Posted on: 2^nd May 2013

On Wednesday 1^st May, Impactt held the second event in our series of evening seminars; a lively debate and discussion on how to really engage with and move forward with ethical trade in China. After agreement that China is still a vital source of supply for many retailers and brands, the evening kicked off with a presentation by Impactt Director Rosey Hurst on the latest trends and challenges in China supply chains.

Attended by a broad range of brands, retailers, NGOs and industry bodies, the evening was an opportunity for open and frank discussion as well as a sounding board for new ideas. We had two fantastic speakers – David Halford Head of Ethical Sourcing for BBC Worldwide and our own Dionne Harrison who spent four years heading up our China team and has a wealth of knowledge on the subject.

Both speakers gave two very different but very interesting approaches on successful models for improving labour standards. David Halford gave a great insight into how BBC Worldwide run their own ethical trade programme and the key opportunities and challenges they face in their China supply base. Key messages included the importance of transparency and engaging with your suppliers.

Dionne Harrison gave a fascinating insight into the motivations, aspirations and concerns of different types of workers in China. She also spoke about the challenges faced by factories in managing an increasingly diverse workforce and retaining workers in a shrinking labour pool.

She introduced Impactt’s BBW (Benefits for Businesses and Workers) model – an innovative approach that delivers sustainable affordable training – which is being launched in China this summer. The approach helps transform factories – delivering benefits to workers through better quality jobs whilst increasing efficiency and competitiveness – enabling sites to address increasing commercial challenges.

Some great ‘take-homes’ from the night included:

• Be aware of the limitations of some audits to provide a complete picture of conditions at a site
• Create an open dialogue with suppliers to deliver transparency
• Maintain longer relationships with factories to really tackle labour challenges
• If hours are high – identify which department has highest hours and start there
• Get factories to articulate practical steps to address hours which can easily be monitored
• Ensure factories communicate changes in process to workers quickly and clearly
• Understand impact of buying practices in aggravating poor labour practices – try and give factories the best chance of preparing for your order but…
• Ensure this isn’t an alternative for helping suppliers improve their own practices
• Collaborate with agents and suppliers to bring real benefits

For more information on BBW China please contact Rosey@impacttlimited.com

If you have a topic you’d like us to discuss in a seminar, please contact Alex@impacttlimited.com

Posted on: 7th March 2013

Ahead of International Women’s Day, Impactt would like to take this opportunity to applaud and acknowledge the millions of female workers around the world who play an invisible but vital role in our lives. Whether it be by growing the food we eat, sewing the clothes we wear or assembling the laptops and mobile phones we can’t live without, their contribution is extraordinary.

Since 2006, Impactt has worked with nearly 700 production sites across the world employing more than 500,000 workers; over half of whom are women.

Our interviews with workers clearly show there has been a tremendous increase in women’s employment, income levels and sense of empowerment over the last decade. Workers have told us:

• Women working in big cities have greater awareness about gender equality and legal rights
• It’s now easier for women to access more skilled jobs, promotions and training opportunities
• Earnings have increased (although rising cost of living means managing household expenses is becoming more difficult)
• Women find it easier to raise issues/concerns at the workplace

We are particularly proud of and inspired by the following stories:

“The greatest benefit of the [child labour] remediation programme is the change in my mother’s opinion about the importance of education. She used to believe it’s enough for a girl to finish junior school and get a job. She didn’t support me to go to college. But after this programme, she sees me in a new way and has promised to help me gain a place at university!”

-       Fen Fang, Girl child worker who participated in our child labour remediation programme (China)

“When I handed over last month’s salary to my daughter, she counted it twice and told me there must be a mistake. She had never seen so much money in her life. I was proud to tell her I earned this much money in the last month!”

-       Prerna, Woman who participated in Impactt’s BBW programme (India)

“When I first started this job, I tried raising female workers’ issues to the line master but there was no action. Now I’ve taken on the role of a “buddy” and this gives me a platform to listen to other workers and help them.”

-       Rupa, Woman who participated in Impactt’s BBW programme (Bangladesh)

“I think I am a person who hopes, I don’t feel sorry for myself anymore.”

-       Jiayi, Girl child worker who participated in our child labour remediation programme (China)

But all of this has come at a price. In some cases, economic empowerment itself has caused or exacerbated other social, cultural and well-being issues for women.

The women we’ve interviewed said these are their most pressing challenges:

• Take-home wages are insufficient to meet households’ basic needs
• Domestic violence- often exacerbated by the changing power-balance between husband and wife due to the woman being financially independent
• Inadequate savings
• Lack of awareness about financial management
• Not enough time with their children due to long working hours
• Inadequate childcare facilities
• Health issues and concerns about personal safety

Many of the above challenges lie outside the scope of traditional codes of compliance and monitoring schemes and therefore receive little attention. A woman might be employed at a fully “compliant” factory and still struggle with all these problems, which incidentally affect her attendance and productivity at work.

If we are to make real and rapid progress on gender issues, it is essential to take a “change-focused” rather than “compliance-focused” approach. Let’s ask ourselves and let’s ask the women involved what would make the difference.

Here’s what our interviews with female workers reveal about their “wish list”:

• High quality child-care facilities at the workplace run by carers they trust
• Opportunities to increase their earnings (via access to promotions, bonuses & skills development)
• Training on life skills including health, financial management and communication skills
• Good quality education for their children
• Personal safety (including free, timely transport to and from work if required)

The good news is that these initiatives are relatively easy and cost-effective to implement, especially through collaboration. We’ve found investing in such projects results in direct benefits for the employer and the supply chain- in the form of regular attendance, higher productivity and increased engagement / loyalty.

Here’s our list of top 4 things companies can do to make gender a priority and ensure women’s voices are really heard:

• Ensure your “audit / assessment” brief includes questions about gender equality and women’s priorities
• Ask your suppliers whether they have any initiatives specifically directed towards women
• Develop a set of indicators related to gender (e.g. number of women employed, number of women in supervisor roles, # hours of health training delivered to women etc) and use them to track your impact
• Participate in a collaborative project which addresses women’s priorities

To find out more about Impactt’s work on gender issues or to participate in a collaborative project on financial inclusion or women’s empowerment, please contact urvi@impacttlimited.com

Posted on: 7th February 2013

Rosey Hurst, Founder and Director, Impactt 

Applause today must go to Unilever’s courageous decision to allow Oxfam unfettered access to its operations and supply chain in Vietnam.   This has resulted in a report revealing both high ideals and implementation hiccups when it comes to the quality of jobs Unilever directly provides or supports through its supply chain in Vietnam.  It also underlines the gap between policy and reality, for example the dangerous “working assumption at [Unilever]headquarters that production workers were paid well above a living wage in its own operations”, which Oxfam researchers found to be false – directly employed workers did not earn a living wage, and contract workers earned even less.  At the suppliers which Oxfam investigated, wages were found to be yet lower, with a reliance on excessive overtime to enable workers to earn enough to get by.

This is very much in tune with our own findings in supply chains around the world.  Over the past six years, Impactt has visited nearly 700 production sites in 20 countries employing almost half a million workers, primarily in China, Bangladesh, India and the UK. The data from these visits takes in the views of over 17,500 workers across sectors including apparel, electronics, toys, homewares and food, primarily for the UK market. We have also spoken to thousands of factory owners, managers and supervisors.  The bottom line is that the level of exploitation of workers remains at a high level, with wages slipping ever further behind the living wage. By our measures, exploitation has increased slightly over the past six years with people working harder, for wages which can buy them less of what they need, without the ability to bargain for more.

Workers from around the world tell a very similar story; their priorities, almost universally, are money, respect and a better life for their children, just the same as the priorities of almost everyone reading this blog.  Yet Oxfam writes, “Workers’ perspective on wages and benefits was not found to be well understood by management.”

If I was offered three wishes to change the status quo, my first would be to give employers, contractors and purchasers the ability to understand workers’ priorities and perspective and the commitment to delivering these priorities.

Unilever clearly understands the importance of people, Nick Dalton, Unilever’s VP HR Global Supply Chain says:

“People must be the source of the company’s value. Unilever must be best in class as we charge a premium for our brands, so we must invest in training and working conditions… We compete on operating efficiency, quality, specification of products and responsiveness to customer demand. All this requires an empowered and skilled workforce… All Unilever’s analysis shows that where there are good conditions and empowerment of employees, the factory has the best results.” 

But Oxfam identifies many mismatches between this ideal and the reality in Vietnam – particularly in the area of wages, workers’ number 1 priority.

My second wish would be that employers and purchasers should take another look at how to set wages, and opt for one which balances the profitability of the company with workers’ needs.  As Nick Dalton says, these need not necessarily be in conflict – there is very strong evidence that great businesses go hand-in-hand with great jobs.  But, the three dominant models for wage setting: via negotiation (near impossible in contexts without mature industrial relations); through statutory minima (often set in a highly politicised environment and unrelated to workers’ needs); and through shopping basket studies (used for calculating theoretical living wages, and almost never implemented) all somehow fail to deliver for billions of workers.

I would like to see more work on wage setting which focuses on the added value which workers bring –skills, quality, efficiency and loyalty, all of which contribute to profitability.  Our work indicates that this approach can result in a significant uplift in wages – we have achieved an average pay increase of over 20% per hour within 6 months in our work in India and Bangladesh, particularly in garment factories.

My third wish would be for companies to implement measurable targets for labour rights and job quality, together with targets on productivity and quality, in order to demonstrate once and for all the causal link between great businesses and great jobs.

If Unilever could lead the way in measuring and disclosing these, then it would be well on the way to delivering a truly people-centric business.

Well done Oxfam and Unilever for a great collaboration – I’m now looking forward to my three wishes coming true.

Blog originally posted here as part of Oxfam’s Policy and Practice Blog on 07/02/13.

Posted: 4th February 2013

On Thursday 31^st January, Impactt held our first evening seminar; marking the beginning of a whole series of debate and discussion that will take place throughout 2013. Attended by a broad range of brands, retailers, NGOs and industry bodies it was an opportunity to focus on a topic troubling many ethical trading professionals; “Risk vs Returns:  supporting real change and managing risk in supply chains”.

Impactt’s Director Rosey Hurst led a panel of two eminent speakers on the topic – David Croft (Director, Food Technology at Waitrose) and Louise Nicholls (Head of Responsible Sourcing, Marks & Spencer). Both panellists gave a fascinating insight into their own ethical trade programmes and the successes and challenges in implementing ‘returns-based projects’ broadly speaking, capacity building projects that deliver for worker and other actors in the supply chain.

Lively discussion considered the limitations of the current risk model that doesn’t address the motivations and drivers behind poor labour conditions. The debate quickly moved on to strategies for capacity building in the supply chain to address root causes of issues. Participants shared and discussed their key challenges including limited leverage, engaging the board in order to increase investment in ethical trade and of course, where to begin!

Some great thoughts from the night included:

• Recognise that audits alone can’t deliver sustainable change
• Just start somewhere!
• Don’t be afraid to get things wrong, just get stuck in
• Engage partners on the ground who are experts
• Visit your supply base regularly and speak to everyone from management to workers to really understand their problems and motivations – use this to identify the opportunities for capacity building
• Collaborate!

After a successful start, we will continue to convene some great debates throughout the year.

Posted: 20th December 2012

Read the full PDF report here: Nice work? Are workers taking the strain in the economic downturn?

Impactt has launched an update of our prevalence data of labour standards issues from 2006 – 2012.

Based on a data set of 678 production sites and 17,500 workers in the apparel, electronics, toys, homewares and food industries, our report highlights how workers continue to pay the price of the global financial crisis. The level of worker exploitation has increased over the last 6 years with people working harder, for wages which can buy them less of what they need, without the ability to bargain for more.

According to our report:

• Employers around the world report difficulty in attracting and retaining skilled workers. Average labour turnover levels are 7 – 10% in China, 12% in Bangladesh & 15% in India.
• Rather than incentivising workers to stay, many businesses are still focusing on finding ways to force workers to remain. We found forced labour practices at 33% of sites visited in 2012.
• Workers continue to have poor access to effective trade unions, with workers at 91% of sites saying that they do not have access to fully effective worker representation mechanisms.
• The percentage of sites where workers work more than 60 hours per week remains high at 85%.
• We are seeing improved compliance in paying the legal minimum wage (78% of sites paid local legal minimum wages in 2012; compared to 16% in 2006). However, the gap between workers’ actual wages and the amount needed to support a household continues to widen globally.

Our data raises four key questions for stakeholders in global value chains:

• As alternative employment opportunities appear in many economies, working in offices, service-sector jobs, in ‘clean’ electronics factories rather than in ‘dirty’ garment factories, how long will skilled workers be prepared to continue working to service the markets of the West?
• Where many of these jobs are held by migrants, will alternatives open up for these people to move up and out of manufacturing and take up jobs closer to home?
• As workers become more demanding in terms of job quality, skilled labour becomes scarcer, costs continue to rise and buyers’ technical specifications become more demanding, how can manufacturers continue to service Western brands and retailers?
• How can retailers and brands in the West maintain their access to product when new markets are opening up in Russia, across Asia and in the Middle East with buyers who are less demanding?

It is clear that no single actor can create change at the required scale alone. Our report provides recommendations for employers, brands & retailers, consumers, trade unions and governments to improve workers’ welfare & livelihoods through trade and ensure the future sustainability of our supply chains.

Posted: 20th June 2012

24th May was a very special day for Impactt. It was our first ever conference and a hugely successful attempt at convening diverse industry stakeholders to co-create the collective future of ethical trade- a future which makes a real difference for people and businesses around the world.

The 150 participants created an unmistakable buzz in the air. From retailers like Tesco and Marks & Spencer to NGOs like Oxfam and War on Want. From government departments like DFID to multi-stakeholder organisations like ETI. From factory managers in Bangladesh to global investors like CLSA. The audience was mixed and people heard voices they don’t normally hear.

The day kicked off with a moving and honest speech by Nazma Akter, an inspiring trade union leader who started working in the Bangladeshi garment industry at the age of 11. Nazma’s speech set the tone of the day. This wasn’t about getting stuck in the world of risk management. It was about challenging our own boundaries and really asking ourselves what it would take to deliver tangible changes and benefits for the poorest people in global supply chains- in a way which makes sense for business.

During the day there were nine topical workshops which we co-created with our 40+ speakers.

Some workshops were reflective and provided a space for people to think differently. Some workshops were hands-on and pragmatic. Participants identified practical ways to move beyond auditing, make progress on living wages and address child labour in formal and informal contexts.

Probably the most thought-provoking part of the day was the final panel discussion which saw 6 very different stakeholders (a brand, a supplier, an NGO, a worker representative, an investor and an international organisation) argue about the biggest actions we need to take in order to make a real difference to the lives and livelihoods of people in our supply chain.

Here are some snapshots of the conversation which really capture the essence of the day:

“Buying companies need to recognise that they have to take a wider interest in what happens throughout their supply chain if it’s going to be sustainable- if it’s going to deliver for them, product of the necessary quality, quantity and price for them to continue in their businesses.”

“We need to get away from the expectation that you can sit at one end of the supply chain and expect it to ad infinitum what it has done for the last 50 years. Because the reality is, for lots of small farmers and workers, the market isn’t working. And it needs people in that supply chain to stimulate other forms of activity, whether it’s about worker rights, agricultural investment or market access. It’s up to buying companies to think what are we going to do differently to help those farmers and communities have a more sustainable livelihood for the future.”

“I know 3 large shoe-manufacturers in China. One of them pays their workers higher wages, but it earns the same return on equity (ROE) as the other two who don’t. But in a world where labour law is tightening, the two who treat their workers less well will see their ROE go down. Investors will seek out the business which has a more sustainable return on equity because that share price will maintain and rise over time.”

It was a privilege for Impactt to host this vibrant exchange of thoughts and ideas. We were touched and inspired by the level of passion and commitment in the room to drive ethical trade forward in great leaps and bounds. And we can’t wait to do it again.