging as
best practice from the experiences of pioneering companies and organisations tackling
these issues. 3.1. Codes of conduct specify the company's policy
on worker welfare issues in the supply chain. They demonstrate that the company
is aware of the issues and wants to improve the situation. They can also act as
a useful tool for setting priorities. The Ethical Trading Initiative's base code
is one emerging standard. 3.2. The next step for companies is to implement
the standards enshrined in their codes of conduct across their supply chains.
There is little consensus about how this is best done. Important tools for implementation
include training, awareness raising, management systems and incentives for managers.
Even leaders in the field admit that they are only just beginning to implement
codes. 3.3. Companies are then able to monitor progress towards achieving
standards set out in codes. This can be done using internal, external or independent
resources or a combination of all three. 3.4. Trade unions and some NGOs
are insisting on external verification and public reporting of findings as an
integral part of the ethical trading process. However, little consensus exists
about what should be verified and who should do it. 3.5. The Council on
Economic Priorities Accreditation Agency (CEPAA) has launched SA 8000, an ethical
trading certification scheme. 3.6. Some companies approach improving working
conditions on a project-by-project basis, instead of, or as well as, attempting
to implement a code of conduct across all supply chains. 3.7. A number of
cross sector partnerships between groups of companies, NGOs and trade unions have
emerged. These aim to develop a consensus on how to approach improving workplace
conditions and deliver improvements which are sustainable. 4.
There is a general perception amongst organisations and companies in the developed
world that the ethical trading debate is gathering momentum. Stakeholder pressure
is mounting and more companies are feeling the need to have workable policies,
despite the difficulties. However, at the moment it is mainly large companies,
particularly in the retail sector, which are acting. For critical mass to be reached,
small and medium sized companies also need to act. It is clear that companies
cannot solve the problem single-handed. There is a need for governments, international
bodies and others to become involved to make real change.
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