Smarter ethical trade that delivers more for all

What has been the biggest impact of ethical trade on lives & livelihoods across the world?

What more can we do to create a bigger difference?

We at Impactt are very excited to host our first ever conference on 24^th May 2012. This is going to be an inspiring day where brands, retailers, suppliers, NGOs, academics, trade unions and workers can connect and co-create a promising future for ethical trade.

The day will have an intensely practical flavour so that participants can leave with real insights and tools to help them address the top issues of the day. We have over 10 action-focused workshops on topics including (but not limited to):

• Living wages
• Sustainable factory improvements
• Beyond auditing
• Getting buy-in from internal & external stakeholders
• Improvements beyond the first tier
• Child labour remediation
• Sumangali
• Ethical branding & communication

Confirmed speakers include Marks & Spencer, Waitrose, Walmart, BBC Worldwide, Monsoon, C&A, Department for International Development, Better Work ILO / IFC, Ethical Trading Initiative, Fair Wear Foundation, Partner Africa, Awaj Foundation and many more.

Brands, suppliers, investors, NGOs, multi-stakeholder initiatives and worker representatives will share a platform to discuss the future of ethical trade and how organisations can add social and economic value across global supply chains. Come and join the debate.

Click here to see the full programme and to register.

Early bird discount available until 1^st April 2012

On Thursday 15^th December, Impactt celebrated 15 years in ethical trade with over 130 friends at the House of Lords. Hosted by Lord Young of Norwood Green, the night was an opportunity for everyone to share their hopes, frustrations and vision for the next stage of ethical trade while celebrating the achievements of the past 15 years.

In Rosey’s key note speech, we heard how ethical trade is at a crossroads. The current methodologies and approaches aren’t giving us the change we need to make a meaningful impact on millions of workers throughout the world. But, the evening wasn’t doom and gloom and her message for change was clear. An inspiring video developed by the Impactt UK team gave us all a real glimpse of what change means. Businesses, NGOs and academics watched as workers and factory managers told their stories of how an inclusive model of ethical trade has made a real difference to their lives.

The evening launched a brand new report developed by Impactt. It shares our latest statistics on job quality and offers insightful case studies on making an impact from around the world as well as stakeholder recommendations for leading a successful ethical trade agenda.

It was fantastic to see such a buzz in the room as  people from all parts of the sector discussed exactly what we can do to deliver real change and how we can tackle the challenges the sector is facing.  The evening gave all a reminder of why we are here, and why we should keep on pushing even harder to develop an ethical trade that works for all.

The company’s initial reaction was to ask employees to sign letters promising not to harm themselves and to string up nets between buildings to catch jumping workers.  Both these measures are attempts to tackle the immediate problem, without investigating why people are jumping.  (The letters have since been withdrawn, as management realized that blanket assurances given under pressure rather missed the point.)  In a more proactive bid to cheer workers up, the company has sent in the clowns – in the form of  2,000 singers, dancers, and gym trainers for rest days, as well as recruiting psychiatrists and setting up help-lines.  Will this be enough to stem the tide of suicide?  Or is more wholesale change needed?

How does the Foxconn suicide rate compare with the national average?

Longhua is a gargantuan facility where 400,000 workers are fed and housed in a three-square-kilometer factory area.   10 suicides, or 2.5 per 100,000, is well below the national average of between 13 and 14.8 per 100,000 people (World Health Organization). However, the Foxconn workers are from a very specific demographic – migrants from rural areas in their early twenties and late teens.  Looking at WHO’s China suicide rates by age (although these are now 10 years out of date), the Foxconn figures are much closer to the national average, at around 3.5 per 100,000.  Interestingly, by far the highest suicide rates in China are of elderly people – the young in China are ten times less likely to kill themselves than the old.

So what then is driving the youthful workers of Foxconn to commit suicide at around the national average level for their age group?  On the face of it, they are far luckier than the vast majority of their contemporaries.  They have escaped rural poverty, they have good jobs, which offer the full protection of China’s labour laws.  They have better prospects than the vast majority of their peers and now they have an army of singers, dancers and gym trainers to keep them occupied.

Broken Dreams

A possible answer is suggested in an undercover report for Southern Weekend (translated from engadget).  A reporter, Liu Zhiyi, spent 28 days working Longhua.  He diagnosed the key problem as the bitter disappointment of young migrants as they face up to the reality that the streets of Shenzhen are not paved with gold.   Most workers come to the big city with the dream of working hard and saving enough money to start their own businesses.  They certainly find hard work –  repetitive, high-pressure jobs, with shifts starting at 4am,  but all too often they are unable to fulfil their earning aspirations.  At Foxconn, workers can earn around £90 per month for standard time.  Only with overtime can workers boost their income to around £200 per month. getting them much nearer to the earnings level they need to save and start a business.  At a factory like Foxconn, where overtime is well controlled, there are not many overtime hours to go round and so not many workers are able to meet their personal earnings aspirations.  Ironically, the more compliant the factory to China labour law and purchasers’ codes of conduct, the less the factory is able to meet workers’ earning needs.

Added to this disappointment is the sense of alienation felt by young people, a long way from home, with little chance to socialize.  Blogger Cressence argues that money is no longer the only priority for migrant Chinese – they also want a social life, which can be difficult in the factory environment.

How can a responsible factory try to overcome these problems?  We at Impactt believe that the Foxconn suicides could be a rallying call for a new approach to managing workers in China.  For too long, Chinese factories have tended to view labour as a commodity, to be kept in line through military discipline, and incentivised to work harder and longer rather than smarter and more creatively.  Workers are rewarded for the time they spend at work, rather than for the quality of their input.  It is time perhaps for factories supplying the electronics industry to borrow the management practices of some of their customers – companies like Apple and Dell have long understood the productivity and quality improvements derived from treating their people like people.  We hope that the industry will see the opportunity to transfer this knowledge, to enable Chinese factories to make the most of their human capital and to enable workers to reach their potential, rather than being cannon fodder for the production lines.

Foxconn has started by sending in the clowns (or rather singers, dancers and gym trainers) – this is an important step in acknowledging that workers are more than productive units.  We hope that Foxconn will take the time to listen to its workers and identify how the company can best meet their needs and aspirations, to stem this terrible tide, and to point to a more productive future.

This report was based on a range of evidence, collected from workers (working in the meat processing industry and in other sectors), supermarkets, meat and poultry processing firms, work agencies, unions, industry representative bodies, regulators and government departments.

The report cemented the figures from Unite’s campaign against some supermarkets in 2009.   Migrant- agency workers represent 30% overall of employees in this industry (out of agency staff working in the industry 70% are migrant workers). The report notes significant discontent amongst agency workers.   Of the 260 workers who gave evidence to the inquiry 8 out of 10 workers claimed to be treated differently to permanent staff, this included poorer pay, allocation of the least desirable jobs, and being treated like ‘second-class citizens’ in the workplace.

The problems that agency workers face is a dedicated chapter in this report, there are too many issues to mention in this blog alone, although all issues that workers face breach minimum ethical trading standards and basic human rights.  Worryingly, many workers had little knowledge of their rights and feared raising concerns would lead to dismissal:

• The staff also reported being refused toilet breaks and so having to urinate while on the production line.
• 1 in 7 of agency workers paid to find employment
• There was evidence that some women had been instantly dismissed when they became pregnant
• One fifth of workers reported being pushed, kicked or having things thrown at them by line managers, one third had experienced or witnessed verbal abuse.

Only 4 out of 260 workers preferred agency work to direct employment: Some workers felt that permanent contracts were awarded on the basis on nepotism or nationality.

This report also explores the conditions that have led to the industry being so racially divided: one noticeable reason being that the working conditions are so unpleasant and strenuous, that meat processing companies don’t have British workers applying to vacancies anyway.  The report has added fuel to the flames for both left and right wing activists.  Impactt would like to note that the high proportion of migrant and agency workers in this sector confirms the presence of poor labour standards.  This racially motivated political debate is centered on a symptom and not the root problem- the papers are missing the point. Poor labour standards should be the focus, not the race of the workers.

Impactt thinks that more focus should have been placed on the impact of the Agency Workers Directive (AWD 2011).  The AWD is addressed briefly in this report, but it may have been interesting to hear opinions from processing firms and agents about whether they have plans to accommodate this major change in labour law.

Impactt agrees that the primary source of demand, the supermarkets, should push harder for improvements in the industry, their auditing process should be more holistic. Impactt notes that the report misses a trick by not emphasizing enough the role that auditors have in improving standards.  The majority of auditing processes are mechanized, tick-box factory tours, with no scope in getting to the crux of the issue. Auditors should focus to a greater extent on off-site workers interviews to understand issues relevant to the site.

Impactt agrees that agencies such as the Gangmasters’ Licensing Authority (GLA) are instrumental in investigating agency labour rights; this authority however is  understaffed, despite two thirds of agencies agreeing that the GLA has improved standards by preventing unscrupulous agencies from operating.

Last year, Impactt was commissioned by the Asian Development Bank to co-ordinate a study into the impact of the global economic slowdown on value chain labour markets in Asia. Impactt worked with partners in ADB, ILO, and GTZ as well as local research partners in People’s Republic of China, Indonesia, Thailand and Vietnam to research the impacts of the downturn. The work culminated in a paper presented by our very own Rosey Hurst at the Asia-wide Regional High-level Meeting on the Impact of the Global Economic Slowdown on Poverty and Sustainable Development in Asia and the Pacific.

In the paper we found that of all the sectors studied: “the Vietnamese footwear industry has been hardest hit in terms of fall in demand, job losses and reduction in working hours…[and] Across all sectors temporary and migrant workers are the most vulnerable to retrenchment and changes in their wages and working hours.”

ADB has now announced the launching of anew Asia-Pacific Poverty Network Website (AsiaPovNet),  which they state is: “a knowledge hub on poverty reduction and inclusive growth in the region. It is a database on research and operational work of distinguished regional and national think tank institutions, governments, and multi- and bilateral development organizations.”

The first edition of the Asia-Pacific newsletter on poverty reduction and inclusive growth (AsiaPovNews) features Impactt’s paper together with other papers presented at the conference.

We are very proud to have been involved in these high level discussions on the policy implications of the downturn and are looking forward to seeing how Asian governments will respond to the lessons of the downturn.

Human Rights Watch released in Dubai last week its annual World Human Rights Report 2010, which along with 3 other countries, includes a chapter on the state of human rights in the United Arab Emirates.

The chapter covers a range of human rights issues, including press freedom, human trafficking, the rights of detained persons and torture. On labour issues, HRW claims that the economic crisis has had a negative effect upon the conditions for workers and criticises local companies for sending staff on ‘unpaid vacations’ when the downturn slowed, or in many cases brought to a halt, construction.

The chapter goes on to echo many of the criticisms made by HRW in their Tears on the Island of Happiness Report, released in May 2009, including:

• Visa sponsorship regulations restricting movement of workers.
• Lack of legal provision to protect workers right to strike and bargain collectively.
• Recruitment agencies frequently charging workers fees to get their job and the lack of a legal framework to criminally try those who engage in this practice.
• The presence of legal provisions which punish workers for going on strike.

The response to the report by the Government of the UAE has largely been one of dismay and criticism – it is said the report is not only “unbalanced” but also “factually incorrect”. A spokesperson from the Ministry of Foreign Affairs said that the report “…fails to adequately record the positive steps taken by the UAE with regard to labour and human trafficking issues not just in 2009, also in the last few years”.

The main initiatives which the Government claims HRW have ignored in their report are: the ratification of the UN protocols on Disabled Persons and Human Trafficking, the creation of three new Government human rights related institutions (the Human Rights Department (Ministry of Interior) Dubai Community Development Authority and a permanent taskforce of specialists to tackle human trafficking in Dubai) and the opening of a shelter for women and children in Abu Dhabi.

HRW does recognise that new legal standards on worker accommodation have been introduced, but Impactt note that there is no mention of the Wage Protection Scheme introduced last year, where workers are paid into bank accounts rather than directly in cash by their employers. While the scheme is still being rolled out, and has not been without its problems, it will ultimately deliver results for workers and should be acknowledged.

While there is no doubt that there remains plenty of work to be done for migrant workers in the UAE, to your average reader the chapter could come across as one-sided and HRW potentially weakens its position by not recognising the high profile initiatives underway.

Furthermore, HRW sadly provides little transparency on when or how the information in the report was collected. It puts itself at risk of sounding like it is rehashing old information, rather than using up to date and evidence.

Despite these weaknesses Impactt welcomes HRW’s ongoing reporting of the issues in the UAE. The organisation rightly reports that no country has a perfect human rights record and that the purpose of the report is to highlight ongoing issues to Governments and compel them to action – something Impactt is always supportive of!

When New Look and Impactt started working with Echo, one of New Look’s key garment suppliers, in 2006, the level of labour standards there were, what we could qualify as normal for a traditional Bangladeshi garment factory: wages were low and far from representing a living wage (workers earned an average of £20 per month); hours were high (more than 70 a week). On top of that, management systems were under-developed, efficiency and productivity were low and management was unsure of how to value labour as a benefit.

3 years on, Echo has achieved great results! Management has worked really hard to realign business incentives so it can deliver great quality products at a competitive price and at the same time provide great jobs for workers. The key to the success of this project over and above supplier engagement/vision coupled with New Look’s support was to understand how to motivate workers, identify bottlenecks in the production systems and more importantly create a sense of collective achievement, one that would benefit workers, factory management, as well as the retailer. For the first time in Impactt’s history, workers had barely any complaints!

Key achievements include:

• Maintaining working hours within legal requirements – hours are down to 48 hours a week and no worker has worked more than 10 hours a day since January 2009.
• Paying better wages – the lowest paid now earn 22% more money for far fewer hours than they were working before.
• A workers’ committee has been set up and workers can raise their issues directly with their representatives.
• Providing workers with a free meal every day. Malnutrition in Bangladesh is unfortunately very common – with anaemia a particular issue, especially for women. We were glad to hear that 74% of the workforce had gained weight after working one year at the factory!

New Look’s support has been crucial, extending payment terms and paying a little extra to support the free lunches.  The factory management’s and supplier’s commitment to rolling out the initiative has also been fantastic.

We are now busy extending this methodology to other factories and we will surely update you very soon!

The conference was split into two main sessions. During the first one, key speakers from the WTO China and the Chinese ministry of human resources and social security gave their views on the latest happenings in the CSR arena in China. They reinforced the message that CSR was very much in line with the Chinese idea of building a “harmonious society”. The presentations focused on how Chinese business often uses philanthropy as CSR, on the challenges faced by Chinese factories and on government efforts to push forward the CSR agenda and enforce labour & environmental legislation.

During the second session, the attendees were split into two groups. In our group, 4 companies shared their CSR programme with the attendees. Impactt was particularly interested in the Tchibo model. Tchibo supports 40 factories across China, Thailand and Bangladesh. They work on strengthening their human resources systems and improving productivity by training key factory staff. Their programme showed some very interesting results with increase in workers’ wages and reduction in working hours.

It is really good to see that the increase in numbers of companies working in this way -  We have been taking this approach in China  and elsewhere since 2001, and will shortly be publishing the key lessons we have learned in how to make sure that productivity and HR initiatives provide real benefits to workers.  Watch this space!

In this case, the workers were contracted through a labour agency in their home country. Supposedly regulated by the government, the agent took advantage of the vulnerability of the workers and demanded fees which flouted legal regulations. Workers, lured by the lucrative prospect of “winning their chance to go to Europe” and improve the standard of living of their families sold assets and borrowed money to pay the enormous fees.

Of course the reality is often different to what they are told (or sold) by agents: wages are lower, working hours are higher. They end up having to stay in their overseas job for a longer period of time to recoup the money they invested and hopefully make a bit of money to support their families. The factory who hired those workers in Europe was shocked to hear their stories.

These issues are of course complex and go from the unenforced regulations of the local government to crooked agents trading in people’s dreams for way out of poverty. Impactt has been working closely on this case with brands involved, the factories and of course the workers to find a sustainable solution for all.

Keen to raise his workers health and safety risk awareness and provide them with the tools to manage and reduce risk on a daily basis, manager Wayne Terry engaged Impactt to deliver training to his workers at Readymix Gulf as a part of the company’s Safety Month.

As site manager of the Sharjah and Ajman sites, lesser known Emirates of the UAE, Mr Terry has seen firsthand that his workers, who originate from southern India, Pakistan, Bangladesh and Sri Lanka, have little consciousness of the potential health and safety risks they encounter in their work each day and are thus frequently putting themselves at risk of injury.

Workers at Readymix Gulf largely work either as drivers (of trucks delivering the cement) or in the workshop (fixing the trucks). The nature of these jobs is such that workers are engaged in a multitude of different processes both on and off site on a daily basis.

An effective health and safety management system is clearly important in this situation as it enables for the promotion of a safe working environment and the facility monitoring it. However, in addition to this, a level of personal awareness and responsibility is critical for identifying and reducing risk in what is a complex and frequently changing environment.

To meet this need, in consultation with management and supervisors, Impactt developed a bespoke training programme which was delivered in Hindi and covered:

• Why care about health and safety?
• What are the health and safety H&S risks on concrete processing plants?
• Basic health and safety on site
• Build Safe UAE and how workers can contribute
• The view from workers
• Chemicals on site and how to use them safely
• Safety for drivers

Visits to site prior to the training session were important for collecting information on, and photos of, how workers were working so that the group exercises and presentations presented situations that the workers themselves had experienced. Each of the sessions involved exercises where workers worked in group to assess a situation, identify the issues, and discuss strategies for addressing them.

Using these kinds of participatory methods for training is very effective, particularly when dealing with semi-literate audiences. Plus they mark a good change from presentation heavy sessions and can be quite enjoyable – the workers had a great deal of fun working in teams to act out the animated safety stories developed by Build Safe UAE!

Finally throughout the sessions, and particularly in ‘The View from Workers’, we worked hard to facilitate workers to talk about their own view of health and safety and what needed to happen to manage the risks on site. In our experience workers have frequently thought before about their health on site and have some of the best suggestions for tackling safety issues.

Workers reported that they will “think about a safe exit before start of work in case of an emergency” and “review an area for risks before starting work and take steps to reduce them”, which indicates an encouraging level of risk awareness. Mr Terry reported following the training that “all the workers were very happy and satisfied with the course which has had a positive impact on site”.

If you are interested in finding out more about Impactt’s training services in the UAE and other Gulf countries please contact jaana@impacttlimited.com.

Improving labour standards can be a challenging road – the pace of change is frustrating and the magnitude of the problems sometimes overwhelming. However, there are winning situations that remind us why we do what we do.

Successful child labour remediation is one of those and we would like to share with you the story of a child found by Impactt in a Chinese garment factory in September 2008. Fifteen when we found her, Xiao Mei had migrated from her home town for work and used a fake ID card to enter the factory. With the support of the UK based company and brand buying from the factory, Impactt was able to transition Xiao Mei back into school and she has recently completed a study programme in computer advertising design.

Below is the text of a letter Xiao Mei asked us to pass on to the companies who funded her remediation. We are sure you will agree that this makes it all worthwhile.

“Before, when I was in the factory, I did the same repetitive work every day. I worked like that every day for more than ten hours, and it was a tiring life that I had then. I had my own dreams. Every now and then I would remember them and it would make me so sad.

I was afraid that my whole life would be like that. Sometimes it made me want to cry, my dreams just pushed aside like that. I forced myself to do so much work every day. I’ll even venture that I worked harder than everyone else, sitting from morning until night-time, so tired I felt like I couldn’t stand. I wanted to earn a lot of money so that I could realize my dream – a good life for my family.

Who would have known that this day would come so suddenly and so fast? So fast I could hardly believe it was real. I left the factory and came to school, and my dreams stayed alive…I think I am a person who hopes, who doesn’t feel sorry for myself anymore. I believe this is the truth!

For me, the evidence is right there, that even though this world is harsh and calculating, there is still a little love left in it. I would rather choose to believe that life is filled with hope. At school I made myself work hard, so that someday I can take care of my family.

Everyone yearns for their dreams, and I won’t give mine up easily either. Opportunities to study, like I’ve had, don’t come easily, and that makes me treasure it even more, and focus on enriching my life with my studies. The world is improving, and I’m improving. My programme of study was advertising design, and I hope that through this, I can one day be accomplished, hardworking and grounded enough to achieve my dreams. I will never forget the people who have helped me. There is only one thing I can say to you: Thank you. I have come to know the world in a new way. I will work hard! Wish me luck!”

These stories are not new and whilst nationalities and specific cases of exploitation change, the hotel industry is yet another sector where migrant workers are often isolated, unaware of their rights and lack English language skills.  This can make them easy victims for exploitation. The Newsnight story follows a flurry of reports this year relating to the mistreatment of migrant workers in the UK garment, meat and fruit industries.

Impactt have often found that labour standard issues tend to be more prevalent at sites using agency, temporary and migrant labour.  These issues are complex and cannot be reduced to a matter of blame; sustainable improvement relies on cooperation from all involved.  As a result, Impactt specialises in engaging with workers and acting as an avenue through which practicable improvements for workers can be developed with buy-in from both sites management and customers.   

Employers come up with a range of excuses for retaining passports. We’ve heard ‘just keeping them safe’, ‘workers don’t understand the value of their passport’ and ‘it’s to stop them from running off with company property’.  But the fact of the matter is, as numerous employers admit privately, retaining passports is a very effective way of retaining labour. Employers have laid out large sums for transport, agency fees and training, and are not keen to let this investment go too easily.  Under pressure from auditors, customers and campaigners, many employers have come up with a system which claims to allow workers to retrieve their passport within half an hour. It is not clear whether this really works in practice when someone wants to leave their job.

But, under UAE Federal law, retaining passports, even if they can be easily retrieved, is illegal. The decree (see above picture in Arabic) issued by the Ministry of Interior on 25^th December 2002 and states:  

“As the passport is a personal document that and as the law obliges its owner to keep and show when required by the governmental authorities, it is not allowed for any party to detain the passport except by the official parties with a judicial order and according to the law. Consequently it will be considered as an illegal action to detain the passport in UAE except by the governmental parties. So please announce this to all of your parties. In case of retaining passports there will be a suitable punishment by the law of UAE”.

This seems pretty clear to me.

But, there are no examples or reports of the Ministry of Labour enforcing the decree. In fact, some companies report that the first thing the Ministry’s labour inspectors ask for when they visit a site or factory is the original passport of every worker present!

To confuse matters further, the regulations in some of the free zones (e.g. Saif Zone) require employers to retain migrant workers’ passports – a clear conflict with Federal law.  

Our view is that retaining a worker’s passport amounts to bonded labour. Companies, employers and governments need to act to end this practice.

• Employers must find ways to retain their workforce through more positive measures. These include managing workers’ expectations in source countries so that they have a clear idea of their terms and conditions and the environment they will be living and working in, and ensuring that workers are able to raise and resolve concerns and grievances on an ongoing basis.
• Employers should give workers access to an individual safety deposit boxes in which to store their passport. Workers should hold the key at all times.
• Companies sourcing from UAE should exercise zero tolerance on this issue, and should not allow employers to operate a ‘documents returned within 30 minutes’ policy.
• The Ministry of Labour should publicise the 2002 decree and start enforcing it.
• The government should bring free zone regulations in line with Federal Law.

We are pleased to hear that the Gangmaster Licensing laws will be extended to the construction industry as part of a government inquiry into the number of deaths in the construction industry.

Yvette Cooper the Work and Pensions Secretary will release a report: ‘One Death too Many’ which summarises the findings of the government inquiry. The report recommends:

• The gangmaster licensing laws be extended to the construction industry;
• The appointment of a fulltime minister of construction;
• Measures to make it easier to prosecute directors of construction projects with poor health and safety standards.

Following the release of the report the government will consult with building firms and unions before responding later this year.

The TUC have long campaigned on health and safety standards in the Construction industry, by their estimates, 2,800 people have been killed in the last 25 years on construction sites or as a result of construction activities. In 2009 the equivalent of one construction worker has died every week.

Campaigners blame the poor health and safety standards in the industry on casualisation of the industry and the illegal gangmasters who are supplying unskilled labour to construction companies to carry-out skilled and dangerous work. The report endorses this view stating that unions can play an important and positive role in driving up health and safety standards in the industry.

While we welcome this announcement, from our own work we know that the Gangmaster’s Licensing Authority is already stretched, if its remit were extended to enforcing standards in the construction industry, the government must ensure that it is adequately resourced.

An exploratory study published last week by the Joseph Rowntree Foundation states that about one in four people in Britain are living below the minimum income standard and this is increasing as unemployment rises.  The Minimum Income Standard (MIS) for Britain is based on the public’s perception of what is deemed to be a “socially acceptable” standard of living.

 According to the latest research a single adult now needs £13,900 a year before tax, and a couple with two children requires a minimum of £27,600 to ensure a livable annual budget.  This is up £500 on the previous year.  You can check your own income against the MIS with their nifty Minimum Income Calculator.

The MIS study demonstrates that a vigorous public and political debate about what constitutes an acceptable level of minimum income is as important as ever.  Furthermore this research can perhaps speak to a wider, international debate on the living wage.

It is widely accepted that it is unethical practice to employ someone but pay them less than they need to live on; and the MIS study helps British society keep sight of what constitutes an acceptable minimum level of income.   The MIS study shows that members of the UK public continue to believe that a minimum standard of living should allow people in Britain not just to survive, but to have “what you need to in order to have the opportunities and choice necessary to participate in society”. 

Across the developing world however and in the production lines of international supply chains millions are being paid wages that are inadequate for a worker to support themselves and their family.  For instance the living wage debate has been argued heatedly in Cambodia where the legal minimum wage in Cambodia is $45 but a living wage has been argued to be closer to $93.   Minimum wages in the global south remain fixed whilst the cost of living increases.

The question remains: how can a living wage be defined and how can a living wage be calculated? 

How a living wage might be defined and quantified has been long debated by many and dismissed by some as too complex an issue.  However the MIS study demonstrates that research in this area can draw valid and meaningful conclusions on what constitutes a locally acceptable level of minimum income. 

As for whose responsibility is it to provide a living wage?  If companies were to bear the true cost of living for all their staff would we then see business success come hand in hand with a company’s ability to increase the sum of its human potential?

As the financial crisis deepens, it raises serious questions regarding the people at the bottom of supply chains who have to cater to the growing global demand for cheaper products. How does the crisis affect them? And who exactly does it affect? Will children be hit the hardest?

A new report by the ILO states that the crisis could push an increasing number of children, particularly girls into child labour. Over the past 3 years, Impactt has found 615 children working in factories around the world, ranging in age from 9 to just short of 16.

Last year we found 21 children at a garment factory in China, most of whom were girls. They had enrolled in a ‘private school’ to learn sewing skills. The school acts as an agent for the factory and routinely takes children there for work.

Their working conditions were appalling. On average, they worked 80-90 hours per week including night time work. They did not have medical checks, health & safety training or even the necessary PPE (personal protective equipment). Their supervisors shouted at them if they made mistakes or worked too slowly. They did not earn minimum wages in standard time and did not get any overtime premiums.

Impactt liaised with the brand, supplier and factory to try and remediate these children in line with the Child Labour Operational Procedures. The aim was to get them out of work and into fully sponsored education while also paying their wages until they reached legal working age. However, in most cases, their parents refused to cooperate because they had doubts about the programme or had been threatened by the factory. In fact, one of the teachers from the sewing school had visited the childrens’ families and warned them against the remediation programme.

In the end, we were able to remediate 1 child. She is now studying computer advertising design at a technical school. Her teachers report she is a diligent student and is making good progress. She lives in the school dormitory and has many friends. At the end of her course, she would like to take up a job in the field of advertising design.

The unfortunate reality is that many brands and retailers probably have child workers at some level in their supply chain. Clean audit reports may inspire confidence that the problem is diminishing, but maybe this just means we need to dig deeper.

And the problem could get worse. As families struggle to make ends meet, there is a great incentive to send children to work. As factories struggle to find cheaper labour, there is a greater incentive to hire children.

What role will brands play in addressing this problem?

Blood, Sweat and Takeaways often felt like a programme with two stories: one which focussed on how the British visitors were able to relate to the native workers: make friends, empathise and build respect; and another which focussed on their reaction against the unfamiliar living and working conditions: disgust, shock, physical revulsion.  Seeing the latter was not pleasant, where peoples’ daily lived reality is reduced to a device for shock factor TV.  However it is perhaps these raw reactions that bring home the vast inequalities to be found in the history of a tin of tuna.

Watching the Brits work and live with the workers allowed the programme to explore some of the impacts that the food supply chain has on people’s lives.  From the positives: a regular source of income, funding for children’s education, to the negatives: the splitting of families, poor living conditions and low wages.  Stacey’s view that ‘no-one should have to make such huge sacrifices for Western benefit’ collides head-on with James’ recognition that ‘if we didn’t have the 140,000 chickens coming through a day we wouldn’t be employing those 5000 people… wouldn’t have jobs, wouldn’t be able support a family…’ 

Clearly there are no easy answers; however at Impactt we believe that where the actions of retailers/brands directly impact on the lives and communities of workers/growers in developing countries there is both a great deal of responsibility but also potential for effecting positive change.  To this end Impactt is working towards enabling buyers to make ‘pro-development’ decisions.

Throughout the series the Brits’ realised that by virtue of the opportunities they had access to during their lives they have a myriad of choices unavailable to the workers they encountered.  In the Western context we are perhaps spoilt for choice but with an awareness of the broad-reaching power of our purchasing decisions we can also be empowered by it.   We watch as Josh takes on new shopping choices with gusto; he dips into a strangers shopping basket pulling out a banana like a game show host and asks: ‘are these Fairtrade bananas?’  The final episode attracted 546,000 viewers, 1/3 of which were between 16 and 34 years old, the fact that these issues captured the interest of a young demographic is exciting and begs the question, what next?  May this be a first step for responsible purchasing decisions; from consumers all the way up to the brands.

Network Clothing is one of the leading manufacturers of handmade crochet and knitwear garments. Since 1994, the company has supplied leading UK and international retailers. Network Clothing has a network of around 3,000 home workers within its supply chain, around 1,000 of whom are active at any given time. Most of the home workers are based in and around Shantou, Guangdong.

Brands and retailers are increasingly demanding greater visibility over homeworking within global supply chains.    Network Clothing identified the need to gain a better understanding of the role that homeworkers play within its supply chain to mitigate any associated risk to the business.   

Network Clothing commissioned Impactt to:

• Map its supply chain in Shantou and track how product is moved from factory to home worker.
• Understand who is working in their supply chains and under what conditions.
• Gauge the impact of homeworking on the workers’ lives, families and communities.
• Identify existing problems and areas that could be improved.
• Understand and develop any necessary control measures to protect home workers.

Impactt mapped Network Clothing’s supply chain and identified two communities of homeworkers who were significantly affected by Network Clothing’s operations.  In-depth community assessments were conducted to understand homeworkers’ situation and socio-economic circumstances. Particular focus was applied to:

• Establishing their level of take-home pay and what this can procure.
• Identifying the benefits which this work brings them and their families.
• Understanding what other options are open to these workers and why they choose this work.
• Understanding the concerns they have about the work.

The community assessments utilised a participatory worker-centred approach to provide a real insight into the situation of the homeworkers. The outputs from this research helped Network Clothing begin to make meaningful improvements in the working conditions and the socio-economic situation of homeworkers.

Whilst issues exist in this supply chain, it was clear that homework provides significant benefit to workers, in particular where workers have few other options to earn money.  In many cases, crocheting skills have been passed from generation to generation and provide valuable income to families and communities which may otherwise be solely reliant on agriculture or remittances.   Workers spoke positively about their work and the benefits it brings.

Entitled ‘The Island of Happiness: Exploitation of migrant workers on Saadiyat Island’,  the report comes just seven weeks after Panorama’ ‘Slumdogs and Millionaires’, an hour long expose of working conditions on Dubai’s construction sites generating huge international media coverage.

Currently a mangrove swamp, the increasingly ironically named ‘The Island of Happiness’ is a high profile, multipurpose development which, once completed, will be home to, amongst other things, the Guggenheim and Louvre museums, a campus of New York University, 2 golf courses, private residences, a marina, and 29 hotels.

2,000 workers are said to be on site so far, preparing the island for development, with the numbers increasing significantly through the rest of 2009. At its peak the island will have 40,000 workers.

The key criticisms levied in the report are:

• Workers were required to pay fees to agencies to get their jobs, despite this being outlawed in the UAE
• Passports retained and no opportunity to transfer jobs as a result of visa restrictions
• Low take home pay (said to be significantly lower than workers were promised by agents before they left their home countries)
• No facilities for organising collectively and limited access to legal facilities for remediating issues

The report also sets out recommendations for the Tourism Development Investment Company (TDIC – the developer responsible for Saadiyat Island which is owned by the Abu Dhabi government), the other organisations involved including the Guggenheim Foundation and NYU University, the contractors in the project and the government of the UAE.

The government has cricised the report, saying that it “lacked credibility, substance and transparency and failed to recognise the government’s consistent efforts to improve the rights and conditions of all those working in the country”. “The UAE is particularly surprised and disappointed by HRW’s attempts to sensationalise the drawbacks in the country’s labour policies into media sound bites, without consideration of the rapid strides that have been made over the past few years and that are well underway here as part of the UAE government agenda,” he told WAM. TDIC issued a statement yesterday saying that  “the report not only neglects ‘s policies, procedures and actions related to worker welfare, but also makes misleading assertions and false assumptions due to HRW’s questionable methodology and flawed research”.

This is a familiar stand-off between the campaigners and the employers.  In our experience, on the one hand, allegations are rarely completely unfounded, but on the other, campaigners fail to take into account the complexity of delivering good labour standards in complex supply chains.  We generally find that the truth lies somewhere in between.  Key areas of difficulty tend to include:

• Policies and procedures in place at the top level but the nature of the supply chain and subcontracting means that workers do not experience the benefits in their day to day working lives
• Companies’ internal compliance teams are sometimes not sufficiently resourced and/or trained and are are unable  to get to the bottom of the issues
• Worker interviews are sometimes not placed at the heart of internal auditing methodologies, and thus the findings of any investigation are limited
• Workers are scared of speaking to internal auditors, as they perceive them to be representatives of management, and they fear that they will lose their jobs if they are honest about their working conditions.  They often speak more freely to journalists or researchers.

TDIC and the other companies involved have the opportunity to look very hard at their own processes and to make sure they have a good understanding of the experiences of workers, now when the workforce is at only 5% of its eventual strength.  As the workforce swells, the issues will become more complex and the opportunities for problems will multiply.  We urge TDIC to work with its critics to demonstrate a real commitment to making the Island of Happiness a reality for all involved.

On day one, we see a video of the experiences of one migrant worker forced to return from Shenzhen to her parents’ farm in her village, following a huge drop in the monthly wages she can now earn.  She reports that where she could formerly earn up to 2,500 yuan per month, she is now only able to earn 800 yuan per month, barely enough for her to buy food.  She is facing a similar story to the estimated 140 million migrant workers across China, and is now forced to turn her back on the bright lights of the city to return to a place where she says “there’s still nothing much to do…just watch TV or help with chores.”

The series promises to provide an interesting insight into the challenges facing China and her citizens in the current economic climate.  We will watch it with interest.

Starting on Tuesday 19^th May 2009, Blood Sweat and Takeaways will examine the working conditions in the food industry in South East Asia. Six British fast food fanatics will live and work alongside workers catching, harvesting and processing food products such as tuna and prawns in Indonesia and rice and chicken in Thailand. The TV programme will examine the human cost of the food industry.

The first programme looks at Indonesia’s tuna industry in Bitung on the island of Sulawesi. In the UK, we consume over a billion tins of tuna each year and Bitung’s canneries supply many British supermarkets and food service companies.  The participants live with tuna workers in basic communities, endure 90-degree heat in the canneries and struggle with the harsh realities of life on a traditional wooden tuna boat in the western Pacific.

Watch a clip of the fast food fanatics visiting a Tuna factory here

We are excited to see that the BBC is exploring working conditions in the food industry as a follow-up to last year’s series. The title suggests that the focus of the programmes will not be solely on supermarkets, but that it will also target the food service industry.  This is an unusual approach as the British supermarkets are usually the target of these types of expose. The issues of course are widespread in the food industry and are not only located in the supply chains of supermarkets. On reflection, last year’s series covered the issues sensitively and intelligently and we hope this year’s season does the same.

We maintain a large database of relevant news stories, blogs and resources on a wide range of topics:

• Ethical trade
• Labour standards
• Working conditions
• Gangmasters
• Migrant labour

The database currently holds over 3000 stories and is updated daily and covers stories from across the globe.  We tag and categorise these stories using our Delicious account. These stories provide the basis for the Impactt newsfeed, which is delivered via RSS or email to our readers every day.

To access our database and explore the resources by date or by subject tag, please click here.

• Shared safety alerts – members submit information about health and safety incidents in their businesses and these are shared on a weekly basis with all members. These alerts detail what the issue was and what measures should be put in place to prevent it. The safety alerts have been on topics such as ‘Safeguards against fires and explosions during construction’, ‘Amputation due to miscommunication’ and ‘Kitchen burn injury’.
• Best practice alerts – again these are shared by members of the initiative, but focus on sharing good practice that prevents H&S issues. Topics have included: ‘Communicating alerts effectively’, ‘The Don’t Walk by Campaign’ and the ’30 minute bin it – housekeeping campaign’.
• Database of statistics – driven by a lack of reliable data from other sources, 16 of the main contractors of BSU now submit their accident information to the database on a weekly basis. There is a full set of data for the year 2008 which shows interesting trends in accidents and lost time injuries.
• Focus Groups – working groups which develop best practice guidance for members on key H&S issues such as falls from height and labour camp accommodation.

Information about all of the above can be found on the BSU website, along with useful reference information and tools such as H&S legislation, safety posters and risk assessments for key machinery/processes in construction. In the spirit of sharing and free access, anyone can sign up to the website to review this information.

With a general absence in the UAE of capacity building partnerships to tackle labour standards issues, Impactt applauds the work of BSU. While there is surely more work to be done inside member companies in terms of addressing health and safety issues, at least they have publicly committed to taking steps to do so and are working together to achieve a common goal.  

The challenge to the initiative is to spread its reach further and recruit those companies who have not yet understood the business benefits of good health and safety. Graeme Mc Caig, Chairman of BSU (and General Manager of Dutco Balfour Beatty) is a firm believer and champion of this case: “By implementing an effective H&S management system in your business, you will make more money… When you invest in H&S you will get a return”.

Currently BSU does not engage directly with workers and relies upon a top down approach for communicating the shared safety and best practice alerts. To ensure the full extent of its good work is being realised, BSU should consider involving workers in the initiative and harnessing their knowledge. Our experience from other industries shows that workers have some of the best and most cost effective ideas for tackling health and safety issues!

The news will be welcomed by business groups who have long held that a working week which can be flexible and extended if workers wish to, is essential to the economic prosperity of the UK. Trade unions and campaign groups continue to claim that this is a myth, and hold up other European countries such as France and the Netherlands as shining examples of how to prosper with a good work / life balance.

The Government claims the collapse of talks as a victory to the UK in Europe, continuing to assert that the right of a worker to determine his or her own working hours is vital.

In Impactt’s experience vulnerable workers tend to work excessive hours in high risk industries, which is enabled by the use of the opt-out. We are disappointed that political in-fighting may have prevented MEPs from securing further protection for such workers from exploitation.

As you will have seen from our blogs of the past few weeks, the attention in the UAE on labour standards for migrant construction workers has been immense.

There was a depth of discussion and debate about labour standards over the three days, but the issues that came up repeatedly included:

• What does CSR mean in the UAE and what are the responsibilities of business and government?
• Conditions in accommodation and welfare camps and how to maintain reasonable standards
• Health and safety for construction workers on site
• Training and skills development, especially in times of economic crisis
• Repatriation of workers who have lost their jobs

While discussion is good and necessary, it was great to see the Ministry of Labour announce  two initiatives that will directly impact the lives of workers – the development of a central electronic payment system and internationally recognised minimum standards for worker accommodation across Dubai.

In terms of private sector initiatives, the presentations (x 3!) from Build Safe UAE stood out as a shining light of practical collaboration to address health and safety issues. While the presentations at the GCC summit from the Labour Solidarity Center and the Builder and Wood Workers International union, ensured that the call for free unions and worker representation was also made.

The General Consul of India in Dubai made an important contribution to the debate at the GCC conference by talking about his office’s efforts to prepare workers pre-departure from their home country, monitor and support them whilst they are here and ensure they are returned safely. His presentation can be found here.

The dialogue underway at this week’s conferences reflects the changing tone of the Ministry of Labour here and the recognition by businesses that something has to be done. In Impactt’s perspective, there were two overriding themes, both of which have proved critical in addressing poor labour conditions in other countries:

• The importance of partnership – between business and the governments of both host and sending countries.
• The need for ongoing transparency and openness – admitting the problems and discussing the solutions in an open forum is a new thing in the UAE and we need to see more of it!

Impactt applauds all actors in the UAE for taking the first steps on the road to improved labour standards. We also encourage them to look at the work being done in the US and the UK, who face similar issues, and learn from their experiences – and mistakes!

Author: Jaana Quaintance

Last week Impactt attended an interesting event called ‘Putting market access into practice: Reaching the bottom billion through corporate supply and distribution chains.’ The event, organised by ODI, DFID and Business Action for Africa explored how supply and distribution chains can be harnessed to expand opportunities for the poor while delivering key business benefits.

Speakers included Andy Wales (Head of Sustainable Development- SABMiller), David Croft (Sustainability Director- Cadbury),  and Euan Wilmshurst (Stakeholder Engagement Manager- The Coca Cola Company). Caroline Ashley (Overseas Development Institute) acted as a respondent.

One of the key themes discussed was that the sustainability agenda is no longer confined to CSR or PR departments within organisations but has moved into core strategy and day-to-day business practice. It’s no longer just about doing good. It’s about realising that small growers, workers and communities lie at the heart of supply chains and helping them build sustainable futures is vital for the sustainability and success of the supply chain itself. As Euan Wilmshurst put it ‘Our business is only as sustainable as the communities in which we operate.’ This commitment to sustainability is also reflected in Cadbury’s £44 million investment in cocoa farms across Ghana, India, Indonesia and the Caribbean through the Cadbury Cocoa Partnership.

Another key theme discussed was the importance of effective local partnerships in delivering successful projects on the ground. Impactt whole-heartedly echoes this view and this year we launched the ‘Local Resources Network’- an online community which links companies with local resources (NGOs, trade unions, auditors, social scientists, other specialists) in their sourcing countries.

But while it was encouraging to see the positive work companies like SABMiller, Cadbury, Coca Cola and others are engaged in, the event also raised some critical questions. Why don’t we have more and bigger examples of supply chain reform? Can the pace of progress be faster? Why don’t we have more cooperation among competitors on this issue? How scalable and replicable are current projects?

The speakers pointed out that there are challenges of cost, scale and knowledge and of course the fact that real, long term sustainable projects simply need time. As always, there are no easy answers. But it was very encouraging to see a room full of brands, NGOs, academics, campaigners, students and development experts genuinely convinced in the power of supply chains to promote development. We hope brands will continue pushing the agenda, further integrating ethics with core business and driving real, sustainable change in their supply chains.

Low taxes and political stability have made this an attractive location for an increasing number of manufacturers in the past 10 years. The key products being made include cement, building materials, aluminium, fertilisers, foodstuffs, beverages, garments, furniture, plastics, glass, fibreglass and processed metals. Its central location in the Gulf region makes the UAE an ideal sourcing hub for both European and U.S. based purchasing companies. 

However, to date little attention has been given to conditions for workers in these sectors. In our experience they, like the construction industry, use a high proportion of migrant labour from countries such as Sri Lanka, Bangladesh and India. Whilst middle men demanding recruitment fees may be less common according to reported findings, the following issues have been identified:

• Retention of passports by employers
• Low pay and long hours
• False records
• Inadequate maintenance of fire equipment and other H&S facilities
• Outsourcing to smaller units where there is low visibility of conditions

Impactt encourages attention being placed on the conditions for construction workers, because it is certain that action is needed in this area. However, non-construction related industries should be aware that their supply chain here may present them with considerable risk because of poor labour standards.   

Author: Jaana Quaintance